Author Archives: Harvard Law School Forum on Corporate Governance and Financial Regulation

Deploying the Full Enforcement Arsenal

It is an honor to be here today [September 26, 2013]. The Council is an extremely important voice on behalf of investors and an excellent source of input for the SEC on new rules or guidance that is needed, existing rules that need to be changed and market practices that may be harming investors. As […]

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Measurement in Financial Reporting: The Need for Concepts

Measurement concepts in financial reporting are sorely needed. A key role of accounting is to depict economic phenomena in numbers, i.e., to develop measurements to report in financial statements. It is shameful that neither is there a conceptual definition of accounting measurement nor are there concepts guiding standard setters’ choice of measurement base. The Framework […]

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Recent Amendments to the DGCL and DLLCA

The State of Delaware recently enacted several significant changes to the Delaware General Corporation Law (“DGCL”) and the Delaware LLC Act (“LLC Act”). Section 251(h); Back-end Mergers. The most significant amendment to the DGCL is new Section 251(h) that, subject to certain exceptions, permits parties entering into a merger agreement to “opt in” to eliminate […]

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Providing Context for Executive Compensation Decisions

Today [September 18, 2013], the Commission takes an important step to comply with the Dodd-Frank Act’s requirements for better disclosure and accountability regarding executive compensation decisions at public companies. [1] As required by Section 953(b) of the Dodd-Frank Act, the Commission is proposing a rule to provide for disclosure of CEO-to-worker pay multiples. Reports show […]

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SEC Settles Regulation FD Case Against Former Vice President

On September 6, 2013, the Securities and Exchange Commission (SEC) announced that it had brought—and settled—a cease-and-desist case under Regulation Fair Disclosure (Reg. FD), which requires that public companies broadly disclose material nonpublic information to the public that their covered officers and employees intentionally or inadvertently disclose to market professionals and stockholders. The SEC charged […]

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Preferring Foreign Depositors — The Final Rule

The Federal Deposit Insurance Corporation has issued a final rule adopting with virtually no change its proposed approach to depositor preference for deposits payable at foreign offices of US banks. While the rule will provide guidance for US banks responding to international efforts to require equal treatment of local branch deposits with home-country deposits in […]

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Basel III Framework: US/EU Comparison

The US and EU rules implementing Basel III follow many aspects of Basel III closely, but there are major differences in approach in several key areas. Financial institutions have been engaged in a “race to the top” to show strong capital ratios but rules on leverage appear to be the most challenging and may require […]

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Proxy Voting Analytics (2009-2013)

While the number of shareholder proposals filed at U.S. public companies continued to increase this year, management has been less successful at obtaining permission from the Securities and Exchange Commission (SEC) to exclude from the voting ballot new types of investor demands. The finding is discussed in the latest Proxy Voting Analytics (2009-2013), recently released […]

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IPOs and the Slow Death of Section 5

Section 5 of the Securities Act of 1933 is slowly dying. We have to be careful about making such a bold-sounding claim because Section 5 performs two distinct legal functions. First, it creates a presumption that offerings of securities using the facilities of interstate commerce have to be registered with the Securities and Exchange Commission. […]

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How Stock Exchange Indices Can Advance Good Corporate Governance Practices

Since 2001, eight stock exchanges around the world have launched corporate governance indices (CGIs), sometimes as part of a broader environment, social, and governance (ESG) initiative. The comprehensive analysis of these indices is presented in our World Bank/IFC study: “Raising the Bar on Corporate Governance – A Study of Eight Stock Exchanges Indices”. The study […]

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