Robert P. Bartlett et al., The Myth of Morrison: Securities Fraud Litigation Against Foreign Issuers, SSRN (2018)

We find that the description of Morrison as a “steamroller” substantially ending litigation against foreign issuers is a myth. Instead, we find that Morrison did not substantially change the type of litigation brought against foreign issuers, which both before and after Morrison focused on foreign issuers with a U.S. listing and substantial U.S. trading volume. While dismissal rates rose post-Morrison we find no evidence that this is related to the decision. Settlement amounts and attorneys’ fees actually rose post-Morrison.

What Else Do Shareholders Want? Shareholder Proposals Contested by Firm Management

Eugene F. Soltes, Suraj Srinivasan & Rajesh Vijayaraghavan, What Else Do Shareholders Want? Shareholder Proposals Contested by Firm Management

Shareholder proposals provide investors an opportunity to exercise their decision rights within a firm. However, not all proposals created by shareholders receive consideration. Managers can seek permission from the Securities and Exchange Commission (SEC) to exclude specific proposals from the proxy statement. From 2003-2013, we find that managers seek to exclude 40% of all proposals they receive, but the SEC does not permit exclusion in over a quarter of the cases. Of the proposals that managers seek to exclude but the SEC does not allow, 28% win shareholder support or the firm voluntarily implements prior to a vote. Our analysis of contested shareholder proposals suggests that managers often seek to avoid the implementation of legitimate shareholder interests.

Shareholder Proposal Settlements and the Private Ordering of Public Elections

Sarah C. Haan, Shareholder Proposal Settlements and the Private Ordering of Public Elections

… As a form of private electoral regulation, the proposal settlement mechanism raises issues of democratic transparency, participation, accountability, and enforcement. This Article challenges the characterization of proposal settlements as “voluntary” corporate self-regulation, provides a framework for understanding settlement-related agency costs, and shows how settlement subverts the traditional justifications for the shareholder proposal itself. Solutions that address the democratic and corporate governance problems of settlement largely overlap, suggesting a path forward.

Buying High and Selling Low: Stock Repurchases and Persistent Asymmetric Information

We investigate the consequences of allowing for repeated capital market transactions in a model with asymmetric information between a firm and its investors. All firms in the model possess a profitable project that they need to raise cash to undertake. However, equilibria exist in which firms return cash to investors via share repurchases. Consistent with managerial accounts, some firms directly profit from repurchasing their stock. The ultimate source of these profits is that other firms buy “high” in order to improve the terms of subsequent stock issues, which is again consistent with empirical evidence. Only equilibria with repurchases satisfy a mild refinement. Repurchases lower social welfare by reducing the fraction of firms that invest, even though repurchasing itself carries no deadweight cost. Our model generates a number of empirical predictions.

via Harvard

Influencing Control: Jawboning in Risk Arbitrage

In an “activist risk arbitrage,” a shareholder attempts to change the course of an announced M&A deal through public campaigns, and profits from improved terms. Compared to conventional (passive) risk arbitrageurs, activists target deals susceptible to managerial conflicts of interest (e.g., going-private and “friendly” deals) and deals with lower announcement premiums. Their presence increases the sensitivity of deal completion to market signals. While they block a significant proportion of planned deals, activist arbitrageurs only modestly decrease the probability that the targets will eventually be acquired (including by a third party). Finally, the strategy yields significantly higher returns than passive arbitrage.

via Harvard


M&A Law Profが面白い論文として,Temple大学のLi教授とNYUのYermack教授Evasive Shareholder Meetingsを挙げていました。

OK, I’ll just say it. I think David Yermack is the most talented selector of paper topics out there. His series of tailspotter papers was great.


We study the location and timing of annual shareholder meetings. When companies move their annual meetings a great distance from headquarters, they tend to announce disappointing earnings results and experience pronounced stock market underperformance in the months after the meeting. Companies appear to schedule meetings in remote locations when the managers have private, adverse information about future performance and wish to discourage scrutiny by shareholders, activists, and the media. However, shareholders do not appear to decode this signal, since the disclosure of meeting locations leads to little immediate stock price reaction. We find that voter participation drops when meetings are held at unusual hours, even though most voting is done electronically during a period of weeks before the meeting convenes.

M&A Law Profは目の付け所が面白いと仰っています。確かに,なかなか思いつかないアプローチだと思います。実証研究が可能な程度のサンプルがあるテーマ(一万弱となっています)というのは思いの他多いのかもしれません。最近,実証研究のテーマを考えていたのですが,創造的になれば,幾らでもテーマというのはあるのだと思い知らされました。

via M&A Law Prof Blog, SSRN