Bite-Sized Business Law

It seems that the very purpose of a corporation, to make money over the long run, has been dashed by incentives to perform quarter after quarter. As the American attention span diminishes while our hunger for instant gratification and constant growth intensifies, how should the law evolve? How should corporations adapt? What is the SEC’s role in reigning it all in? During this episode, we are joined by UCLA Law Professor James Park, a leading expert in securities regulation, public companies, and securities fraud. Join us as we discuss his book, The Valuation Treadmill which delves into familiar case studies, including Xerox, Penn Central, and Apple, to consider how the constant pressure to meet projections causes public companies to commit securities fraud. Touching on the PSLRA, Sarbanes-Oxley, Dodd-Frank, and the concept of real earnings management, we discuss the pressure public companies face to meet earnings projections and the lengths to which they’ll go to keep pace with such projections. Is valuation pressure inevitable in our economy or are there ways around it? Hear James’s ideas, learn more about what drives certain companies to commit securities fraud, and decide whether there’s a way off of this treadmill. Key Points From This Episode:•The shift that has occurred in keeping with the reduced American attention span.•Introducing guest James Park, professor, author, and expert.•His definition of the Valuation Treadmill.•The utility of forecasting and the related dark side.•Xerox as a case study.•Penn Central and the surrounding scandal that caused us to lose faith in managers.•How the story of Apple’s early products demonstrates the necessity of understanding the risk of investing in tech.•The PSLRA passed in 1995 and how it offers protection for projections.•Considering criticisms of the PSLRA and to what extent it was successful. •Where Sarbanes-Oxley and Dodd-Frank fit into this conversation.•The method of real earnings management.•Why there are bigger losses at stake when misrepresenting the numbers.•Finding better ways to embrace disclosure.•The impact executive compensation packages have on securities fraud.•James’s suggestion that proving a motive is sufficient and why it is controversial.•Why the duty disclose is only going to get stronger.  Links Mentioned in Today’s Episode:James Park at UCLAJames Park on LinkedInThe Valuation TreadmillDiana Henriques on Taming the StreetFordham University School of Law Corporate Law Center

Insurance is central to our economy and lives, from global catastrophes to athletes’ pitching arms. Unsexy at first blush but completely fascinating upon deeper examination, insurance is an undeniably essential area of the law. Today’s guest has more than three decades of experience in litigating re-insurance and insurance coverage disputes: Michael Goldstein, Senior Counsel at Mound Cotton Wollan & Greengrass. Tune in as we unpack the areas of human life that insurance law touches, climate and digital risks faced by the industry, and the myriad of career paths in insurance law. Touching on the complex world of war exclusions and policies, we also discuss existing legal precedents and the challenges posed by today’s geopolitical instability at home and abroad. Don’t miss this engrossing conversation exploring celebrity insurance, natural disasters, and much more! Key Points From This Episode: •The essential role that insurance occupies in our economy and our lives.•An overview of Michael’s experience in re-insurance and insurance law.•His introduction to insurance and how he came to understand its pivotal position in our world.•What re-insurance is and the remarkable size of the industry.•Differentiating between horizontal and vertical coverage.•Natural disasters and the impact of climate change on insurance risk.•Risks posed by AI information (and misinformation).•Whether or not insurance firms should be taking risks in the current landscape.•Michael weighs in on the dire climate situation in Florida.•Insurance for war and geopolitical policies and the war exclusions included in war policies.•How the courts rule on war exclusions and unrest.•COVID-19 and the surrounding rulings for this Act of God.•  The role of insurance giants in the 2008 financial crisis.•  AIG’s bailout and it’s repayment in full of $182.3 billion in December 2012, leaving taxpayers with a $23 billion profit.•Insight into insuring athletes and celebrities. •Event cancellation insurance and hole-in-one insurance.•The effect of the number of occurrences on insurance.•How the insurance industry remains agnostic about political issues. Links Mentioned in Today’s Episode:Michael Goldstein on LinkedInMichael Goldstein at Mound Cotton Wollan & GreengrassMound Cotton Wollan & Greengrass2024 Global Risks ReportFordham University School of Law Corporate Law Center

Bitcoin is a controversial subject, but it is no secret that it is becoming an incredible opportunity for investment. Today’s guest, Anthony Scaramucci, was one of the earliest supporters of Bitcoin and has had an incredible career in business as an investment fund manager and in politics as former White House communications director. He joins us today to talk about Bitcoin’s big ETF victory. Tuning in, you’ll hear about Anthony’s impressive background, what led him to start buying Bitcoin, how his company, Sky Bridge, is invested in Bitcoin, the huge Bitcoin ETF controversy, and more! We delve into why Bitcoin skeptics might simply need more education before discussing why a “boom/bust” cycle is inevitable in society and the importance of patience in investing. Finally, Anthony tells us what to expect for other coins getting ETF approval and what’s happening with Bitcoin abroad. To hear all this and get motivated to do some Bitcoin research, press play now! Key Points From This Episode:•Welcoming today’s guest, Anthony Scaramucci.•Anthony tells us a bit about his background and what led him to work in the White House.•What made Anthony decide to start buying Bitcoin and his company’s investment in Blackrocks’ Bitcoin ETF.•The controversy around Bitcoin ETFs in the USA and why the outcome is a victory.•The DC Circuit Court’s opinion invalidating the SEC’s position on the Bitcoin ETF.•Anthony encourages listeners to do a deep dive into Bitcoin’s potential.•Why Bitcoin skeptics simply misunderstand it.•The inevitability of “boom/bust” cycles in society.•The importance of patience in investing.•How Bitcoin has done since the ETF approval.•Anthony’s prediction about other coins getting ETF approval.•What’s happening with Bitcoin ETFs all over the world. Links Mentioned in Today’s Episode:Anthony Scaramucci on LinkedInAnthony Scaramucci on XAnthony Scaramucci on InstagramSky BridgeSALT.orgFordham University School of Law Corporate Law Center

Today on Bite-Sized Business Law, we discuss the very bad day that Elon Musk had recently as a result of the Delaware Court of Chancery opinion that started with a simple question: “Was the richest person in the world overpaid?” This is the first time that a court of law has overturned a board’s decision on compensation. Here to walk us through exactly what happened (and why) is the esteemed Richard Squire, Professor Of Law at Fordham Law School. Join us as we unpack some of the important considerations raised for boards and independent directors when deciding upon significant compensation awards, why Tesla’s directors maintained a somewhat cavalier attitude concerning the formalities the courts require in these circumstances, and how the sheer size of the grant ultimately influenced the outcome of the decision. We also touch on the precedent that this ruling sets and how it could lead to similar suits against other outrageous CEO pay packages. Be sure to tune in for a fresh take on this “intergalactic corporate conflict!” Key Points From This Episode:•   The story behind the Tesla compensation package that would have paid Musk $55+ billion.•   Whether or not Musk achieved the benchmarks necessary for payout.•   Reasons shareholders sued him over the payout.•   How Tesla’s stock price has responded to the ruling.•   An overview of the plaintiff’s main argument in this case.•   Why the stockholder vote approving Musk’s grant was deemed “not fully informed.”•   What the Delaware safe harbor provisions are and how they might have been achieved here.•   Important considerations for boards and independent directors when deciding on significant compensation awards like this.•   When it becomes necessary for the courts to step in.•   Grounds for appeal and how this decision will impact corporate negotiation strategies.•   How the eye-watering size of the grant factored into the Delaware court’s decision.•   Ways that this case lays the blueprint for companies to safeguard executive pay.•   Why Musk is mad at Delaware and how he could influence business investment there.•   Insight into the appeal of the Delaware Chancery Court ruling.•   Some of the questions we’d like to see addressed if the case is appealed. Links Mentioned in Today’s Episode: Tornetta v. Musk: Post-Trial OpinionRichard SquireRichard Squire on LinkedInFordham University School of Law Corporate Law Center

Back in 2019, the office-sharing company, WeWork, seemed like the next big Silicon Valley success story. WeWork was opening shared office space around the world and was valued at a staggering $47 billion. Since then, the company has suffered one of the most spectacular corporate collapses in recent US history. Following its 2021 IPO, WeWork witnessed a shocking 98% decline in value, ultimately leading it to file for Chapter 11 bankruptcy protection in November of 2023. So, what led to this downfall? And what are the anticipated outcomes of WeWork's bankruptcy? Joining us today to unpack this topic is our very own, Richard Squire, Professor of Business Law at Fordham Law School. Tuning in you’ll learn about the founding of WeWork, its unconventional CEO, the events that led to its bankruptcy, and how this process is expected to play out. We explore why the company was so appealing to investors and employees, the devastating impact of the COVID-19 pandemic, and how bankruptcy is allowing WeWork to salvage what’s working and continue in a new form. To hear all of the details of this fascinating case study be sure to tune in to this informative conversation! Key Points From This Episode:• An overview of WeWork and its business model.• Some background on WeWork Founder, Adam Neumann.• How Neumann’s upbringing on a Kibbutz in Israel inspired his vision for WeWork.• The ethos of sharing at WeWork and how this attracted employees and investors.• What WeWork’s trajectory can teach us about American history.• Neumann’s unusual management style and the problems this caused.• Why Neumann stepped down as CEO in 2019 when the company was about to launch its IPO.• The devastating impact of the COVID pandemic on WeWork and shared office spaces.• Why WeWork’s initial IPO failed, why Neumann left, and how the company rebranded.• An overview of the events that led to WeWork’s bankruptcy.• Breaking down the bankruptcy process and how it played out with WeWork.• Predictions on how WeWork will emerge from this bankruptcy.• How WeWork is renegotiating its leases in different cities.• Mechanisms in the bankruptcy process that help companies continue at a new scale.• Evaluating how different investors might approach these types of companies in the future. Links Mentioned in Today’s Episode:Richard SquireWeWorkThe History of English PodcastKevin Stroud on PatreonSpecial Episode: Richard Squire on the Collapse of Silicon Valley BankSt. Elmo's FireFordham University School of Law Corporate Law CenterWe Edit Podcasts

Change is coming for corporate America. While many of us expect it to arrive in the form of climate disclosures, the SEC is yet to release the proposals they came up with in 2022. How these rules are written is a key factor in shaping the way businesses respond to climate change and other ESG issues. Joining us to explain where things currently stand is Stanford Law School Professor, Colleen Honigsberg. Along with her legal expertise, Colleen holds a Ph.D. in accounting and is a CPA. Tune in to hear why business leaders should concern themselves with climate change, what two key forces are behind the shift in focus on climate activism, the treatment of Greenhouse Gas emission disclosure, and the coming emphasis on human capital. We touch on the role of the ISSB and discuss why climate audits can only offer limited assurance before Colleen shares her perspective on human capital, petitioning the SEC, and more. Don’t miss this informative conversation! Key Points From This Episode:•   Introducing Stanford Law School Professor and CPA, Colleen Honingsberg.•   Colleen’s career journey, which began in accounting.•   How she selected a Ph.D. in accounting with a goal to become a legal professor.•   Why we should care about climate change as business leaders and the ones who advise them.•   Two key forces behind the surge in investment in climate activism.•   Scope 1, 2, and 3 Greenhouse Gas emissions.•  Why the SEC pivoted on Scope 3 emission disclosures. •  The role of the ISSB in dealing with these factors.•   Why climate audits can only offer limited assurance and accuracy.•   Colleen’s perspective on the omission of human capital in financial statements.•   How and why Colleen petitioned the SEC to enact change.•   What to make of the inclusion of human capital in the SEC’s agenda for 2024. Links Mentioned in Today’s Episode:Colleen HonigsbergColleen Honigsberg on LinkedInColleen Honigsberg on ResearchGateFordham University School of Law Corporate Law Center

For years, legal scholars have argued that the Federal Crime Code is broken. One key consequence of this is the alarming rise in white-collar and corporate crime — a shocking portion of which goes misreported and misunderstood. Joining us today to shed light on this urgent topic is Miriam Baer, Vice Dean and Centennial Professor of Law at Brooklyn Law School, whose new book, Myths and Misunderstandings in White-Collar Crime, provides an incisive breakdown of the flaws in our statutory system and what can be done to address it. Tuning in, you’ll learn about the experiences and real-life examples that inspired her to write this book, the problem of overcriminalization and under-enforcement in white-collar crime, her suggested reforms for tackling these systemic issues, and much more. Join us for a fascinating discussion on the state of white-collar crime and the value of conversations about reforming the system. Key Points From This Episode: •What inspired Miriam Baer to write Myths and Misunderstandings in White-Collar Crime.•Who this book is for and why she wanted it to be accessible to a wider audience of readers.•A closer look at overcriminalization and under-enforcement in white collar and corporate crime.•The 2008 financial crisis and the lack of prosecution of those responsible.•Understanding the various dynamics at play when prosecuting white-collar crime.•The problem with “flat” and “umbrella” statutes and how this relates to the Federal Criminal Code.•A look back at the college admissions scandal, also known as the Varsity Blues case.•The argument for the federal code being carved into graded offenses.•Details about the fraud triangle and what breeds this type of illicit behavior.•Bringing about institutional change by putting resources toward front-end regulation.•What Miriam means by flat laws and why it’s important to avoid these.•The difference between flat laws and graded laws, and the benefits of graded laws.•A historical perspective on why the Federal Criminal Code is not graded.•The core problem of the sentencing guidelines in white-collar crimes.•Tracking white-collar crime; what this entails and the importance of doing so accurately.•A breakdown of suggested reforms and Miriam’s four recommended prescriptions.•Unpacking the idea of intentionality in white-collar crimes.•Whose job it is to ensure an overhaul of the systems under discussion. Links Mentioned in Today’s Episode:Miriam Baer on LinkedInMiriam Baer Brooklyn Law SchoolMyths and Misunderstandings in White-Collar CrimeEdwin SutherlandWilliam StuntzAmerican Law InstituteFordham University School of Law Corporate Law Center

Joining us today is William Moon, a Professor of Business Law at the University of Maryland School of Law, to discuss his essay ‘Beyond Profit Motives’ which he wrote in response to Stephen Bainbridge’s book The Profit Motive. Will reviews Bainbridge’s work, offering an alternative theory of corporate purpose beyond what Will refers to as “ruthless profit maximization for shareholders.” With expertise in business law, corporate governance, offshore finance, and private international law, Will brings a wealth of knowledge to our discussion. Tuning in you’ll learn about Will’s new concession theory, how it differs from the ideas laid out by Bainbridge, and the relationship between the ESG movement and profit maximization. Our conversation covers key areas, including the mechanics of stakeholder capitalism, why ESG goals can be accomplished through enhanced legal compliance and obedience, and how to better align the interests of corporations with societal interests. Listeners should check out our interview of Bainbridge back in May 2023 to help them understand Will’s critiques. To hear all of Will’s insights on his new concession theory and The Profit Motive be sure to tune in today! Key Points From This Episode:•Professor William Moon’s review of Stephen Bainbridge’s book, The Profit Motive.•What inspired him to write ‘Beyond Profit Motives’ in response to The Profit Motive.•An overview of Milton Friedman’s article from 1970 entitled ‘A Friedman Doctrine ‐- The Social Responsibility of Business Is to Increase Its Profits’.•Examining whether there is a true conflict between long-term shareholder profit maximization and achieving environmental, social, and governance (ESG) goals.•Will’s argument against Professor Bainbridge’s conviction that stakeholder capitalism is fundamentally anti-democratic.•An outline of stakeholder capitalism and the different versions of it.•Will’s new concession theory as laid out in his article.•How the new concession theory can support ESG goals.•Why ESG goals can be accomplished through enhanced legal compliance and obedience.•Corporations’ ability to evade laws and the state’s ability to enact laws in response.•Blockchain-based business entities; what types of laws and regulations they are asking for.•Why the new concession theory mostly applies to large business enterprises.•Takeaways from the McDonald’s Caremark case and verdict.•Unpacking the ESG movement’s biggest accomplishments and areas for improvement.•A rundown of the topics to be explored in conversation with the new concession theory. Links Mentioned in Today’s Episode:William Moon‘Beyond Profit Motives’A Friedman doctrine‐- The Social Responsibility of Business Is to Increase Its ProfitsProfessor Elizabeth PollmanElizabeth WarrenBusiness RoundtableStephen BainbridgeStephen Bainbridge on LinkedInThe Profit MotiveFordham University School of Law Corporate Law Center

Bradford Newman, partner at Baker McKenzie and Chair of the firm’s North America Trade Secrets Practice, discusses the potential of AI in transforming our world, the importance of understanding AI usage, the impact of AI on the legal profession and law school curricula, and the urgency of data and privacy protection.

The recent Supreme Court decision on 303 Creative LLC v. Elenis left the nation debating whether the First Amendment grants business owners the constitutional right to turn away certain protected classes of individuals. It also raised other issues about corporate identity and personhood and made us ask: how did we get to the point where courts are treating corporate actors as indistinguishable from natural persons with individual rights? Here to help us unpack these issues is Adam Winkler, the Connell Professor of Law at the UCLA School of Law and a specialist in American constitutional law, the Supreme Court, and gun policy. He has published numerous books and articles, but for today’s discussion, we refer to his award-winning book, We the Corporations: How American Businesses Won Their Civil Rights. Tuning in, you'll learn about the corporate rights movement and the landmark cases that laid the foundation for corporate personhood in America. We also discuss which rights corporations should (and should not) have, the influence corporations have on the electoral process, and how AI might shape our understanding of corporate personhood going forward, plus so much more! Key Points From This Episode:•   Insight into the “corporate rights movement” and the purpose of corporate personhood.•   When companies became people: the history of corporate personhood in America.•   The 200-year quiet revolution led by business corporations to gain constitutional rights.•   Why the Supreme Court has historically sided with businesses.•   The foundations laid for corporate law by Bank of the United States v. Deveaux.•   Citizens United: a landmark decision regarding the political speech rights of corporations.•   Who really speaks when a corporation speaks.•   The influence corporations exert on the electoral process, even without the right to vote.•   Hobby Lobby and freedom of religion.•   Why granting corporations rights based on shareholder’s rights and interests is “slippery.”•   The 303 Creative decision and its intersection between the First Amendment and anti-discrimination laws.•   The problem with distinguishing between closely held corporations and public corporations.•   Property versus liberty: which rights corporations should and should not have.•   How AI might change the way we think about corporate personhood.  Links Mentioned in Today’s Episode:Adam WinklerAdam Winkler on LinkedInAdam Winkler on XWe the CorporationsFordham University School of Law Corporate Law Center