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

FAS 157 and the Impact of Corporate Governance Mechanisms

In our paper, Value Relevance of FAS 157 Fair Value Hierarchy Information and the Impact of Corporate Governance Mechanisms, forthcoming in The Accounting Review, we use banking firm data from the first three quarters of 2008 to examine two important research questions related to fair value information provided by banks under FAS 157. First, we […]

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Posted in Academic Research, Accounting & Disclosure, Empirical Research | Tagged | Comments Off on FAS 157 and the Impact of Corporate Governance Mechanisms

Detailed Summary of Senate Financial Reform Bill

Financial regulatory reform is reaching the legislative end game.  On May 22, 2010, the United States Senate passed the Restoring American Financial Stability Act of 2010 (the “Senate bill”) by a vote of 59 to 39. The Senate bill is the culmination of nearly a year of work by the Senate – including a month […]

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Posted in Financial Crisis, Financial Regulation, Legislative & Regulatory Developments, Practitioner Publications | Tagged | 2 Comments

Pending U.S. and E.U. Legislation Promises Broad Changes for Private Fund Managers

Responding to the recent financial crisis, the U.S. and E.U. governments are taking steps to implement a broad extension of regulatory power to a wide range of private investment fund managers that previously operated globally subject to limited or no direct regulation. Pending U.S. Legislation The Restoring American Financial Stability Act, passed by the Senate, […]

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Posted in International Corporate Governance & Regulation, Legislative & Regulatory Developments, Practitioner Publications, Private Equity | Tagged , , , | Comments Off on Pending U.S. and E.U. Legislation Promises Broad Changes for Private Fund Managers

Combining Banking with Private Equity Investing

In the paper, “An Unfair Advantage”? Combining Banking with Private Equity Investing, which was recently made publicly available on SSRN, we explore the phenomenon and economics of private equity investment by bank-affiliated groups. This paper is motivated by recent regulatory efforts to limit the ability of banks to undertake proprietary investing and trading activities. Despite […]

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Posted in Academic Research, Banking & Financial Institutions, Private Equity | 1 Comment

Inefficiencies in the Information Thicket

In the paper, Inefficiencies in the Information Thicket: A Case Study of Derivative Disclosures During the Financial Crisis, which was recently made publicly available on SSRN, I provide an empirical examination of the effect of enhanced derivative disclosures by examining the disclosure experience of the monoline insurance industry in 2008. Conventional wisdom concerning the causes […]

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Posted in Academic Research, Derivatives, Empirical Research | Tagged | 1 Comment

Rating the Raters

Editor’s Note: This post is Lucian Bebchuk’s most recent op-ed in his regular column series titled “The Rules of the Game” written for the international association of newspapers Project Syndicate, which can be found here. In the new financial order being put in place by regulators around the world, reform of credit rating agencies should […]

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Posted in Financial Regulation, Legislative & Regulatory Developments, Op-Eds & Opinions | Tagged | 3 Comments

Understanding RiskMetrics Shareholder Rights “GRId”

As we described in a prior memo, RiskMetrics has replaced its Corporate Governance Quotient (CGQ) with Governance Risk Indicators (GRIds). Using the new GRIds methodology, RiskMetrics will identify the level of concern (low, medium and high) for each company across four categories of corporate governance metrics used by RiskMetrics: Board Structure, Compensation, Audit and Shareholder […]

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Agency Costs, Mispricing, and Ownership Structure

In our NBER working paper, Agency Costs, Mispricing, and Ownership Structure, we propose an explanation based on stock market mispricing for why firms with a controlling shareholder raise outside equity even when they cannot commit not to expropriate minority shareholders. Our main idea is that the controlling shareholder takes advantage of stock market mispricing to […]

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OECD Provides Guidance for Anti-Bribery Compliance Programs

In March 2010, a working group of the Organization of Economic Cooperation and Development (“OECD”), representing the thirty OECD member nations and eight other countries (the “Working Group”), issued its much-awaited Good Practice Guidance for anti-bribery compliance programs. For global companies, this represents what could well be the most significant set of compliance and ethics […]

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Posted in Accounting & Disclosure, Corporate Social Responsibility, International Corporate Governance & Regulation, Practitioner Publications | Tagged , , | Comments Off on OECD Provides Guidance for Anti-Bribery Compliance Programs

Delaware Chancery Court Allows Preferred Stockholder Derivative Action

In a recent decision, the Delaware Court of Chancery for the first time held that preferred stockholders have standing to bring derivative suits on behalf of a corporation. MCG Capital Corp. v. Maginn, C.A. No. 4521-CC (Del. Ch. May 5, 2010). The plaintiff was the sole holder of Jenzabar, Inc.’s preferred stock but held no […]

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Posted in Corporate Elections & Voting, Court Cases, Practitioner Publications, Securities Litigation & Enforcement | Tagged , , | Comments Off on Delaware Chancery Court Allows Preferred Stockholder Derivative Action