Emory Corporate Governance and Accountability Review

ECGAR PerspectivesVolume 4

Incentivizing Private Scientific Companies to Go Public

Kyle Landrigan | 4 Emory Corp. Governance and Accountability Rev. Perspectives 1031 (2016)

In the wake of a private company, Moon Express, being approved for a lunar landing by the US government it begs the question, "what is to follow?" Companies in this field are in the planning phases of projects that would significantly advance society; however, the inability to raise capital through private sources slows development. Funding for projects would be easier raised through the public sector. The SEC should incentivize private companies to go public by relaxing reporting requirements. The relaxed requirements would allow the company to focus more on developing technology and less on preparing reports that will reflect that not much has changed in three months. The lessened requirements will also allow the companies to reinvest the profits into furthering development without shareholder interference. The US has been falling behind in scientific achievement, therefore pushing these companies to go public would be a step in the right direction.

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What Is Fair? A Discussion of Federal and State Regulation of Online Businesses

Brian Hawthorne | 4 Emory Corp. Governance and Accountability Rev. Perspectives 1025 (2016)

Many states are increasing pressure on Congress to regulate online businesses. Since online businesses do not have an in-state “physical presence,” they are not subjected to collecting state sales and use taxes. Many states believe that these tax-breaks allow out-of-state sellers to “take advantage of the local customer base” without adding to the states’ sales or use tax base. Additionally, many “brick and mortar” stores view the tax-breaks given to online businesses as “unfair price advantages.” There have been several Congressional responses to the states’ plea for market fairness. These include: (1) the Market Place Fairness Act; (2) The Remote Transactions Parity Act; (3) The No Regulation Without Representation Act; and (4) the Online Sales Simplification Act. However, this perspective proposes that states create notice and reporting procedures for online businesses that allow states to collect sales and use taxes from their citizens without requiring online businesses to do so.

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Is Your Company at Risk of an Activist Attack? Outsmarting Wolf Packs

Zalak Raval | 4 Emory Corp. Governance and Accountability Rev. Perspectives 1017 (2016)

Using various law journal studies, newspaper articles, Congress’s bill and a recent DOJ Settlement, Zalak Raval examines wolf-pack activism in recent years. The perspective begins by addressing how wolf packs exploit targeted industries. It explains how a wolf pack’s investment strategy has a detrimental effect on target companies. Specially because the SEC shareholder disclosure rules are uncertain pertaining to the formation of a group, i.e. for shareholders who own less than five percent stock in the company. This in turn opens up loopholes for activists to exploit. The perspective specifically discusses the loopholes used by activists pertaining to Section 13(d) of the Williams Act. It then discusses the U.S. Congress's commitment to curb uncertainty surrounding wolf pack investment strategy, specifically via the Brokaw bill. This perspective advocates for the bill to be signed into law to provide clear enforceable law for shareholders and courts. It also brings to forefront the recent ValueAct settlement, which has closed yet another loophole used by activists, specifically the 13(d)-one narrow exemption for passive investors. Finally, the perspective suggests additional factors that might be helpful in curbing the unchecked wolf packs investment strategy.

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It Takes One Bad Apple to Spoil the Bunch: An Analysis of the European Union's 2016 Apple Sales International and Apple Operations Europe Decision

Adrian Szycowski | 4 Emory Corp. Governance and Accountability Rev. Perspectives 1011 (2016)

Using European Commission press releases, law journal articles, and related news articles, Adrian Szycowski examines the aftermath of the European Union’s Competition Commission’s 2016 decision ordering Apple Sales International and Apple Operations Europe to pay Ireland 13 billion euros for unpaid taxes. The Commission’s decision is the biggest blow to date in what seems to be a struggle between the European Union and multinational companies over special tax agreements some companies have with certain Member States. After a brief background of the events leading up to the Commission’s decision, Szycowski details arguments in favor of and against the decision. This examination finds that regardless of the result of the appeals, multinational companies need not panic, because the Commission can only order the repayment of taxes for a ten-year period, no punitive damages are attached here, the decision so far does not carry any precedential power, and Ireland also plans to appeal.

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Who Really Holds the Power in Corporate Board Rooms?

Lorenia Lopez | 4 Emory Corp. Governance and Accountability Rev. Perspectives 1005 (2016)

The purpose of this research is to evaluate the need for The Corporate Governance Reform and Transparency Act of 2016 (H.R. 5311). The study explains the nature of power in corporate board rooms to reveal the role of proxy advisory firms and highlight that two firms essentially control decisions in corporate board rooms. H.R. 5311 aims to protect investors by providing increased government oversight of publically-held companies through greater SEC regulation of these influential proxy advisors. The analysis highlights that the proxy-advisory market is highly monopolized, which results in unsubstantiated and often harmful voting recommendations. In sum, the current system disregards investor’s expectations that their shareholder rights will not be weakened by conflicted third party advisors whose recommendations influence institutional investor voting patterns, and thus guide board room decisions. This work increases our understanding of the proxy advisory market, and calls attention to an overwhelming need for more effective corporate governance in this area.

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“Veiled” Threats of Liability: Exploring Whether Patent Law Actually Sets a Different Standard for “Piercing the Corporate Veil”

Zachary Fialkow | 4 Emory Corp. Governance and Accountability Rev. Perspectives 1001 (2016)

After reading some alarmist articles regarding the Federal Circuit’s recent rulings on patent infringement suits, in which the court pierced the corporate veil, Zachary Fialkow decided to review the cases and form his own opinion. The articles posit that the Federal Circuit has extended liability to corporate officers through piercing the corporate veil, despite veil-piercing traditionally applying to shareholders. Fialkow argues that these conclusions result from confusing liability for someone who is both an officer and a shareholder with liability for someone who is just an officer. Ultimately, Fialkow makes the distinction that the Federal Circuit’s erroneous belief that finding any employee personally liable for corporate activities is considered piercing the corporate veil is merely dicta. In fact, the Federal Circuit has not created a new set of rules for personal liability in patent infringement.

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