Securities

THE LONG-TERM EFFECTS OF HEDGE FUND ACTIVISM

Lucian A. Bebchuk,* Alon Brav,** and Wei Jiang***

We test the empirical validity of a claim that has been playing a central role in debates on corporate governance—the claim that interventions by activist hedge funds have a detrimental effect on the long-term interests of companies and their shareholders. We subject this claim to a comprehensive empirical investigation, examining a long five-year window following...

The Delaware Court of Chancery is a unique court that specializes in transactional jurisprudence. Due to Chancery’s expertise in and exposure to corporate litigation, its decisions act as “rules” for most corporate actors. However, Chancery is not the only actor in the corporate law space, nor is it the most powerful. The SEC can—and has—intervened in state law by creating federal corporate law. In recent years, Chancery has issued...

LEGAL DIVERSIFICATION

Kelli A. Alces*

The greatest protection investors have from the risks associated with capital investment is diversification. This Essay introduces a new dimension of diversification for investors: legal diversification. Legal diversification of investment means building a portfolio of securities that are governed by a variety of legal rules. Legal diversification protects investors from the risk that a particular method of minimizing agency costs will prove...

Much attention has recently been given to the current Securities and Exchange Commission reporting requirements for Schedule 13D, the beneficial ownership form many investors must file to report their equity holdings. However, relatively less focus has been given to the Schedule 13G, the short-form filing option, which requires less infor­mation and tends to attract less attention. The choice between the 13G or the 13D filing can come down...

In 1970, Congress enacted the Fair Credit Reporting Act (FCRA) to address concerns that inadequate safeguards existed to protect consumers in their interactions with credit reporting agencies. Government regulation of credit reporting is critical because the structure of the credit reporting industry does not adequately incentivize credit reporting agencies to maintain accuracy in consumers’ credit reports. Since the enactment of the FCRA, the...

Is the Price Right? An Empirical Study of Fee-Setting in Securities Class Actions

Lynn A. Baker,* Michael A. Perino,** and Charles Silver***

Every year, fee awards enable millions of people to obtain access to justice and strengthen the deterrent effect of the law by motivating lawyers to handle class actions. But little research exists on why judges award the amounts they do or whether they size fee awards correctly. The process remains a black box. Through a detailed study of 431 securities class actions that settled in federal district courts from 2007 through 2012, this Article...