Symposium, JOBS Act: The Terrible Twos – General Solicitation & Crowdfunding, the Next Frontier of Securities RegulationOn March 24th, 2014, The Fordham Corporate Law Center and the Fordham Journal of Corporate & Financial Law will hold its 19th Annual Symposium focusing... Read More
New: Correcting Corporate Benefit: How to Fix Shareholder Litigation by Shifting the Doctrine on Fees
The current controversy in corporate law concerns whether firms can discourage litigation by shifting its cost to shareholders. But corporate law courts have long engaged in fee-shifting — from shareholder plaintiffs to the corporation — under the “corporate benefit” doctrine. This Article examines fee-shifting in shareholder litigation, arguing that current practices are unsound from the perspective of both doctrine and public policy. Unfortunately, the fee-shifting bylaws recently enacted in response to the problem of excessive shareholder litigation fare no better. The Article therefore offers a different approach to fee shifting, articulating three specific reforms of the corporate benefit doctrine to quell the current crisis in shareholder litigation.
Two seemingly unrelated crises implicating the law of war and the responsibility to protect civilians have arisen in recent years. In 2013, the United States considered military intervention without United Nations (“U.N.”) Security Council preapproval in Syria after discovering that the government had exterminated its own people with chemical agents. In 2014, Russia sent troops into Crimea, a part of Ukraine, to protect ethnic Russians that Russia claimed were in danger after a political coup in the country. In both cases, the military acts contemplated or undertaken were of dubious legality, albeit under different rubrics. This Article aims to show how analysis of the lawfulness of military intervention in Syria and Crimea is illuminated by recognizing that both are subspecies of the same problem and are thus controlled by one customary doctrine of international law governing the grounds for war. By custom, a sovereign state may use force in another unconsenting sovereign state …
NYC Bar’s Securities Litigation Committee Issues Report on Possible Impact of Halliburton II
The U.S. Supreme Court’s anticipated decision in Halliburton II will be a landmark event in the world of class action securities litigation.
The United States Supreme Court’s anticipated decision in Halliburton II will be a landmark event in the world of class action securities litigation. In its report, entitled The Possible Impact of Hallibuton II on Securities Class Action Litigation, the New York City Bar Association’s Committee on Securities Litigation, chaired by Fordham Law alum Todd G. Cosenza, provides an overview of the issues before the Supreme Court in that case, followed by a concise explanation of the history and key concepts most relevant to the current debate, including the efficient capital markets hypothesis, the fraud-on-the-market presumption, and the legal landscape in which the Supreme Court recently granted certiorari. The report then seeks to identify and analyze the potential implications of the Supreme Court’s decision in Halliburton II.
To reduce the risk of another financial crisis, the Dodd-Frank Act requires that trading in certain derivatives be backed by clearinghouses. Critics mount two main objections: a clearinghouse shifts risk instead of reducing it; and a clearinghouse could fail, requiring a bailout. This Article’s observation that clearinghouses engage in liquidity partitioning answers both. Liquidity partitioning means that when one of its member firms becomes bankrupt, a clearinghouse keeps a portion of the firm’s most liquid assets, and a matching portion of its short-term debt, out of the bankruptcy estate. The clearinghouse then applies the first toward immediate repayment of the second. Economic value is created because creditors within the clearinghouse are paid much more quickly, and other creditors are paid no less quickly, than they would be otherwise. The rapid cash payouts for clearinghouse members reduce illiquidity and uncertainty in the financial sector, the main causes of contagion in a …