Corporate Law: Corporate & Financial Law: Interdisciplinary Approaches eJournal最新文献

{"title":"Good Timing? How One Bank Cut Its Link to a $1.2 Billion Ponzi Scheme","authors":"L. Davis, Linus Wilson","doi":"10.2139/ssrn.1587743","DOIUrl":"https://doi.org/10.2139/ssrn.1587743","url":null,"abstract":"On September 17, 2009, Boston Private Financial Holdings (BPFH) sold its Coral Gables, Florida based Gibraltar Private Bank & Trust subsidiary for $93 million. On October 27, 2009, Scott Rothstein fled to Morocco on a private jet before turning himself in to authorities. Mr. Rothstein has subsequently pled guilty to running a $1.2 billion Ponzi scheme with substantial deposits at Gibraltar Bank. Scott Rothstein had a 5 percent equity stake in the group that bought Gibraltar Bank from BPFH. Investors cheered the news of the sale producing a 27 percent one-day return after the Gibraltar Bank sale was released, adding over $100 million of market value overnight. Using a geometric Brownian motion model of the stock price, we find there was almost no chance that this was a random swing in the stock price. This sale, nevertheless, may not shield BPFH from legal liability from Mr. Rothstein’s four-year Ponzi scheme.","PeriodicalId":286147,"journal":{"name":"Corporate Law: Corporate & Financial Law: Interdisciplinary Approaches eJournal","volume":"2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-11-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128806889","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Hedge Funds and Governance Targets: Long-Term Results","authors":"W. Bratton","doi":"10.2139/SSRN.1677517","DOIUrl":"https://doi.org/10.2139/SSRN.1677517","url":null,"abstract":"This article takes a second look at a database of 114 activist hedge fund engagements commenced between 2002 and 2006. The first look at the database, published as “Hedge Funds and Governance Targets,” 95 Georgetown Law Journal 1375 (2007), covered developments through December 31, 2006, and so caught most of the engagements at midstream. This second look tracks the engagements through mid 2009, providing an extended look at governance engagements by activist hedge funds. The number of engagements remaining open has fallen from 63 percent of the sample to 20 percent. Closure across most of the sample facilitates deeper inspection of the results. The financial yield, however, is disappointing. The hedge funds prove better at extracting target concessions and getting into boardrooms than at yielding long-term, market-beating financial gain. On the one hand, activist intervention led to something tangible in 88 percent of the cases, whether an asset sale, a stepped up cash payout, a board seat, or a legislative concession. On the other hand, only a minority of the targets’ stock prices beat market indices over the period of engagement, with financial underperformance being particularly notable in cases where the hedge fund entered the target boardroom. Overall, the hedge funds’ talents appear best suited to address matters that can be interrogated from outside the target. Any of a cash disgorgement, an asset sale, or a sale of the target as a whole can be planned based on publicly available information. Other value-creating initiatives, like reducing operating costs or otherwise enhancing business plans, call for hands on confrontation with the fuller set of information available only on the inside. The results here yield no overall evidence of constructive input at this level.","PeriodicalId":286147,"journal":{"name":"Corporate Law: Corporate & Financial Law: Interdisciplinary Approaches eJournal","volume":"27 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-08-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134027774","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"May 6th – Signals from a Very Brief but Emblematic Catastrophe on Wall Street","authors":"P. David","doi":"10.2139/ssrn.1641419","DOIUrl":"https://doi.org/10.2139/ssrn.1641419","url":null,"abstract":"This essay begins by looking closely at the underlying structural causes of the discontinuity that appeared in the behavior of the U.S. stock market at 2:40pm in the afternoon of 6 th May 2010, because the emblematic “catastrophic” aspect of the collapse of equity prices, and their subsequent equally abrupt rebound, renders these events potentially informative about things that can happen in a wider array of dynamical systems or processes – including those with consequences about which there is cause for serious concern. What transpired in those 7 minutes is viewed as being best understood as a hitherto unrecognized “emergent property” of structural conditions in the U.S. national stock market that all the actors in the story collectively had allowed to come into existence largely unremarked upon, through an historical process that was viewed generally as benign and therefore left to follow its own course of evolution unimpeded. The deeper significance of the events of May 6 th lies in the attention it directs to the difference between a society being able to create and deploy technical “codes” enabling greatly enhanced connectivity for “exchange networks” - the condition of “hyper-connectivity” among an increasing number of its decentralized sub-systems, and a society that also provides timely mutually compatible institutional regulations and administrative rules for the coherent governance of computermediated transactions among “community-like” organizations of human agents. Regulating mechanisms operating to damp volatility and stabilize systems in which there is beneficial positive feedback are considered, as are a variety of circumstances in which their absence results in dysfunctional dynamic behavior. It is suggested that in view of the growing dependence of contemporary society upon on-line human-machine organizations for the performance of vital social and economic functions, continuing to focus resources and creative imagination upon accomplishing the former, while neglecting the latter form of “progress” is a recipe for embarking upon dangerous trajectories that will be characterized by rising systemic hazards of catastrophic events of the non-transient kind.","PeriodicalId":286147,"journal":{"name":"Corporate Law: Corporate & Financial Law: Interdisciplinary Approaches eJournal","volume":"5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-06-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129341642","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Competition of Accounting Standards, Comparability of Financial Information, and Critical Masses: An Evolutionary Approach","authors":"Christoph Kuhner","doi":"10.2139/ssrn.1641163","DOIUrl":"https://doi.org/10.2139/ssrn.1641163","url":null,"abstract":"In recent years, the remaining global standard setters of generally accepted accounting principles, IASB and FASB, have consented to harmonize their standards in the medium term with the aim of the emergence of one dominant global accounting standard. In accounting literature, however, it is argued that not necessarily the harmonisation of accounting standards, leading to one single “monopolistic” set of rules, will lead to an overall optimum of financial information quality. In contrast, it was suggested that, with greater probability, the mechanism of competition, that means: the persistence of several competing accounting standards, will emerge in the evolution of optimal financial information quality.The paper will analyse the hypothesis of the expansion of the superior standard by competition between different accounting standards from the viewpoint of evolutionary game theory. The argument is based on a two Players/three strategies coordination game of the type “tender trap”. Players, i.e. firms which adopt a particular accounting standard, have the choice between three strategies: (i) adopting the “good” standard; (ii) adopting the “bad” standard and (iii) multiple strategy.In the evolutionary game, two firms are randomly drawn from a great population and matched against each other. We analyse the evolutionary stability properties of the game as well as evolutionary dynamics starting from an out of equilibrium point. Evolutionary stable equilibria include the adoption of one single standard – “good” or “bad” – by the entire population. For the evolution towards the “good” or the “bad” equilibrium, critical masses play a crucial role, which is further analysed.Among our results are the following: There is an equilibrium in which all three strategies (good, bad, multiple) coexist; but this equilibrium has not the property of evolutionary stability. There are two equilibria which own the property of evolutionary stability: (i) all members of the population adopting the good standard; (ii) all members of the population adopting the bad standard. Whether the “good” equilibrium or the “bad” equilibrium will finally evolve is dependent on critical masses of adopters. For the “good” equilibrium, the critical mass will be lower compared with the “bad” equilibrium. The role of multiple strategies as a trigger for the “good” equilibrium is ambiguous: Very low cost c will lead to very low critical masses for the “good” equilibrium; but there is a range, where positive but finite values of c will lead to higher critical masses in order to reach a “good” equilibrium, compared with a situation without the possibility of multiple strategies. If starting from an out-of-equilibrium point, the evolution moves towards the “good” equilibrium, the adoption of multiple strategies will expand on the medium term; if the evolution is towards a bad equilibrium, multiple strategies will soon decline in their relative weight.The regulatory implications are ambiguous: ","PeriodicalId":286147,"journal":{"name":"Corporate Law: Corporate & Financial Law: Interdisciplinary Approaches eJournal","volume":"6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-06-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123499596","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"To Buy or Not to Buy?: The Effect of Option Granting on Executive Stock Purchases","authors":"P. Grout, A. Zalewska","doi":"10.2139/ssrn.891070","DOIUrl":"https://doi.org/10.2139/ssrn.891070","url":null,"abstract":"We provide a simple asymmetric information model showing that, in contrast to portfolio diversification arguments, there is a natural complementarity between executive options and stock ownership. Moreover, managers can be made worse off by being granted more executive options.","PeriodicalId":286147,"journal":{"name":"Corporate Law: Corporate & Financial Law: Interdisciplinary Approaches eJournal","volume":"74 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128375949","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Investor Protection as the Objective of Securities Regulation: Goal v Instruments","authors":"Nusret Çetin","doi":"10.2139/ssrn.2226778","DOIUrl":"https://doi.org/10.2139/ssrn.2226778","url":null,"abstract":"Investor protection is one of the most important objectives of the securities regulation. Functional approach demonstrates that investors play different roles in the market place, and that they face different market failures with respect to each role. Therefore, sufficient protective mechanisms need to be developed to address these market failures. This paper analyzes the theoretical dimensions of investor protection and protective mechanisms, and compares investor protection mechanisms provided by United Kingdom and Turkish legislations.","PeriodicalId":286147,"journal":{"name":"Corporate Law: Corporate & Financial Law: Interdisciplinary Approaches eJournal","volume":"12 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-01-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130064908","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Policy of Disinvestment and Corporate Social Responsibility","authors":"S. Swain","doi":"10.2139/SSRN.1553622","DOIUrl":"https://doi.org/10.2139/SSRN.1553622","url":null,"abstract":"Disinvestment involves the withdrawal of equity and bond capital invested by the government in the Public Sector Undertakings (PSUs). Disinvestment is generally expected to accomplish a greater inflow of private capital and enable more effective monitoring of management discipline by the private players, amplify in the operational efficiency and increase the market value of the PSUs. On the other hand, Corporate Social Responsibility (CSR) is a bent or inclination on the part of the organizations or business community to uplift the standard of living and wellbeing of the people, the state and the environment. One may argue that it is one step taken by a company to neutralize, minimize or extinguish the harmful effects caused by its processes and product-usage. This paper is a modest endeavor to understand the effects of disinvestment on Corporate Social Responsibility. How well the CSR is guaranteed to the employees, who eventually became the employees of the private company, will be one of our focal point. We will also hash out whether the private companies should be made adhered to CSR and the public trust doctrine. To understand it clearly, reference has been made to various books, journals, magazines, scholarly writings on the subject and materials in this regard. Apart from this we will discuss the cases of BALCO Employees Union (Regd.) v. Union of India & Ors. and Centre for Public Interest Litigation v. Union of India (UOI) and Ors. etc. in details. The rationale of the concept of CSR is that industry can no longer be regarded as private arrangement for enriching shareholders. Hence, the disinvested company can’t simply shun the responsibility it has towards to the workers, management, consumer, the locality, government and the trade union officials.","PeriodicalId":286147,"journal":{"name":"Corporate Law: Corporate & Financial Law: Interdisciplinary Approaches eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2009-10-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131546024","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Why Stock Options are the Best Form of Executive Compensation (And How to Make Them Even Better)","authors":"R. Booth","doi":"10.2139/ssrn.1471989","DOIUrl":"https://doi.org/10.2139/ssrn.1471989","url":null,"abstract":"Stock options are the primary form of compensation for CEOs because they are the best way to align the interests of CEOs with those of diversified stockholders. Nevertheless, critics argue that the use of stock options leads to excessive pay because there is no effective bargaining between the CEO and the board of directors about the number of options to award. They argue that the cost is underestimated by boards and hidden from stockholders and that options induce CEOs to undertake risky business strategies. None of these objections withstands scrutiny. First, there is little reason to believe that options have resulted in excessive CEO compensation. Although CEO pay has increased dramatically in absolute terms, data show that total executive pay as a percentage of corporate income – including gain from the exercise of options – has remained quite stable since 1982. This is true even though equity compensation grew from a negligible amount to as much as 75% of CEO pay by the year 2000. It would thus appear that equity compensation has been substituted for cash compensation and that a larger share of aggregate pay goes to those who succeed in increasing stock price. Second, options are subject to powerful market forces that effectively control their use. Using options as compensation effectively requires a corporation to repurchase shares to control for dilution. Because cash is scarce, there is a natural limit on the number of options that a corporation can grant. In addition, stock options confer significant benefits that are difficult to achieve with other forms of compensation. Aside from the fact that options induce corporations to distribute cash in the form of repurchases to control for dilution, options also convey significant information to the market about a company’s prospects, because the need to repurchase stock requires the company to estimate future cash flows in deciding how many options to grant. Finally, options provide an unbiased incentive for acquisitions when appropriate and for divestitures when appropriate. Thus, options make sense for both growing companies and mature companies. Although other forms of incentive compensation may provide some of the same benefits as stock options, they are ultimately inferior to options. For example, restricted stock rewards the CEO who increases stock price, but it may also induce the CEO to engage in conservative business strategies designed primarily to avoid losses rather than generate gains, contrary to the interests of diversified investors. And the traditional bonus based on earnings may induce CEOs to grow the business by retaining cash and investing it in new but suboptimal ventures. To be sure, stock options can be abused through such practices as timing and backdating. But these problems can be addressed by announcing option grants in advance of fixing the strike price. Moreover, it is quite easy to design an option that addresses the problem of overvalued equity and eliminates ","PeriodicalId":286147,"journal":{"name":"Corporate Law: Corporate & Financial Law: Interdisciplinary Approaches eJournal","volume":"274 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2009-09-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131321696","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Short Seller Trading in Companies with a Severe Accounting Irregularity","authors":"Jap Efendi, E. Swanson","doi":"10.2139/ssrn.1465156","DOIUrl":"https://doi.org/10.2139/ssrn.1465156","url":null,"abstract":"We find that shorts establish significant positions more than a year before the average restatement announcement, those positions increase as the announcement month approaches, and the largest positions are held in companies that will announce an accounting irregularity that attracts class action litigation. Shorts are thereby well positioned to profit from the lengthy string of negative returns that precede the announcement of a severe accounting irregularity. Afterward, we find average short interest is sticky, and shorts retain positions in firms that experience a further price decline. In the six months after an announcement, positions in heavily shorted restating firms (i.e., short interest exceeding 2.5 percent before the announcement) earn an additional 24 percent (31 percent with class action litigation). We conclude that shorts have the skill to play an important private-sector role in identifying and disciplining companies with accounting irregularities.","PeriodicalId":286147,"journal":{"name":"Corporate Law: Corporate & Financial Law: Interdisciplinary Approaches eJournal","volume":"87 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2009-08-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116815323","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The Costs of Corporate Litigation in Australia","authors":"Asjeet S. Lamba, I. Ramsay","doi":"10.2139/ssrn.1423744","DOIUrl":"https://doi.org/10.2139/ssrn.1423744","url":null,"abstract":"This paper presents the results of a study that measures the costs associated with litigation for plaintiff and defendant companies for a sample of companies listed on the Australian Securities Exchange. The study uses event study methodology to examine the effects of litigation initiation announcements, settlement announcements and judgment announcements. The study also examines whether the impact of an announcement is related to the type of plaintiff (such as corporate plaintiff or a government plaintiff) and whether the impact differs according to the type of legal claim (such a breach of contract, a trade practices matter, an intellectual property infringement or securities fraud).","PeriodicalId":286147,"journal":{"name":"Corporate Law: Corporate & Financial Law: Interdisciplinary Approaches eJournal","volume":"3 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2009-06-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129919497","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}