Bite-Sized Business Law

At the 38th American Bar Association National Institute on White Collar Crime, Deputy Attorney General Lisa Monaco remarked that the DOJ will “zealously pursue corporate crime” and “hold wrongdoers accountable, no matter how prominent or powerful they are.” With this, the DOJ ushered in policy changes in prosecuting corporate crime, and today Christopher Conniff joins us to explain these changes. Chris is an experienced trial lawyer and partner at Ropes & Gray where he co-leads the Securities and Futures Enforcement Group. His practice focuses on white-collar criminal defense and securities regulation and he helps his clients navigate investigations in a wide array of areas, from public corruption to criminal antitrust and everything in between. Join us as we unpack some of the new policies to prosecute corporate crime, why the DOJ has put compliance (not punishment) at the heart of these policies, and how companies of all shapes and sizes should respond to them. Does the old adage “an ounce of prevention is worth a pound of cure” ring true? Tune in today to find out!Key Points From This Episode:Some quintessential examples of corporate white-collar crime.A look at Chris’ professional background and his work at the US Attorneys' Office.Insight into the traditional regime for prosecuting corporate crime.Chris’s take on the DOJ’s pilot program regarding compensation incentives and clawbacks.The challenge with “box checking” and artificial incentives. Why corporate responsibility is the focus of the DOJ, not punishment.Subpoena compliance versus cooperation with it comes to good corporate citizenship.How these policy changes confront a historical lack of trust in the government.Practical implications of the new DOJ criminal self-disclosure policies.Why facts and transparency are critical when the cost of an investigation is a challenge.What corporations need to be aware of regarding the use of personal devices.How corporations should react to this new set of incentives.Why Chris is optimistic about the efficacy of this program.Links Mentioned in Today’s Episode:Christopher ConniffChristopher Conniff on LinkedInRopes & Gray LLPFordham University School of Law Corporate Law Center

Today we are joined by internationally renowned equity crowdfunding expert Andrew Schwartz to discuss alternative routes of raising capital outside the typical venture capital model. Andrew is a Professor of Law at the University of Colorado Law School and a prolific writer, with his latest offering his new book, Investment Crowdfunding. In this episode, he gives us a thorough breakdown of what investment crowdfunding is and how it’s changing the investment landscape. He talks us through how one might go about setting up an investment crowdfunding campaign and what the benefits (and potential pitfalls) are of doing so. Andrew shares the three main goals of crowdfunding and explains the difference between standard and liberal crowdfunding models. Tune in to find out why investment crowdfunding is such a significant development for entrepreneurs and investors alike, and how it’s breaking down the barriers of the traditional investment model. Key Points From This Episode:•Today’s topic: Investment crowdfunding AKA equity crowdfunding.•The potential of the investment crowdfunding model to democratize investing as we know it.•An introduction to equity crowdfunding expert, Andrew Schwartz.•Andrew explains investment crowdfunding and how it differs from the typical investment model.•The key rules and legal restrictions of investment crowdfunding.•How to set up an investment campaign on a crowdfunding platform.•The difference between current investment crowdfunding and the Kickstarter model.•Indiegogo’s unique model.•The synergistic situation of raising funds via investment crowdfunding alongside VC capital.•The stigma attached to equity crowdfunding in the early days.•Examples of companies doing parallel fundraising with crowdfunding and VC capital.•The benefits of the equity crowdfunding model.•Syndication as a mechanism for governing the crowdfunding market.•The difference between initial coin offerings and NFTs and investment crowdfunding.•Andrew explains standard models and liberal models and how they differ.•The three main goals of investment crowdfunding.•How crowdfunding benefits groups who have traditionally faced barriers to starting businesses.•How investment crowdfunding breaks down geographic limitations and biases.•The potential pitfalls of the investment crowdfunding model.•Andrew’s predictions for the future of the investment crowdfunding market in the context of recent bank turmoil and crypto bankruptcies.•The snowball effect of investment crowdfunding.•What drew Andrew to the equity crowdfunding space. Links Mentioned in Today’s Episode:Andrew Schwartz on LinkedInInvestment CrowdfundingWefunderStartEngineRepublicKickstarterIndiegogoSnowball EffectFordham University School of Law Corporate Law Center

Now that a deal in principle has been reached to suspend the debt limit before the United States runs out of money to pay its bills, the question is, how do we keep getting to this point? Negotiating the debt ceiling has become a given in American fiscal policy, but its origins remain mystifyingly complex. Today, Professors Richard Squire and Thomas Lee join us to help untangle the financial and legal issues around raising the debt ceiling. Richard is a business law scholar and a professor here at Fordham Law, where he’s also the Faculty Director of the Fordham Law Center. Tom is the Leitner Family Professor of International Law at Fordham Law as well as a constitutional and international law expert, counsel at Hughes Hubbard & Reed, and former Pentagon counsel and US naval cryptology officer. Join us for today’s episode as these esteemed members of the Fordham Law faculty share both contemporary and historical perspectives on the debt ceiling (including notable phrases from the 14th Amendment), unpack some of the consequences of a US Treasury default, discuss what it would mean to mint a coin worth a trillion dollars, plus a whole lot more. For a fascinating (and highly entertaining) take on US fiscal policy, be sure to tune in! Key Points From This Episode:•   Defining what the debt ceiling is and what it means for the US.•   Insight into the origin, history, and evolution of the debt ceiling.•   The debt ceiling and the 14th Amendment: terms from Section 4 that are worth noting.•   Instances when the US has defaulted on its debts.•   How a debt default could shock the financial markets and cause global financial chaos.•   Why it's no coincidence that the debt ceiling limits originated in 1939.•   Correlations between government spending and war (and the financial strain it creates).•   An example of the systemic consequences that a US Treasury default would have.•   Basket collateral: what one could theoretically use in place of US Treasury Bonds.•   Minting a trillion-dollar coin and other alternatives to striking a debt limit deal.•   Examining the terminology of the 14th Amendment, particularly the word “validity.”•   Attempting to answer the looming question: why have a debt limit in the first place?•   Speculation about what would happen if we eliminated the debt ceiling.•   Pros and cons of setting the debt limit as a percentage of GDP instead of an absolute amount.  Links Mentioned in Today’s Episode:Thomas LeeThomas Lee on LinkedInRichard SquireRichard Squire on LinkedInFordham University School of Law Corporate Law Center

The Texas divisive merger, more commonly known as the Texas Two-Step, is a legal tool employed by businesses involved in substantial litigation to settle their tort liabilities through the bankruptcy process. Listeners may recognize this maneuver from recent headlines and the questions posed as to whether it is leading to abuse of the bankruptcy system. Rejoining us today to unpack all of this and more is returning guest Matt Cantor, senior managing director at Pretium, a specialized investment firm that currently has more than $50 billion in assets under management. Matt also has extensive experience in corporate restructuring at large law firms, has worked at various respected investment firms, and is known for his handling of the Lehman Brothers’ bankruptcy and liquidation case. In today’s conversation, we delve into the concept of divisive mergers, their relationship to bankruptcy, and how mass torts present an opportunity for investors who are willing to take on litigation risk. Matt gets into the variability that can occur in mass tort liabilities and what can be done to reduce uncertainty. We also discuss how the move from an industrial to a digital economy presents new opportunities for investors and some of the risks inherent to technology-based business models. To learn more about liability management, the Texas Two-Step, and much more, be sure to tune in today! Key Points From This Episode:•An overview of the Texas Two-Step; its origins, what it entails, and why it’s not as new as people think it is.•Engaging in a liability management program and how it relates to bankruptcy.•The high range of variability of outcomes within the American tort system.•Different types of mass tort liabilities and how they demonstrate wide variability.•What companies do to reduce variability: predicting outcomes, giving their case to a bankruptcy judge who will assign some certainty to it.•The complexity of the risk-sharing arrangements between debtors and their representation.•An overview of the opportunities in this space for investors with an appetite to take on litigation risk.•Why this area of work is well-suited to anyone earning a JD–MBA.•Some of the opportunities inherent in the move from an industrial economy to a digital economy.•The embedded liability within some technology-based business models.•Why settling a lawsuit provides benefits to both sides by reducing variability and uncertainty.•Matt’s thoughts on whether lawyers are abusing the bankruptcy system. Links Mentioned in Today’s Episode:Matt Cantor on LinkedInPretiumRichard SquireRichard Squire on Google ScholarRichard Squire on LinkedInBite-Sized Business Law Podcast: Matt Cantor on Litigation FinanceFordham University School of Law Corporate Law Center

During this episode, we go directly into the belly of the beast to hear from a tech company that survived the collapse of Silicon Valley Bank. Brian Schmidt, co-founder of Hoop, joins us to share his story. Tune in to hear a candid account of how one start-up successfully navigated the high-risk experience of transferring its assets out of SVB during the weekend of its collapse. Hear what considerations led to the final decision, and what the experience was like on the ground. Brian shares anecdotes from how he engaged with the media and his co-founders, and what he would have done differently in hindsight. Hear how Twitter helped to speed up the collapse, why our energy is best used focusing on the elements that fall within our control, and much more today. Thanks for listening! Key Points From This Episode:•An introduction to today’s guest, Brian Schmidt.•Background on Hoop, the technology startup Brian co-founded.•Brian’s experience with SVB leading up to March 9.•Bank failings following SVB.•The blog post written by Hoop co-founder Stella Garber.•When Brian started to get wind of the SVB collapse.•The spread of information and conversation around the collapse.•What motivated Brian to publicize a new Slack network for business leaders to share information.•The decision-making process in response to moving the money.•Failure of the text message authentication system during the transfer process.•The importance of delineation of roles during decision-making.•Potential scenarios Brian considered leading up to the result.•Twitter’s Clubhouse-style conference calls.•Legal considerations leading up to the verdict.•How Brian’s family responded to the crisis.•The moment of confirmation that everything was going to be okay.•What inspired Hoop to create a blog post about the weekend.•Considerations going forwards.•Brian’s belief that there is merit to every viewpoint, including bailouts.•How social media exacerbated the risks of SVB’s collapse.•Why the government ultimately had to take action.•Focusing on what’s inside of your control. Links Mentioned in Today’s Episode:Brian Schmidt on LinkedInHoopAre US Bank Deposits Safe?Surviving SVBClubhouseStella Garber on LinkedInAnnie DukeFordham University School of Law Corporate Law Center

What responsibility do corporations have to society (if any)? How should they balance environmental, social, and governance factors? Here at Bite-Sized Business Law, we’ve already covered corporate social responsibility and environmental social governance (ESG) from a few different perspectives. Today, we unpack a straightforward defense of shareholder primacy, or in other words, the idea that pursuing any corporate aim that does not maximize shareholder value conflicts with the legal and practical purposes of a corporation. Here to unabashedly defend this concept is one of the foremost American experts in corporate governance and the William D. Warren Distinguished Professor of Law at UCLA School of Law, Stephen Bainbridge. Stephen is a business law professor and one of the most cited scholars in corporate governance law. His new book, The Profit Motive, argues that shareholder wealth maximization is not only “required by law, but what the law ought to require.” In this episode, Stephen addresses questions surrounding corporate purpose using historical, legal, economic, and social perspectives and explains why he believes that shareholder primacy is inevitable. To find out how we can reconcile ESG initiatives with shareholder value creation, tune in today!Key Points From This Episode:The role of the Business Roundtable in prompting Stephen to write The Profit Motive.Lessons about shareholder primacy from the Dodge v. Ford case of 1919.Whether or not the Milton Friedman Doctrine is still relevant in the 21st century.The problem with asking corporations to help governments solve social issues.Insight into the extent of greenwashing and the challenges of juggling competing pressures.How the story of Etsy illustrates the threat of hedge fund activism.Public benefit corporations and whether they alleviate the ESG/shareholder primacy tension.Why shareholders can’t change the fundamental nature of the businesses they invest in.The realities of “shareholder voice”.Ways that organizations are struggling to navigate the political polarization of ESG.Stephen’s win-win scenario: give directors wide discretion that they use toward the long-term benefit of shareholders.Why Leo E. Strine, Jr. is the perfect example of who The Profit Motive was written for.How to reconcile broader social interests with corporate interests: be more like Bill Gates!Ways that Stephen subscribes to the “think globally, act locally” philosophy.Links Mentioned in Today’s Episode:Stephen BainbridgeThe Profit MotiveStephen Bainbridge BlogStephen Bainbridge on TwitterStephen Bainbridge on LinkedInBusiness RoundtableFordham University School of Law Corporate Law Center

First Republic has become the latest victim of the banking crisis. In this episode, Richard Squire, Professor of Law, business law scholar, and the Fordham Corporate Law Center director, explains why. Richard provides insights into what led to First Republic's collapse and how it differs from what happened with Silicon Valley Bank. He also discusses the true nature of the riskiness of interest-only mortgages, how interest rate hikes play into this, and the irony of creating greater risk when big banks like JP Morgan purchase insolvent banks like First Republic. Richard also provides insight into the relationship between the Federal Reserve and the banking sector, what discount window borrowing is, and how this relates to the fact that there was a temporary period when it looked like First Republic was going to make it. Don't miss this thought-provoking episode that explores the hidden complexities of the banking industry, how First Republic has been bailed out, and why this bailout has been so well-camouflaged.Key Points From This Episode:What led to First Republic’s insolvency.How this differs from the problems faced by SVB.The true nature of the riskiness of interest-only mortgages.How other big banks tried to rescue First Republic, eventually culminating in the JP Morgan deal. Why the government sets aside concerns about bank mergers. The irony of creating a greater risk when a big bank like JP Morgan purchases an insolvent bank like First Republic.What fractional reserve banking is and why it’s so risky. Insight into the relationship between the Fed and the banking sector when the Fed brokers this deal.Why there was a temporary period when it seemed as though First Republic would survive. Discount window borrowing: What it is and the intention behind it.Looking back at SVB in light of what’s happened to First Republic and whether or not a lack of diversification caused this.Why this run of failed banks is unlikely to be over and who might be next.Thoughts on the Federal Reserve report on their own shortcomings.Whether or not this is a bailout and who will be affected.Why this bailout has been so well-camouflaged. Links Mentioned in Today’s Episode:Richard Squire Richard Squire on Google ScholarRichard Squire on LinkedInFirst Republic Silicon Valley Bank  J.P. MorganWall Street: Money Never Sleeps “Federal Reserve Board announces the results from the review of the supervision and regulation of Silicon Valley Bank, led by Vice Chair for Supervision Barr”Fordham University School of Law Corporate Law Center

Elon Musk's Twitter takeover isn’t new news, yet it seems to perpetually be in the news. In this episode, we are joined by former litigator and Professor of Law at the University of Houston Law School, Robert Ragazzo to talk about the legal aspects of Elon Musk’s Twitter acquisition. Bob is somewhat of an expert on how it’s all unfolding and today, we hear his insights on the evolution of Twitter, why Elon Musk decided to buy it, and how the acquisition played out. We discuss the SEC’s role (or lack thereof) and the shareholders’ attempt to take matters into their own hands. Bob explains Musk’s airtight merger agreement and the consequences thereof and shares his opinion on how Musk has been running Twitter since the takeover. Tune in to hear the ins and outs of the legal proceedings following Musk’s merger, as well as our speculations on the future of Twitter.Key Points From This Episode:Introducing Robert Ragazzo, a former litigator and current Professor of Law at the University of Houston Law School.Today’s topic: Elon Musk’s acquisition of Twitter and his subsequent business practices.How Twitter has evolved over the past decade.Why Elon Musk bought Twitter and how the acquisition played out.How Musk violated the SEC filing rules and why the SEC didn’t act on his violation.Insight into Twitter shareholders’ attempt to sue Musk.Obstacles to private rights of action within the Securities Exchange Act.Twitter’s inability to identify and calculate spam accounts.Elon Musk’s merger agreement and the consequence thereof in front of the Delaware Court of Chancery.An example of another ‘material adverse impact’ case and how it compares to Musk’s case.Robert’s thoughts on how Musk has been running Twitter.The questionable way in which Musk laid off Twitter employees.The multitude of people Musk has offended thus far.Why it’s a problem that Musk didn’t buy Twitter as a business investment.Speculation on the future of Twitter.Links Mentioned in Today’s Episode:Robert RagazzoFordham University School of Law Corporate Law Center“Extremely Hardcore” from New York Magazine

On this episode, business and regulatory expert Donna Redel joins us to discuss the messy and debated business of regulating crypto. Donna is the former Managing Director of the World Economic Forum and the first woman to chair the United States Commodity Exchange. She co-founded the Fordham Law Blockchain Regulatory Symposium and teaches cryptocurrency and blockchain as an adjunct professor at Fordham Law. During today’s discussion, Donna shares the story of her initial introduction to the world of cryptocurrency and her thoughts on the relationship between big banks and digital assets. We unpack the SEC’s issue of a Wells notice to Coinbase and its implications, along with coin classification by the SEC. Donna shares her perspective on the fraudulent FTX scam and provides some advice on essential things to consider when you custody assets. We compare US regulations with those of the EU, touch on offshore trading, and talk about gender inclusivity in the digital assets realm. Tune in today to hear all this and more! Key Points From This Episode:Today’s topic: regulating cryptocurrency.What first sparked her interest in cryptocurrency. The relationship between big banks and cryptocurrency. Why it is necessary to create clarity around jurisdiction regulations.Reasons behind the SEC’s issue of a Wells notice to Coinbase. Which coins are commodities according to the SEC.Why Donna is in support of a crypto-specific regulatory regime. Progress in regulation since the infrastructure bill.Donna’s thoughts on the FTX scam. Essential things to do when you custody assets.How crypto can provide protection and facilitate remittances. The impact of introducing real-time settlement. Dollar supremacy and digital assets.The European Union’s comprehensive regulatory structure.Navigating fears around offshore trading.The gender disparity in the field of cryptocurrency.Why Donna believes that there is always room for more women. Links Mentioned in Today’s Episode:Donna RedelDonna Redel on TwitterCoinbaseNew York AngelsSECWorld Economic ForumFordham University School of Law Corporate Law Center

Corban Rhodes represented consumers in the most significant data breach case: the Yahoo Data Breach. He also successfully extracted a settlement from Facebook for misusing biometric data. Today, he continues to represent consumers in cyber security and data privacy matters as a partner at DiCello Levitt. Corban joins us today to discuss the broad topic of surveillance capitalism. He starts our conversation by breaking down the three categories of personal information that companies can use to generate a profit. Next, he offers a glimpse into his process, revealing the educational piece that he uses to empower clients to understand and approach data protection. Listeners will learn what the United States' sectoral approach to data privacy means and what its implications are for everyday users. We touch on the implications of public trust which is at an all-time low, how contract law can serve as a gap-filler, and what Elon Musk’s moratorium on A.I. signifies for the state of technological progress and safety. Tune in today to hear all this and more from an inspiring expert in the field!Key Points From This Episode:An introduction to today’s guest, Corban Rhodes, partner at DiCello Levitt.Corban’s disclaimer that his views are his own and don’t reflect those of his law firm.Biometrics, geolocation, IP address, and preferences.How companies use data to generate a profit.The bidding process behind banner ads. The educational piece of Corban’s practice. What it means to have a sectoral approach to data privacy. State intervention to data protection legislation.An analysis of EU regulation in comparison to US progress.Public trust and its implications for technology and business.Why focusing on consent might not be enough.How contract law serves as a gap-filler.Interpreting the moratorium on A.I. as called for by Elon Musk and others.Dangerous possibilities of A.I. integration according to pre-GPT4 research.Why it is so important that we have control over our data.Difficult predictions around A.I. influence based on your data. Data privacy’s tendency not to fall in a single political camp.Links Mentioned in Today’s Episode:Corban Rhodes on LinkedInElon Musk and Others Call for Pause on A.I., Citing ‘Profound Risks to Society'DiCello LevittAmericans Can’t Consent to Companies’ Use of their Data by Joseph Turow, Yptach Lelkes, Nora A. Draper, and Ari Ezra Walman Fordham University School of Law Corporate Law Center