What hath Madoff Wrought? Private actions under the Martin Act

by Daniel Scheeringa October 27 2010, 21:00
The New York statute that has given Attorneys General the power to take on Wall Street, and catapulted many of them into the governor’s mansion, is about to undergo a radical change if a Southern District judge’s ruling is upheld. In Anwar v. Fairfield Greenwhich, the court found that New York's Martin Act does not preempt private tort actions. This article considers the potential effects of such a ruling on the securities law landscape. [More]

Temporal Folly in the Creating Small Business Jobs Act of 2010

by Chris Collier October 24 2010, 16:17
The Creating Small Business Jobs Act of 2010, Pub. L. No. 111-240, 124 Stat. 2504 (Title II, H.R. 5297) became law on September 27, 2010. The Joint Committee on Taxation (Committee) estimates that the tax provisions will provide $56 billion in relief to small businesses in 2011. However, the act's actual value is questionable. This article will analyze the potential effects of the legislation. [More]

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Tax

A Solution to Executive Over-Compensation?

by Stuart Wallace October 15 2010, 18:56
Many television commentators and academics claim that executive compensation is skyrocketing out of control. While the commentary on television is most likely rooted in populism, academics explain this contention by resorting to board capture theory. According to board capture theory, corporate boards of directors are dominated by their firm’s top executives. Thus, when an executive negotiates his compensation, he is effectively negotiating with himself and people who want to keep him happy. Therefore, executives get substantially more favorable compensation packages than they would if their contracts were negotiated in an arms-length and adversarial manner.

This article will examine a recently presented solution to this problem. Professor Harwell Wells and Professor Randall Thomas argue that the courts can step in to solve the problem of executive over-compensation based on board capture in their working paper “Executive Compensation in the Courts: Board Capture, Optimal Contracting and Officer Fiduciary Duties.” [More]

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Corporate

Possible Change on the Horizon for Foreclosure Law

by Robert Heath October 11 2010, 13:27
The current financial crisis ushered in by the collapse of the sub-prime mortgage market has shaken the foundations of our financial markets, exposed numerous Ponzi schemes, most infamously that of Bernard Madoff, and resulted in a tremendous increase in home foreclosures and bankruptcies. In many of the current bankruptcy cases the line between a fraudulent conveyance and a legitimate transfer can make a difference of millions of dollars for the legitimate creditors. In the realm of real estate, this situation has placed on the courts the burden of deciding which is more important: fair and equitable distribution of assets among creditors, or the historical distinctions between fraudulent conveyance law and foreclosure law. [More]

3G’s Whopper of a Problem: the Loss of the Super Fan

by Claire Sheppard October 9 2010, 13:38
On September 2, 2010, 3G Capital announced that it planned to acquire Burger King Holdings. The deal itself is valued between $3 billion and $4 billion with 3G currently working on the tender offer of $24 per share for the company’s outstanding shares. With Burger King being the world’s second largest hamburger fast-food chain, it was not difficult for 3G to find financing for this highly-leveraged buyout. However, is 3G truly ready to tackle Burger King’s problems? [More]

New Process Steel, L.P. v. National Labor Relations Board: Three Months Later

by Charles Ott September 23 2010, 20:02
On June 17, 2010, the Supreme Court held in New Process Steel, L.P. v. NLRB that over 600 decisions made by two-member panels of the National Labor Relations Board (NLRB) must be vacated and reheard because the procedure of having two-member panels hear a dispute did not comply with the National Labor Relations Act (NLRA). The majority and the dissent both based their decisions on their interpretation of the statute. However, in his dissent, Justice Kennedy also highlights the fact that when Congress passed the NLRA, they surely did not intend to allow the Labor Board be left defunct for a long period of time. [More]

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Labor

The Cayman Islands and the John Grisham Effect: Yes, Everything Changed

by Isabel Freitas Peres April 29 2010, 01:24
In May 2009 American President Barack Obama spoke of how an address in the Cayman Islands housed 12,000 companies. Alluding to the possibility of illegal activity, he noted that this location was either the biggest building in the world or “the largest tax scam in the world.” [1] This image of Offshore Financial Centers (OFCs) as havens for wrongdoing is generally held throughout the world.

Recent data indicates that the Cayman Islands holds over 670 billion American Dollars in banking assets from international investors[2]. Because of such statistics, these small islands are considered a global villain, a haven for illegal capital. According to the OECD Harmful Tax Competition: An Emerging Global Issue (1998 Tax Report) jurisdictions that (a) imposes no or only nominal taxes, (b) lacks policy of effective exchange information, (c) lacks transparency and (d) has no requirement of “substantial activity” is identified as a tax haven[3].

A Background Information Brief released by the OECD (Organisation for Economic Co-operation and Development) in March 2010 acknowledged the implementation of the Cayman’s actions towards transparency and information exchange. Despite this report’s recognition of the Caymans, it touched upon only a few of the measures that have been taken by the Cayman Islands in the last few years. These improvements in the Cayman’s internal structure and the regulatory actions taken by the Cayman Islands have enhanced the islands’ status within the international community. The Cayman’s pejorative title as a “tax haven” is, therefore, incorrect.



First, this article will examine the true atmosphere of the Cayman Islands, and how this British territory and the 5th largest banking center in the world is cooperating with the OECD and other jurisdictions by partaking in several Tax Information Exchange Agreements (TIEAs). Second, this article also aims to defend the valuable and important role of international policy distinctions among nations as a pursuit of effectiveness in the financial system worldwide [More]

Provena Covenant Medical Center v. Department of Revenue: The Decision That May End Charitable Exemptions for Nonprofit Hospitals

by Marianna Kiselev April 26 2010, 11:28
The recent decision by the Illinois Supreme Court regarding tax exemption for hospitals is troubling for the already volatile and uncertain future of many hospitals that are facing increasing difficulties in the current economic market. The Illinois Supreme Court held that Provena Medical Center in Urbana does not provide enough charity care to qualify for the tax exemption provided for hospitals that care for uninsured and poor patients without generating a profit or collecting fees.[1] The decision has generated significant criticism for relying on old precedent, failing to take into account current economic conditions, and for failing to provide clear guidelines for nonprofit hospitals that want to qualify for tax exemption in Illinois.[2] The implications of this decision while not precisely known can have wide ranging consequences for hospital financing and for access to healthcare for low income and uninsured individuals. What are hospitals required to do to quality for tax exemption in Illinois? What financial implications does this have on nonprofit hospitals? What implications does this have on patients? Will this decision effectively end charitable exemptions for nonprofit hospitals? This article will attempt to briefly outline the issue and provide the possible policy implications of this decision. [More]

The Failure of the Green Movement

by Lu Sun April 25 2010, 23:16
The so-called "Green Movement" has been a hot topic in recent years. However, the fact of the matter is that this movement has not spawned any real change. This is a result of outside factors such a government regulation and economics which must be changed first before the Green movement can advance. [More]

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Happiness and its Effect on Economic Development and Business Profitability

by Michael Lenhardt April 25 2010, 20:39
“Policy decisions at the organizational, corporate, and governmental levels should be more heavily influenced by issues related to well-being––people’s evaluations and feelings about their lives.” This recent trend in economic development literature, that policy decisions at the government and corporate level should be influenced not by profit maximization but their effect on people’s subjective well-being, is gaining acceptance in the real world. Empirical research and analysis shows that policy aimed at improving workplace happiness not only has an impact on employees subjective feelings of well-being, but also improves worker productivity and by extension corporate profitability. [More]

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