Sunsets Are Not Always Pretty

By: Jordan Sayfie, 2L, Journal Staff Member

Sunset provisions in legislation can serve a legitimate function in narrowing laws in a way that ensures they serve their intended purpose. Additionally, sunset provisions force legislators to determine specific goals before enacting laws, and can make a piece of unfavorable legislation more palatable. Because sunset provisions force legislators to set priorities and outline concrete goals, many voters see sunset provisions as preferable when it comes to tax legislation.

Risk Management and Corporate Governance Under Dodd-Frank

By: Jordan Ebert, 2L, Journal Staff Member

On October 6th, 2014, President Obama met with lead financial regulators and senior advisors on the economy to discuss ongoing implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act, where the President urged participants to further consider prevention of excessive risk-taking across the financial system along with compensation rules and capital standards. Just a few days after this meeting, the Basel Committee on Banking Supervision—the leading global authority on banking supervisory matters and standards—issued enhanced guidance on principles of corporate governance for banking institutions. Commentators note that such developments reflect a trend among regulators in stressing the significance of a top-down approach to risk management.

Corporate Governance: When Should a Firm’s Executives Face Personal Liability?

By: Sheila Murugan, 2L, Journal Staff Member

In his article set to be published in the Michigan State University College of Law Journal of Business and Securities Law, Issue 1, Volume 15, Greg Zipes proposes a code of conduct that requires firm executives to face a pay cut for failure to comply with corporate governance. Essentially, he states a binding code should be enforced if certain standards are not met.  

A Shift Toward Executive Accountability

By: Laura Pioch, 2L, Journal Staff Member

People everywhere seem to rightfully cause uproar when corporate transgression creates major afflictions on the population at large. Though these failures negatively affect individuals throughout the world, how do the directors and executives of these corporations fair? Pretty well, it seems.

Burning the Ships: A Fresh Look at Corporate Codes of Conduct

By: Gregory VanderWoude, 3L, Journal Staff Member

Most readers are familiar with the apocryphal story of the explorer Cortes, who burned his fleet of ships upon arriving in the New World, as a means of forcibly motivating his crew by eliminating any means of retreat. See e.g.,, Although Cortes was no corporate executive, his tactical motivation proved effective. Mr. Zipes, in his note on Codes of Conduct that is set to be published in Michigan State University College of Law Journal of Business and Securities Law, Volume 15, Issue, proposes a similar tactic—motivating corporate executives to better police their companies by triggering an automatic reduction in pay if subordinate employees commit violations. Mr. Zipes explains, that by eliminating a scienter requirement, corporate agents are thus highly motivated to enact strict controls for subordinates’ actions. In the same vein, attorneys who draft opinion letters must disgorge their fees if their opinion letters are later cited to in criminal allegations.

Icahn Trimming the Fat in eBay’s Board of Directors

By: Daniel Brick, 3L, Journal Staff Member

Corporate governance issues permeate the business world, and now more than ever shareholders demand more accountability from members of the board of directors.  Directors and executives often receive lavish compensation and bonus packages regardless of their performance.  This has many shareholders up in arms engaging in Caremark claims, derivative claims against the board for oversight failures. In re Caremark Int’l Inc. Derivative Litig., 698 A.2d 959 (Del. Ch. 1996).

Science Based Start-Ups Return

By: Patricia Weir, 2L, Journal Staff Member

A shift is occurring in the types of start-ups that venture capitalist are backing.  Hiroko Tabuchi recently wrote a New York Times Article titled “Venture Capitalists Return to Backing Science Start-Ups,” which stated that venture capitalists are returning to back science, engineering, and clean-technology start-ups after shying away from them to support more technology focused start-ups.  The article states that in the first half of 2014 industrial and energy start-ups have attracted $1.24 billion in venture capital financing, which is “more than twice as much as in the period a year earlier, according to statistics from the National Venture Capital Association.”  Also biotechnology start-ups have attracted $2.93 billion in the first half of 2014.

The Bitcoin Sweep

By: Courtney Schoch, 2L, Journal Staff Member

Even if you aren’t an expert on what Bitcoin is, you have probably still heard the term.  According to The Wall Street Journal, Bitcoin, an electronic currency,  is created by individuals and businesses, not by the government.  Mr. Harvey, a professor of finance at Duke University,  stated that the main purpose of Bitcoin “is to enable the efficient exchange of property via minimal transactional costs and a high level of security.”

Shapiro's Discussion Since the Appellate Decision

By: Jewell Briggs, 2L, Journal Staff Member

In her 2013 article, Lessons From SEC v. Citigroup: The Optimal Scope for Judicial Review of Agency Consent Decrees, that is set to be published in Volume 15, Issue 1 of the Michigan State University Journal of Business & Securities Law, Dorothy Shapiro capitalized on the discussions resulting from Judge Rakoff’s controversial holding in S.E.C. v. Citigroup Global Mkt., Inc., 827 F. Supp. 2d 328 (S.D.N.Y 2011), so to propose a clear, concrete, and deferential standard for courts to apply in cases of judicial review of agency consent decrees.

Omnicare Provides an Opportunity to Review Scienter Standard

By: Joshua Halen, 3L, Managing Editor of Publication

In 2007, the Private Securities Litigation reform Act (“PSLRA”) undertook a major change when the United States Supreme Court issued its ruling in Tellabs, Inc. v. Makor Issues & Rights, 551 U.S. 308 (2007). Prior to this, there was confusion over the application of the PSLRA’s intent requirement. The PSLRA requires plaintiffs to “state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind (scienter).” Several circuits interpreted this requirement differently. This circuit split led the Court to hear arguments in Tellabs. In defining what the PSLRA’s requirements were, the Court stated that strong inference meant “more than merely plausible or reasonable- it must be cogent and at least as compelling as any opposing inference of nonfraudlent intent” and that courts must view all allegations of scienter collectively. Tellabs, 551 U.S. at 314.


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