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

SEC Forecasts an Increase in Whistleblower Cases and Awards

On June 12, 2013, the U.S. Securities & Exchange Commission announced its second-ever whistleblower award under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). Having received over 3,000 whistleblower tips in the first year of the revamped program, the SEC made its first whistleblower award in August of 2012 and is expected to […]

Click here to read the complete post
Posted in Practitioner Publications, Securities Litigation & Enforcement | Tagged , , , , | Comments Off on SEC Forecasts an Increase in Whistleblower Cases and Awards

The STOCK Act and the Political Intelligence Industry

Investors who hire political intelligence firms to collect information from government sources should take notice of the Stop Trading on Congressional Knowledge (STOCK) Act, according to panelists at a recent American Bar Association event. The panel, which included Stephen Cohen of the SEC’s Division of Enforcement, gathered in the wake of recent scandals and increased […]

Click here to read the complete post
Posted in Practitioner Publications, Securities Litigation & Enforcement, Securities Regulation | Tagged , , , , , , | Comments Off on The STOCK Act and the Political Intelligence Industry

Goldilocks, Porridge and General Solicitation

At long last, the U.S. Securities and Exchange Commission (SEC) took action July 10, 2013 to implement rules that complied with the JOBS Act mandate to relax the prohibition against general solicitation in certain private offerings of securities. The original SEC proposal from August 2012, proposing amendments to Rule 506 of Regulation D and Rule […]

Click here to read the complete post
Posted in Legislative & Regulatory Developments, Practitioner Publications, Securities Regulation | Tagged , , , , , , , | Comments Off on Goldilocks, Porridge and General Solicitation

The Deterrence Effect of SEC Enforcement Intensity on Illegal Insider Trading

In our paper, The Deterrence Effect of SEC Enforcement Intensity on Illegal Insider Trading, which was recently made publicly available on SSRN, we argue that dramatic changes in insider trading enforcement since the 1980s enable us to empirically identify the effects of more aggressive enforcement on trader behavior and stock price discovery. First, the types […]

Click here to read the complete post
Posted in Academic Research, Securities Litigation & Enforcement | Tagged , , , , | Comments Off on The Deterrence Effect of SEC Enforcement Intensity on Illegal Insider Trading

2013 Proxy Season Review

The 2013 proxy season saw a continued high rate of governance-related shareholder proposals at large U.S. public companies, including those calling for declassified boards, majority voting in director elections, elimination of supermajority requirements, separation of the roles of the CEO and chair, the right to call special meetings and action by written consent. As in […]

Click here to read the complete post
Posted in Boards of Directors, Corporate Elections & Voting, Executive Compensation, Practitioner Publications | Tagged , , , , , , , , | Comments Off on 2013 Proxy Season Review

District Court Vacates SEC Rule on Resource Extraction Disclosures

On July 2, 2013, the District Court for the District of Columbia vacated Rule 13q-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which required resource extraction issuers to disclose payments made to the U.S. Federal government and foreign governments. The District Court found that the Securities and Exchange Commission (the […]

Click here to read the complete post
Posted in Accounting & Disclosure, Court Cases, Practitioner Publications, Securities Regulation | Tagged , , , , , | Comments Off on District Court Vacates SEC Rule on Resource Extraction Disclosures

Informed Trading through the Accounts of Children

In our paper, Informed Trading through the Accounts of Children, forthcoming in the Journal of Finance, we introduce a novel measure of the probability of information-based trading in a stock, namely, BABYPIN, the proportion of total trading through the accounts of underaged investors. We begin by empirically validating this measure by showing that underaged accountholders […]

Click here to read the complete post
Posted in Academic Research, Empirical Research | Tagged , , | Comments Off on Informed Trading through the Accounts of Children

Rethinking Director Nomination Requirements and Conduct

This post identifies and discusses a number of steps public companies may wish to consider regarding director nomination requirements and conduct in light of the heightened potential for arrival on the board of activist shareholder-nominated directors. Background Increased Incidence of Nomination Proposals: Based on publicly reported information published by Activist Insight, [1] during 2012 activist […]

Click here to read the complete post
Posted in Boards of Directors, Corporate Elections & Voting, Practitioner Publications | Tagged , , , , , , , , | Comments Off on Rethinking Director Nomination Requirements and Conduct

Volcker Rule Conformance Period for Banking Entities

On April 19, 2012, the Board of Governors of the Federal Reserve System (“Board”) issued a statement of policy (the “Conformance Statement”) clarifying that a banking entity covered by Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the so-called “Volcker Rule”) has until July 21, 2014 (unless extended by the Board) […]

Click here to read the complete post
Posted in Banking & Financial Institutions, Financial Regulation, Practitioner Publications, Private Equity | Tagged , , , , , , | Comments Off on Volcker Rule Conformance Period for Banking Entities

Institutional Investors and the Information Production Theory of Stock Splits

In our paper, Institutional Investors and the Information Production Theory of Stock Splits, forthcoming in the Journal of Financial and Quantitative Analysis, we analyze the incentives of analysts to produce information about a firm, by studying institutional trading and brokerage commissions around a specific corporate event, namely, a stock split. We make use of a large […]

Click here to read the complete post
Posted in Academic Research, Empirical Research, Institutional Investors | Tagged , , | Comments Off on Institutional Investors and the Information Production Theory of Stock Splits