Retirees Win Against Mining Industrialist

By Claire Oxford, J.D. Candidate 2018 | Posted on

In a nearly unprecedented turn of events, the occupant of one of the largest single-family dwellings in the U.S., mining industrialist Ira Rennert, has settled with a group of retirees from one of his subsidiary companies and agreed to pay their pensions in full.

In 2011, Rennert’s conglomerate, Renco, purchased R.G. Steel for $1.2 billion. At the time, Renco’s pension was underfunded by almost $70 million. Shortly after the acquisition, Renco struck a deal with the private equity group Cerberus in a purported attempt to find more funding for R. G. Steel. The deal included Cerberus’s purchase of a 24.5 percent equity stake in R. G. Steel – causing Renco’s ownership to fall under the 80 percent cutoff to legally be considered the controlling group and therefore responsible for pension obligations. Though Renco executives claim they acted appropriately, the government believes the intention was to avoid being held accountable for the pension payments.

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No Criminal Charges against Citibank Executives for Pre-Crisis RMBS Sales

By Vartika Jain, LL.M. Candidate 2016 | Posted on

Citigroup executives involved in the sale of subprime mortgage-backed securities are off the hook in the U.S. as authorities decided not to pursue any criminal charges against them. The acknowledgement came in a report issued by one of the agencies tasked with the Citigroup probe, the Federal Housing Finance Agency’s Office of Inspector General (FHFA OIG). The report marks the probe closed and outlines the investigation, the epicenter of which was Citibank’s sale and issuance practices with respect to subprime mortgage-backed securities in the 2006-2007 period.

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Sports Authority Declares Bankruptcy

By Brigid McCurdy, J.D. Candidate 2017 | Posted on

Sporting goods retailer Sports Authority recently filed for bankruptcy, claiming over $1 billion in debt. The retailer cited a variety of company issues in its bankruptcy filing, including acquisitions that led to inconsistent store formats, expensive leases, frequent executive turnover, and outdated information systems. The U.S. Bankruptcy Court in Delaware has already approved a $595 million bankruptcy loan for the sporting retailer, and has given the company authorization to immediately begin using up to $275 million of the loan and to start liquidating stores.

As part of the bankruptcy loan agreement, Sports Authority plans to find a buyer for its business by April. Potential bidders include Modell’s Sporting Goods and asset manager Columbia Threadneedle Investments. In the meantime, Sports Authority will close or sell 140 of its 450 nationwide stores.

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“Tenure voting” as a New Voting Structure for Corporate Shareholders

By Aicha Ahardane, LL.M. Candidate 2016 | Posted on

According to a new paper by UC Berkeley law professor Steven Davidoff Solomon and Wilson Sonsini Goodrich & Rosati lawyers David Berger and Aaron Benjamin, the dual-stock structure of public companies divides shareholders into two categories: the haves and have-nots of corporate governance.

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Thinking About Gender Quotas in the Boardroom

By Assaf Ariely, LL.M. Candidate 2016 | Posted on

A recent study involving thousands of public companies in 91 countries found a positive correlation between profitability and the number of females in senior management positions (including top executives and boards of directors). Despite this correlation, the study found that, as of 2014 approximately one-third of companies worldwide have no women in senior management; 60 percent have no female board members; 50 percent have no female top executives; and only 5 percent have a female CEO.

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US Country-by-Country Reporting Rules Expected to Finalize Early

By Vinh-Khoi Le, J.D. Candidate 2016 | Posted on

Robert Stack, Deputy Assistant Secretary for International Tax Affairs in the US Treasury Department, said that the country expects to finalize its rules on country-by-country reporting by June 30. This is a full six months earlier than expected under the proposed rules (REG-109822-15). The reason for the regulation’s expedited finalization is that companies meeting threshold level of sales would thereafter be required to file a country-by-country report with their tax return “for all tax years that begin after that date, including years beginning on July 1, 2016, and September 1, 2016.” This follows the OECD’s Base Erosion and Profit Shifting (BEPS) initiative to push for global country-by-country reporting initiatives, among other international tax reforms, to increase transparency. Finalized on October 5, 2015, the discussion on country-by-country reporting (Action 13) can be found here. The sooner the US regulations are finalized, the sooner the initiative can be implemented.

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Monsanto and SEC Reach Settlement over Inaccurate Financial Disclosures

By Samantha Vega, J.D. Candidate 2018 | Posted on

On February 9, 2016, the Monsanto Company (NYSE: MON), a multinational agricultural chemical manufacturer based in St. Louis, Missouri, and the Securities and Exchange Commission (SEC) announced their agreement to settle charges that Monsanto’s public disclosures in fiscal years 2009, 2010, and 2011 had materially misstated the firm’s financial results. The provisions of the settlement require Monsanto to pay the SEC an $80 million fine and retain independent compliance monitors.

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National Legal and Policy Center Mounts Question for MBA President David H. Stevens

By Myriam Denis, J.D. Candidate 2016 | Posted on

On February 29, 2016, a nonprofit ethics watchdog, National Legal and Policy Center (NLPC), launched a call to the U.S. Attorney for District of Columbia and the Inspector General of the Department of Housing and Urban Development for an in-depth investigation of David H. Stevens, President and CEO of the Mortgage Bankers Association (MBA). The NLPC argues that Stevens might have violated ethics laws when he was acting as commissioner of the Federal Housing Administration (FHA) for the U.S. Department of Housing & Urban Development (HUD). In December 2015, Campaign for Accountability made a similar request to the Justice Department. These groups want government officials to investigate whether Stevens lobbied on some of the same issues he worked on when he was a FHA commissioner.

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Advisory Committee of CFTC Suggests an Abandonment of Option Limits

By Xiaolin Ma, LL.M. Candidate 2016 | Posted on

On February 25, 2016, the Energy and Environmental Markets Advisory Committee (EEMAC) of the Commodity Futures Trading Commission (CFTC) released a report, advising the CFTC to abandon its plan for position limits on the number of futures contracts a trader can hold on certain commodities such as oil and natural gas. The EEMAC was created under the 2010 Dodd Frank Act and functions “to advise the Commission on important new developments in energy and environmental derivatives markets that may raise new regulatory issues, and the appropriate regulatory response to ensure market integrity and competition, and protect consumers.”

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Ganjapreneurs Are Baking Billions: A Look into the $5.4 Billion Pot Business

By Melani Tiongson, J.D. Candidate 2018 | Posted on

In 2013, Colorado made pioneering strides by becoming the first state to legalize the recreational use of marijuana. Fast-forward to 2016, and marijuana can now be used in three more states recreationally and in a total of 23 states medically. In tandem with the exponential boom of marijuana legalization is the sharp growth of the legal marijuana market. The legal cannabis market achieved $4.6 billion in sales in 2014 and was met with even more success in 2015 when it pulled in an estimated $5.4 billion, according to ArcView Market Research, the leading provider of market data on the cannabis industry.  Not surprisingly, “edibles and other infused products” comprise at least half of legal marijuana sales in the United States. This number will likely continue to grow as more states legalize the recreational use of marijuana in coming years.

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