On March 20, 2014, the Board of Governors of the Federal Reserve System announced the results of the annual company-run stress tests for the 30 largest banking institutions, concluding that the institutions have improved their capital positions and are now better positioned to endure conditions of extremely severe stress than they were five years ago. For Mid-sized Banks, this announcement offers a glimpse into the implementation of the stress-test public disclosure requirements, which such institutions are required to meet in 2015.
SEC Cracks Down on High-Frequency Trading
Following the FBI’s announcement of a wide-ranging probe into high-frequency trading (HFT), the Securities and Exchange Commission (SEC) has placed its focus on the same area. “We currently have … a number of ongoing investigations regarding various market integrity and structure issuers, including high-frequency traders and automated trading,” said SEC Chair Mary Jo White, when testifying before a House of Representatives Appropriations subcommittee. Best-selling author Michael Lewis’s new book, “Flash Boys: A Wall Street Revolt” further fueled the long-standing debate that a group of tech-savvy insiders rigged the stock market using HFT.
DOJ Secures First-Ever Successful Extradition on Antitrust Charge
On Friday, April 4, 2014, the Antitrust Division of the United States Department of Justice (DOJ) announced that Romano Pisciotti, an Italian national, was extradited from Germany for his alleged role in a marine hose bid-rigging conspiracy. It was reported that Mr. Pisciotti was returning to Italy from Nigeria and was arrested during a layover at Frankfurt Airport. This is the first successful extradition by the DOJ on antitrust charges.
2014 Symposium: Keynote Address from Larry Sonsini on Shareholder Activism
During the 2014 BCLBE and BBLJ Shareholder Activism Symposium, Larry Sonsini delivered the keynote address directed at the change in the activist climate and how this change should be interpreted.
“Shareholder activism will be around for a while,” Sonsini declared because there has been a shift from a director-centric model to a shareholder-centric model. In this shareholder-centric model, shareholder activists agendas’ have become broader. They are no longer only concerned with battles over defensive measures (e.g., poison pills and staggered boards) and CEO successions, but are now addressing corporate sustainability—taking into account social, environmental, economic, and governmental measures—and are attacking companies on their merits.
2014 Symposium: Panel Explores the Hot Button Issues Surrounding Shareholder Activism
On Friday April 4, the Berkeley Business Law Journal and the Berkeley Center for Law, Business and the Economy hosted the 2014 Symposium on Shareholder Activism. With the rise in shareholder activism in publicly traded companies, activist campaigns are “perceived by various stakeholders as threats to be avoided, part of the current landscape, and powerful sources motivating social responsibility.” The Symposium explored this topic through hosting panel discussions with regulators, attorneys, academics and business professionals all sharing their thoughts on shareholder activism.
2014 Symposium: A Bird’s–Eye View of Shareholder Activism
From the first panel of the 2014 BCBLE and BBLJ Shareholder Activism Symposium: Three professors give a “bird’s-eye view” of shareholder activism.
Panelist:
- Eric Talley, UC Berkeley, School of Law
- Paul Rose, Ohio State University Moritz College of Law
- Adair Mores, UC Berkeley, Hass, School of Business
- Moderator: Joseph Santiesteban, Berkeley Business Law Journal
2014 Symposium: A Panelist’s Review of Shareholder Activism Discussion
Eric Talley at Berkeley, and the Berkeley Business Law Journal, put together a great conference on April 4, 2014 on shareholder activism, and I scratched out the following thoughts for our panel. We were supposed to talk about the prospects for further regulatory and legal developments governing or motivating shareholder activism. First, though, consider what legal rules facilitate activism – and when you do that, you discover that any change is likely to be marginal at best. Given my working definition of shareholder activism – using share ownership to promote concerted action, by large numbers of shareholders, to exercise the legal rights of shares – the following are key legal rules that enable this to occur.
An “Icahn-ic” Move: Mike Ashley’s Attempt to Block a Private Buy-Out of House of Fraser PLC, the 165 year old UK Department Store
Does Mike Ashley, the UK billionaire businessman and owner of Sports Direct International PLC (and perhaps more famously Newcastle United soccer team), aspire to become the UK protégé of Carl Icahn, the US activist shareholder? Increasingly so, if recent events are anything to go by, but there remain differences between the two as wide as the Atlantic ocean itself, not least their comparative net worth.
Thomas Brown on “Regulation and the Future of Money: Mobile Payments and Virtual Currencies”
On April 2, 2014, the Berkeley Business Law Journal in partnership with the Berkeley Center for Law, Business and the Economy hosted as part of its Speaker Series a presentation by Thomas Brown entitled “Regulation and the Future of Money: Mobile Payments and Virtual Currencies” to explore how mobile communications are changing the way we define value and authenticate transactions.
Thomas Brown, a subject matter expert on payment systems, provided valuable information and memorable insight about the current status and future of mobile payment systems and virtual currencies. Mr. Brown is currently a Partner at Paul Hastings in San Francisco, and he used to serve as Senior Counsel for Visa U.S.A. Inc.
A Potentially Hostile Tax Environment for Private Equity Firms
On February 26, 2013, the House Ways & Means Committee Chair Dave Camp released a comprehensive tax reform proposal that would categorize private equity funds’ carried interest as ordinary income instead of capital gains. It contends that carried interest, the profit interest in the fund, is a partnership interest held in connection with the performance of a service and should be taxed as ordinary income, since private equity funds are in the active trade or business of developing and selling businesses.