As the number of consumers in China continues to grow, some Chinese conglomerates are raking in cash and looking for ways to diversify their businesses. What are they doing with this money? Recently, they have been looking to buy U.S. investment firms. Specifically, Chinese businesses are attracted to firms that practice more passive investment strategies, like investing in “funds of funds.”
Founders v. Investors: Snap Inc.’s IPO is the Latest Battle in a Longtime War
Snapchat’s parent company, Snap Inc., will soon have its initial public offering (IPO). Although Snap Inc.’s IPO may seem like a typical startup success story, it differs in important ways that could have a massive market impact.
Pearson Considers Selling its Stake in Penguin Random House
On January 18, 2017, the British multinational Pearson PLC informed its intention to drop its 47% share in Penguin Random House – PRH. This announcement occurs only three years after the biggest merger of publishing companies, which currently is responsible for 25% of the worldwide sale of books.
Rolls-Royce to Pay $817 Million to Resolve Bribery Investigation
Rolls-Royce, the United Kingdom-based manufacturer and distributor of power systems for the aerospace, defense, marine and energy sectors, agreed to pay the United States nearly $170 million as part of an $800 million global resolution of investigations by the United Kingdom Serious Fraud Office (SFO), United States Department of Justice (DOJ) and Brazilian Federal Prosecution Service (MPF) into a long-running scheme to bribe government officials in exchange for government contracts. Rolls-Royce apologized after it was found paying bribes, including a luxury car and millions of pounds worth of cash, to middlemen in order to secure orders in countries including Indonesia, Russia, and China.
In a Sale Gone Awry, A Lesson for Other Deal Makers
According to Reuters, GFI Group supported brokerage, trading, and clearing services, and traded technologies to global markets. In 2016, the GFI board sold GFI to CME—a global derivative market focused on trading, clearing, and regulation—even though at the end of the bidding war, CME offered a lower bid of $5.85 per share. Meanwhile, the competing buyer, BGC, a global brokerage company, offered $6.10 cash per share. This sale to CME was approved when the board overruled the decision of a committee of independent directors.
Supreme Court Appointment Threatens Long-Standing Chevron Doctrine
Agency law is having a moment in the spotlight. With the nomination of Judge Neil M. Gorsuch to the Supreme Court, attention is being drawn to issues where his vote stands to make an impact. One such issue is Chevron deference, a long-standing agency law doctrine followed by the Supreme Court for over thirty years. Chevron deference has been cited in decisions affecting numerous agencies ranging from the EPA to the SEC.
Tarullo Stepping Dow, Leaving Three Vacancies on the Fed’s Board
Fed Governor Daniel K. Tarullo, 64, announced he would resign in April in a two-sentence letter on February 10, 2017 without too much explanation. His term does not end until 2022. Mr. Tarullo’s departure would bring the number of vacancies on the Board to three. Senate Republicans have preserved two vacancies by refusing to hold a vote on then-President Obama’s nominations –– the same tactic they used to hold a seat vacant on the Supreme Court.
Hudson’s Bay Takeover Offer to Department Store Titan, Macy’s
On February 3, 2017, multiple news outlets reported that Hudson’s Bay Co. (HBC), the Canadian owner of Lord & Taylor and Saks Fifth Avenue, moved to takeover Macy’s Inc., the biggest U.S. department-store chain. According to the Wall Street Journal, the conversations between the two companies are still at a preliminary stage and the proposed deal is not assured.
After 12 Years, A.I.G.’s Former Chief Executive Agreed to Settle in Accounting Fraud Case
On February 10, 2017, Maurice Greenberg (A.I.G’s former CEO) and his co-defendant Howard Smith (A.I.G.’s former CFO) agreed to settle with New York Attorney General, Eric T. Schneiderman on an accounting fraud case that lasted for more than 12 years. That settlement ends a civil case that began in 2005 under Spitzer – the then-New York Attorney General – and was continuously delayed by a flurry of defense motions and eight pre-trial appeals.
Suit Challenges Denial of Education Loans to Unauthorized Immigrants
Borrowing money from banks to finance our education is not something we typically view as a luxury. But, it is. Students who are undocumented immigrants, like Mitzie Perez, do not enjoy the privilege of taking out student loans from most banks due to their immigration status. In response, Ms. Perez filed a federal lawsuit in San Francisco against Wells Fargo, a lender that allegedly refused her loan application because she is an undocumented immigrant. The California League of United Latin American Citizens has joined the suit as a plaintiff while it seeks class-action status for the discriminatory practice of denying student loans.