From a practical standpoint, the most significant part of the 1970 Milton Friedman essay in the New York Times was the headline: “The Social Responsibility Of Business Is to Increase its Profits.”  For a half-century, that phrase has been used to summarize the essay, and alongside Friedman’s similar views in a 1962 treatise, also used in support of “shareholder primacy” as the bedrock of American capitalism.  “Shareholder primacy” and “Friedman doctrine” became interchangeable.  The Friedman…

On August 31, 2020, three divisions of the US Commodity Futures Trading Commission (CFTC) issued revised no-action letters providing additional relief to swap dealers (SDs), end users, and other market participants from registration requirements; business conduct standards; uncleared swap margin requirements; mandatory clearing; and trade execution requirements as a result of the looming discontinuation of the London Interbank Offered Rate (LIBOR) and other interbank offered rates (IBORs) and the transition to risk-free rates (RFRs). The…

Since the start of the COVID-19 pandemic, everyone from politicians to reporters to ordinary Americans have been talking about drug treatments, vaccines, and the Federal Drug Administration (FDA) approval process. These discussions have centered on vaccine developments by well-known pharmaceutical giants such as Pfizer and AstraZeneca as well as emerging startups like Moderna Therapeutics and BioNTech. Almost a decade ago, lawmakers and regulators took steps to improve capital access for startups by easing the regulatory…

Technology has driven many efficiencies in our markets.  Technology can also enhance investor protection.  Today, we recognize that, as a result of technological change, information can and should be made available to over-the-counter (“OTC”) market investors in a more timely manner. Ensuring that investors have access to material information so they can make informed investment decisions is a cornerstone of our federal securities laws.  Information about companies in the OTC market is less available than…

In 2013, Delaware passed legislation adopting a new corporate form, the public benefit corporation (PBC), with a view to allowing directors of for-profit corporations to take actions not just in pursuit of stockholder returns, but also with the “[intent] to produce a public benefit or benefits and to operate in a responsible and sustainable manner.” [1] Over the past few years, thousands of social ventures, as well as more traditional companies, have incorporated as PBCs,…

Managers, investors, the financial press, and other capital market participants often use categories to describe firms or their securities. Common examples include “bellwether,” “blue chip,” “tech,” “penny,” and “start-up.” Although these categories may increase a firm’s visibility, they can lead market participants to overlook individual firm characteristics and thus bias their evaluation of a firm. In a recent study, we examine how firm categorization influences investor behavior. In particular, we examine how a firm’s status…