FTX: An Illustration of the Difficulties in Structuring Crypto-Asset Regulation and Incentives

The financial woes of cryptocurrency exchange FTX and hedge fund Alameda Research have dominated the recent financial news cycle. On November 2, 2022, CoinDesk reported that Alameda Research held a substantial amount of the FTT token issued by FTX. Both FTX and Alameda Research were founded by Sam Bankman-Fried. Following this revelation, rival cryptocurrency exchange … Continue reading FTX: An Illustration of the Difficulties in Structuring Crypto-Asset Regulation and Incentives

Restructuring Futures Markets

Before the run on FTX, its subsequent bankruptcy, and the resignation of its founder Sam Bankman-Fried, an FTX affiliate (i.e., “LedgerX” or “FTX U.S. Derivatives”) filed a proposal with the Commodity Futures Trading Commission that had the potential to fundamentally change central clearing in U.S. futures markets. The proposal is part of a growing trend … Continue reading Restructuring Futures Markets

Discriminatory Employment Transfers: The New Circuit Split

Does Title VII of the 1964 Civil Rights Act forbid employers from laterally transferring employees based on race, sex, religion, or other protected category, including when the transfer results in no “material” harm to the employee?  Section 703(a)(1) of Title VII of the Civil Rights Act of 1964 makes it “an unlawful employment practice . . . to fail … Continue reading Discriminatory Employment Transfers: The New Circuit Split

The Trouble with Tibble: Environmental, Social, and Governance (ESG) and Fiduciary Duty

Introduction The aggressive expansion of Environmental, Social, and Governance (ESG) factors in financial investments over the past decade has challenged prior concepts of corporate responsibility. A conflict has developed amongst lawmakers and advocates over the responsibility of corporate directors and fund managers relating to ESG, most notably, whether implementing ESG is a breach of fiduciary … Continue reading The Trouble with Tibble: Environmental, Social, and Governance (ESG) and Fiduciary Duty

Commodity Futures Trading Commission: The Correct Regulator for the Virtual Currency Spot Market

I.         Introduction TerraUSD, an algorithmic stablecoin, succumbed to a ‘death spiral’ when it de-pegged from its $1 (‘USD’) value.This death spiral sparked a market-wide virtual currency sell-off, wiping out $60 billion from crypto markets. The algorithmic stablecoins (‘altcoins’) demise highlights the need for a regulatory overseer of virtual currency spot markets. The two most likely regulators, the CFTC and SEC, take distinctly different approaches to the regulation of capital and commodities markets, … Continue reading Commodity Futures Trading Commission: The Correct Regulator for the Virtual Currency Spot Market

The Epistemology of Collective Scienter

There is a circuit split over the standard to plead scienter in 10b-5 securities fraud litigation against corporations. NARROW PLEADING dismisses complaints for failure to plead scienter, unless the complaint names a natural person at the corporation who has scienter. But BROAD PLEADING allows a complaint to survive dismissal, even without naming any natural person … Continue reading The Epistemology of Collective Scienter

Extraterritorial Application of the Lanham Act

United States corporations operating abroad often look to the Lanham Act, 15 U.S.C. § 1051 et seq., for protection of their intellectual property. If you take almost any Fortune 100 company or company listed on the Dow Jones Industrial Average, you will probably find that it derives a sizable portion of its revenue from international operations. … Continue reading Extraterritorial Application of the Lanham Act

Assessing the Biden Administration’s Actions on Agriculture Antitrust

In President Biden’s 2021 speech announcing his administration’s approach to antitrust enforcement, the President sounded a revolutionary note: America had been doing antitrust wrong, and it was time for change. “Forty years ago, we chose the wrong path,” President Biden intoned, “following the misguided philosophy of people like Robert Bork.” Now, 40 years into the … Continue reading Assessing the Biden Administration’s Actions on Agriculture Antitrust

Regulatory Uncertainty and Business Impact of the Executive Orders Against Investment in Chinese Companies

The main provision of the Executive Orders (EO 13959 by President Trump issued in November 2020, as replaced by EO 14032 by President Biden issued in June 2021) prohibits US persons from engaging in “the purchase or sale of any publicly traded securities, or any publicly traded securities that are derivative of such securities or are designed to provide … Continue reading Regulatory Uncertainty and Business Impact of the Executive Orders Against Investment in Chinese Companies

Does the SEC Have Authority under Howey to Regulate Cryptocurrencies?

The cryptocurrency market experienced major growth in recent years and whether the U.S. Securities and Exchange Commission (SEC) should regulate cryptocurrency has become the center of attention. Senator Warren wrote to the SEC’s chairman Gary Gensler questioning if the SEC has authority to regulate cryptocurrency exchanges. With the volume of cryptocurrency trading growing tenfold on the popular … Continue reading Does the SEC Have Authority under Howey to Regulate Cryptocurrencies?

Shareholders Get Some Slack on Section 11, Direct Listing Pleading Standard

This past September, the United States Court of Appeals for the Ninth Circuit held that shareholders who purchased securities in Slack’s direct listing have standing under Section 11[1] of the Securities Act of 1933 (Securities Act) to sue the company for misrepresentations in its registration statement, even if they cannot prove that their shares were … Continue reading Shareholders Get Some Slack on Section 11, Direct Listing Pleading Standard

The Supreme Court As A Systemic Risk

Financial regulators should begin planning now for the risk that the post-Trump era Supreme Court could eventually trigger a financial crisis. We often think of systemic risk as coming from war, plagues, or other disruptive events causing problems to cascade through the financial system. In Supreme Risk, an article forthcoming in the Florida Law Review, I explain … Continue reading The Supreme Court As A Systemic Risk

Regulating Stablecoins as Glass-Steagall Deposits and Consequences for Money Market Funds

In November 2021, the President’s Working Group on Financial Markets, in partnership with the Comptroller of the Currency and the Federal Deposit Insurance Corporation, released its long-awaited report on stablecoins attempting to outline the risks posed by these digital assets and propose next steps for financial regulators. Although its main recommendation called for new legislation … Continue reading Regulating Stablecoins as Glass-Steagall Deposits and Consequences for Money Market Funds

Musk: Feared or Loved? Delaware Chancery Court’s Controlling Shareholder Doctrine and the Expansion of Judicial Inquiry into Directorial Decision Making

In Delaware, there is no answer to whether a defendant’s “soft power alone, anchored in historical and commercial ties” can support a controlling shareholder determination imposing fiduciary duties. Elon Musk has been a prominent star in recent years, specifically as Tesla’s CEO. While Musk’s tweets have been a focal point of his media attention, his … Continue reading Musk: Feared or Loved? Delaware Chancery Court’s Controlling Shareholder Doctrine and the Expansion of Judicial Inquiry into Directorial Decision Making

The Hedge Fund Activism of Engine No. 1

On the eightieth anniversary of the attack on Pearl Harbor, December 7, 2021, Engine No. 1 stormed into the world of shareholder activism with its letter announcing to the board of directors of ExxonMobil that it was ready to engage the board in a proxy contest. Engine No. 1’s activism was considered extremely successful. “Despite having only $40 … Continue reading The Hedge Fund Activism of Engine No. 1

The President as CEO: Executive Privilege and Corporate Law

On January 6, 2021, a violent mob attacked the U.S. Capitol after being told by then-President Donald Trump that the election had been "rigged" against him and that he had actually won "by a landslide." The mob rampaged through the Capitol building, leaving several dead, injuring over a hundred people, and causing millions of dollars of … Continue reading The President as CEO: Executive Privilege and Corporate Law

DOJ Files Antitrust Suit Against American Airlines and JetBlue

On September 21, 2021, the Department of Justice (DOJ) filed a civil antitrust suit against American Airlines (“American”) and JetBlue in the United States District Court for the District of Massachusetts. The suit alleges a violation of § 1 of the Sherman Act and seeks to enjoin an alliance formed between the two airlines. Back … Continue reading DOJ Files Antitrust Suit Against American Airlines and JetBlue

The Wireless Investors Movement

The UChiBLR Editorial Board is delighted to present our inaugural article by guest academics. As Web3 promises to reestablish the role of individuality online, tech savvy investors are set to cause an unprecedented paradigm shift in corporate governance. The paradigm shift is rooted in the weltanschauung of Gen Z and millennial investors who use technology and online … Continue reading The Wireless Investors Movement

A Sea of Change in Delaware Corporate Dilution Claims

Earlier this year, the Supreme Court of Delaware decided Brookfield Asset Mgmt. v. Rosson, overturning fifteen years of precedent and simplifying an area of law the Court itself referred to as “reflect[ing] fundamental unworkability.” To understand the importance of this case, some background is necessary. According to the Delaware Court’s holding in Tooley v. Donaldson, … Continue reading A Sea of Change in Delaware Corporate Dilution Claims

Vaccines at 31,000 feet: Collective Bargaining, Labor Disputes, and Southwest Airlines’ Vaccine Mandate

Southwest Airlines (“SWA”), the low-cost carrier renowned for its forward-thinking workplace culture of levity and employee empowerment, has found itself in a bitter labor standoff over a recently-decreed edict that its employees—some 56,000 people—must be vaccinated against COVID-19 by December 8, 2021, barring any religious or medical exemptions. The requirement was imposed pursuant to President … Continue reading Vaccines at 31,000 feet: Collective Bargaining, Labor Disputes, and Southwest Airlines’ Vaccine Mandate

Delaware Supreme Court Clarifies Demand Futility Lawsuits in United Food and Commercial Workers v. Zuckerberg

The Delaware Supreme Court recently clarified its demand futility jurisprudence, an area of Delaware corporate law that has confused members of the bar, academics, and shareholders for nearly thirty years. This clarification came from the court’s recent decision in United Food and Commercial Workers v. Zuckerberg, a case concerning a stockholder’s complaint over past actions … Continue reading Delaware Supreme Court Clarifies Demand Futility Lawsuits in United Food and Commercial Workers v. Zuckerberg

A Settled Case and an Unsettled Law: The Reform Act’s Discovery-Stay at the Supreme Court

Discovery is “both a tool for uncovering facts essential to accurate adjudication, and a weapon capable of imposing large and unjustifiable costs on one's adversary.” Pivotal Software, Inc. v. Tran, to which the Supreme Court granted certiorari on July, 2, 2021, was a case about the use of discovery as a weapon by plaintiffs in … Continue reading A Settled Case and an Unsettled Law: The Reform Act’s Discovery-Stay at the Supreme Court

Why IP Waivers Are Not the Best Option for the COVID-19 Vaccine

In the midst of the COVID-19 pandemic, South Africa and India have asked the World Trade Organization (“WTO”) to waive enforcement of certain provisions of the Trade-Related Aspects of Intellectual Property Rights (“TRIPS”) agreement  “until widespread vaccination is in place globally, and the majority of the world’s population has developed immunity.” The TRIPS agreement sets … Continue reading Why IP Waivers Are Not the Best Option for the COVID-19 Vaccine