The CLS Blue Sky Blog

Latest from The CLS Blue Sky Blog - Page 2

February 18, 2021

It is becoming clearer to investors and corporate managers that material environmental, social, and corporate governance (ESG) issues need to be managed as part of an organization’s business strategy. Climate change, racism, economic inequality, water scarcity, cybersecurity threats – these are just a few of the material ESG issues posing risk and opportunity. Unfortunately, our research finds that board members may not be up to the task. We analyzed the credentials of each of the…

The CLS Blue Sky Blog

Skadden Discusses “The Year of the SPAC”

By Christopher M. Barlow, C. Michael Chitwood, Howard L. Ellin, Michelle Gasaway & Gregg A. Noel

February 18, 2021

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Transactions by special purpose acquisition companies, or SPACs, exploded in 2020, resulting in a 320% increase in the number of SPAC initial public offerings (IPOs) compared to 2019. SPACs have been around for 15 years and now are established as a legitimate alternative to a traditional merger or IPO. This is due in part to an evolution of the SPAC vehicle, which now offers enhanced investor protections and positions sophisticated managers as “sponsor teams” that…

The CLS Blue Sky Blog

How Stricter Disclosure Rules for Private Meetings Affect Stock Price Informativeness and Volatility

By Robert M. Bowen, Shantanu Dutta, Songlian Tang & Pengcheng Zhu

February 17, 2021

Private meetings between management and investors occur worldwide and are generally held at corporate headquarters with invited investors and sell-side analysts (a.k.a., site visits). Ng and Troianovski (WSJ, 2015) report that U.S. investors pay $1.4 billion a year to securities firms that can arrange face time with executives. These meetings differ from other management-investor interactions such as investor conferences and analyst or investor days in that they are generally not publicized in advance and their…

The CLS Blue Sky Blog

Acting FTC Chair Slaughter Speaks on Protecting Privacy and Data Security

By Rebecca Kelly Slaughter

February 16, 2021

Thank you for inviting me to speak with you all today. The President named me as Acting Chair just a few weeks ago, and I’m incredibly excited about the opportunity to lead the FTC in these challenging times. It is fitting that one of my first speeches in this new capacity will be about privacy and data security, because these issues are so important to consumers, to the FTC, and to today’s information economy. I…

The CLS Blue Sky Blog

The Myth of Dual Class Shares: Lessons from Asia

By Min Yan

February 16, 2021

Companies with dual class shares have, as the term suggests, two (or more) classes of common stock. One class gives its holders voting power proportionate to their equity shareholdings. The other offers a group of shareholders, normally corporate insiders, weighted voting rights, which allow the insiders to retain control with less than majority ownership of the company. The recent wave of high-profile technology giants, from Google to Facebook, that have gone public with dual class…

The CLS Blue Sky Blog

Gibson Dunn Discusses EU Developments in Corporate Human Rights Due Diligence

By Susy Bullock, Allan Neil & Alexa Romanelli

February 15, 2021

The concept of mandatory corporate human rights due diligence is gaining momentum, both within Europe and on the international stage In this two-part alert, we examine key global legislative developments and proposals on this important topic. In Part One, we look at very recent steps taken by the institutions of the EU towards implementation of legislation at a pan-European level. In Part Two, we will consider developments at a national level within the EU and…

The CLS Blue Sky Blog

How Regulatory Stress Tests Affect Bank Lending

By Falk Bräuning & José Fillat

February 15, 2021

The Dodd-Frank Act, enacted in 2010 in the wake of the Great Recession, introduced mandatory stress-testing for the largest U.S. banks. Dodd-Frank Act Stress Testing (DFAST) was intended to ensure that banks have sufficient capitalization to absorb the losses they may experience in an economic downturn and, more importantly, continue providing credit to the economy. The stress-testing exercise, which is conducted by the Federal Reserve, uses hypothetical macroeconomic scenarios to predict a bank’s portfolio return…

The CLS Blue Sky Blog

King & Spalding Discusses SEC’s Potential Focus During Biden Administration

By Alec Koch, Carmen Lawrence, Andrew Michaelson & Matthew B. Hanson

February 11, 2021

For the next several weeks and months, intense focus will be trained on determining the priorities of the Biden administration. We believe that at the Securities and Exchange Commission (“SEC”), the new administration will ramp up examinations and investigations of investment advisers, and specifically advisers to private funds. The industry has certainly been in growth mode. By the SEC’s own calculations, the number of private funds increased by nearly one third during the past four…

The CLS Blue Sky Blog

The Voting Premium of Stock

By Doron Levit, Nadya Malenko & Ernst G. Maug

February 11, 2021

Holders of large blocks of a company’s shares are pervasive in developed economies. La Porta et al. (1999) find that only 17 percent of large firms in countries with strong shareholder protection qualify as widely-held, and Holderness (2009) shows that 96 percent of large U.S. firms have blockholders who own at least 5 percent of a company’s stock. Blockholders influence corporate policies in many ways, with voting being arguably the most important, as it empowers…

The CLS Blue Sky Blog

Goodwin Procter Discusses CFIUS Process for “Non-Notified Transactions”

By Richard L. Matheny III, Jacob R. Osborn, James Brower, Amy S. Josselyn & Justin C. Pierce

February 10, 2021

Much has been reported in the media about the efforts of the Committee on Foreign Investment in the United States (CFIUS) to investigate — and, where appropriate, mitigate, or even divest — transactions that the parties did not submit to CFIUS for review before they were consummated (so-called “non-notified transactions”). A recent Wall Street Journal article called attention to this worrisome trend, noting the Committee’s growing sophistication, enhanced funding for this outreach, appetite for investigating years-old investments,…

The CLS Blue Sky Blog

The Duty of Care for Board Members Should Include Competence in ESG

Skadden Discusses “The Year of the SPAC”

How Stricter Disclosure Rules for Private Meetings Affect Stock Price Informativeness and Volatility

Acting FTC Chair Slaughter Speaks on Protecting Privacy and Data Security

The Myth of Dual Class Shares: Lessons from Asia

Gibson Dunn Discusses EU Developments in Corporate Human Rights Due Diligence

How Regulatory Stress Tests Affect Bank Lending

King & Spalding Discusses SEC’s Potential Focus During Biden Administration

The Voting Premium of Stock

Goodwin Procter Discusses CFIUS Process for “Non-Notified Transactions”

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