Corporate governance - Vigil

Recently, there have been three important studies by prominent economists and law professors, each of which points out serious flaws in the so-called empirical evidence being put forth to justify short-termism, attacks by activist hedge funds and shareholder-centric corporate governance. 

The Canada Pension Plan Investment Board said on Tuesday it has voted to strip Bank of America Corp Chief Executive Officer Brian Moynihan of his chairman's title, the biggest shareholder so far to declare its intentions in a closely watched corporate governance contest.

U.S. securities regulators ratcheted up a campaign to cut risk in the multi-trillion asset-management industry, proposing rules to require mutual funds and exchange-traded funds to get a better handle on how they would survive periods of large investor withdrawals.

Corporate social responsibility (CSR) has increasingly become a mainstream business activity—ranging from voluntarily engaging in environmental protection to increasing workforce diversity and employee welfare—although standard economic theories predict that it should be rather uncommon (Benabou and Tirole, 2010; Kitzmueller and Shimshack, 2012).

On September 9, 2015, the Department of Justice (“DOJ”) issued a new policy memorandum, signed by Deputy Attorney General Sally Yates, regarding the prosecution of individuals in corporate fraud cases—”Individual Accountability for Corporate Wrongdoing” (“the Yates Memorandum”).

In a significant decision addressing claims arising out of Bernard Madoff’s Ponzi scheme, the U.S. District Court for the Middle District of Florida has dismissed federal securities and other claims asserted by Madoff investors.

In trading their firms’ stocks, insiders must balance the profits of informed trading before news, the scrutiny by regulators that such trading can engender, formal policy restrictions by firms of insider trading activities, and diversification and liquidity motivations for selling shares after vesting of equity-based compensation.

The hedge fund sector is on pace for far fewer start-ups in 2015 than in the last four years, data released on Tuesday showed, illustrating the difficulty of launching a fund even in a year that has seen a handful of prominent managers set off on their own.

Hedge fund Kerrisdale Capital Management, which has made a big splash with public bets against big-name companies, said on Tuesday that business incubator Allied Minds Plc's stock price is hugely overvalued and should fall by as much as 67 percent.

Activist hedge fund Marcato Capital Management on Tuesday unveiled a new target when it said it now owns roughly 6 million shares in brokerage firm LPL Financial Holdings Inc.

The past year has seen the issue of financial sector pay continue to generate headlines. With the EU having put in place a complex web of overlapping law, regulation and guidance during 2013 and 2014, national regulators are faced with the task of interpreting these requirements and imposing them on a sometimes skeptical (if not openly hostile) financial services industry.

In the first half of 2015, the Securities and Exchange Commission (the “SEC”) finalized or proposed a number of rules relating to security-based swaps (“SBSs”). These include final and proposed rules on the reporting and public dissemination of security-based swaps, proposed rules on security-based swap transactions arranged, negotiated or executed by U.S.-based personnel of a non-U.S.