Bite-Sized Business Law

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

Boeing is setting a standout example of how Fortune 500 companies can implement and maintain ESG practices in their daily operations. In today's episode, we sit down with Boeing South Carolina's Senior Director of Government Operations, Lindsay Leonard, to talk about her work since taking up this position, her perspective on the aerospace industry's most pressing issues, and the ecosystem that Boeing has created since setting up in South Carolina. Lindsay talks about shifting attitudes towards ESG, the implications of the commitments that have been made by the aerospace industry, and how she and her team want to take things beyond the minimum and performative. In an industrial space that has required some of the most obvious change, Boeing has a real strategy and practical plan that goes beyond compliance; Lindsay talks about their approaches to value creation and innovation and creating a better understanding of sustainability in relation to ESG. So to hear all this, and a whole lot more from our great guest, press play! Key Points From This Episode:Lindsay explains the project at Boeing South Carolina.Unpacking Boeing South Carolina's corporate conservation strategy. The need for constant focus on ESG in all decisions in a field such as aerospace. Real steps and initiatives towards promotion of ESG within the aerospace industry. Sustainable value for shareholders; programs at Boeing that exemplify what is possible. Lindsay's thoughts on the year ahead, the recession, and the effects this will have on corporate ESG initiatives. Advice from Lindsay for sticking by ESG commitments through economic constraints.  The importance of reporting requirements, and the different forms this can take. Lindsay shares some thoughts on maintaining a focus on the elements of ESG that actually matter. Links Mentioned in Today’s Episode:Fordham University School of Law Corporate Law CenterLindsay Leonard on LinkedInBoeing The Nature ConservancyDreamlearnersWiskWe Edit Podcasts

Should nonlawyers be allowed to own law firms to increase capital and access to the legal system, or are there ethical concerns associated with nonlawyer involvement and their lack of fiduciary duties? On this special live episode of the Bite Sized Business Law Podcast, we are joined by seasoned litigator and former New York State Bar Association President, Stephen Younger and the founder and managing director of Bench Walk Advisors, Adrian Chopin to discuss this controversial issue. Tuning in, you’ll hear all about what nonlawyer ownership of law firms means, why it has become a massive debate in the USA, how the UK has implemented it, and the main concerns of this type of model. Stephen argues that nonlawyer-owned firms are not bound by the same ethical duties, will ignore pro bono obligations to make money, and do not contribute to the legal system positively, while Adrian believes that this model does not create any more capital issues than traditional firms, supports incredible innovation, and can solve many problems in the system. We delve into the importance of modernizing the legal system before our guests share how they think this model will evolve in the near future. Finally, we open up to the floor for some interesting and informative questions from our live audience. Be sure to join us for this nail-biting debate and hear two sides of a controversial argument in legal practice today!Key Points From This Episode:A brief overview of the Corporate Law Center at Fordham University. What Associate Dean Joe Landau loves about the Bite Sized Business Law Podcast. An introduction to today’s guests, Stephen Younger and Adrian Chopin. The basic principle behind nonlawyer ownership of law firms and why it’s such a debate. Adrian shares what is happening in the UK with alternative business structured law firms. Why Stephen likes litigation finance and how it differs from this new scenario. The differences (or lack thereof) between capital from lawyers and capital from third parties.The main concern with regards to nonlawyer ownership of law firms. Why nonlawyer law firm owners may not be bound by the same ethical duties as lawyers. How well-known brand names absorbing law firms may affect the practice of law. The importance of modernizing legal practice. How this model affects pro bono services and why. How our guests think this model will play out in the next few years. Why Stephen wants to see a model that will solve access to justice in America. Why Adrian thinks this model can solve many other problems. The consequences to the investor when it comes to unethical practice. How the role of lawyers is approached differently in the US as opposed to other countries. How outside shareholders may approach highly controversial cases. Links Mentioned in Today’s Episode:Fordham University School of Law Corporate Law CenterStephen Younger on LinkedInAdrian Chopin on LinkedInAdrian Chopin on TwitterJoseph Landau on LinkedInMatthew Diller on LinkedInRichard Squire on LinkedInAmelia Martella 

Climate disclosures are probably the most prominent ESG issues these days, and today’s episode is all about the SEC’s expansion into ESG disclosures and why this decision isn’t valid under the constitution, nor is it wise. Joining us to share his thoughts on the topic is Professor Sean Griffith, an expert in corporate and securities law who teaches at Fordham Law School and is the author of the paper entitled ‘What's controversial about ESG?’ Historically, the SEC has asked corporations to describe their assets, their management, and their corporate governance, but by getting into climate disclosure they are broaching a whole new territory, and by doing so they are opening themselves up to challenges to their authority. To read the full paper visit the link https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4118755This conversation is guaranteed to give you a lot to think about! Key Points From This Episode:The focus of Sean’s most recent piece, ‘What’s Controversial About ESG?’Sean shares what motivated him to write this piece.An overview of the SEC’s current climate proposals. The definition of materiality. Pre-existing rules that require companies to make climate-related disclosures.Where the SEC derives its authority to mandate disclosures. What most SEC regulations require of corporations. The role of the SEC.The two opposing camps of belief on the constitutionality of the SEC’s decisions. Exploring the Commercial Speech Doctrine. The key to winning a constitutional law case. Sean explains what makes the SEC’s ESG proposal so controversial.What all investors want. Ways by which institutional asset managers can rate investments for ESG investors. Three first amendment arguments around SEC regulations relating to climate disclosures. Why Sean thinks it is highly likely that the SEC’s rules in the ESG area won’t survive. What the SEC should and shouldn’t be doing. Links Mentioned in Today’s Episode:Sean Griffith on LinkedIn‘What’s Controversial About ESG?’Climate RationalityFordham University School of Law Corporate Law Center

During this special episode, Richard Squire joins us to discuss the collapse of Silicon Valley Bank. Richard is a Professor of law at Fordham University School of Law, where he teaches corporate, business, and bankruptcy law, and he is here today to provide an overview of what has happened at Silicon Valley Bank, and analyze the elements that have led to this point. Join us to hear his perspective on the Federal Reserve’s failures, the role of moral hazard, and how middle class tax is redistributed to the wealthy. We discuss fractional reserve banking, Dodd-Frank, and interest rates, before we theorize about what the world would look like without inflation from money printing. Hear why Richard doesn’t advocate for lifting the insurance cap on deposits, which program is working in tandem with deposits, and why deflation is undesirable for the Federal Reserve with money multiplication and division in mind. Join us today to hear all this and more from today’s highly knowledgeable guest. Thanks for tuning in!Key Points From This Episode:An introduction to today’s guest, Professor Richard Squire.Richard’s rundown on the bank run at Silicon Valley Bank.What Richard means by bad practices: a failure of risk management.The two main problems that caused the bank to fall into bankruptcy. How the social media component fueled the panic around this crisis.The Federal Reserve’s failure to monitor interest rates at Silicon Valley Bank.Moral hazard at various scales.The redistribution of middle class tax to the wealthy in Silicon Valley.The cost of money printing.Fractional reserve banking.How different our approach to banking would be without inflation from money printing.Where Dodd-Frank fell short in addressing risk.Why Richard doesn’t advocate for lifting the insurance cap on deposits.The program that is working in tandem with deposits.Why deflation is in conflict with what the Federal Reserve wants.Money multiplication and money division.The impact of having no risk officer at SVB.A note that the insurance limit has not been limited for other banks.Why there is global interest in the Federal Reserve’s interest rates.Links Mentioned in Today’s Episode:Richard Squire on LinkedInSilicon Valley BankDodd-Frank Wall Street Reform and Consumer Protection ActFordham University School of Law Corporate Law Center

Financial litigation is a new sector causing disruption and creating new opportunities for law and finance, but what is financial litigation? What type of assets are involved? How can organizations take advantage of new opportunities? To help unpack this complicated topic is  Matt Cantor, Senior Managing Director at Pretium, a specialized investment firm with more than  $50 billion in assets under management. Matt is known for his handling of the Lehman Brothers bankruptcy and liquidation case. He has a wealth of experience in corporate restructuring at big law firms and has worked at various respected investment firms. In our conversation, we unpack the definition of litigation finance, how it relates to the justice system, and where finance litigation originated. We discuss how the shift in the economy has created new legal opportunities, his approach to selecting the best organizations to work with, how to monetize digital assets, how Matt remains objective during finance litigation processes, the ethical considerations, balancing risk and returns, and the value of intangible corporate assets. Hear about his experience working with Lehman Brothers, a practical example of litigation finance,  and Matt’s opinion on regulating the sector. Tune in and learn about the new world of litigation finance and the associated opportunities with Matt Cantor! Key Points From This Episode: Background about Matt and his vast experience in business law. Learn about Pretium and how he first got involved in litigation finance. What litigation finance is and how it helps with accessibility to the justice system. Hear how law firms are leveraging the shift in the economy and corporate assets. How organizations acquire funding for litigation and how many are awarded funding. His approach to selecting clients to work with and acquiring funding. Matt shares how he avoids ethical pitfalls and other challenges. Find out whether the historical return is higher with digital asset classes. Whether litigation finance is correlated or affected by capital markets. He explains how more than one litigation firm can work together on a case. We discuss whether regulation of the sector is inevitable. Ways in which financial litigation works in the context of bankruptcy.  Links Mentioned in Today’s Episode:Matt Cantor on LinkedInPretiumFordham University School of Law Corporate Law Center