News 2011

December 24, 2011. Bloomberg Radio. In this Bloomberg radio interview, host June Grasso asks Robert Bartlett to look back at some of the major securities law cases of 2011. Bartlett discusses the Supreme Court’s interpretation of Section 10(b) of the Securities and Exchange Act in the Janus Capital case; Judge Rakoff’s rejection of the SEC’s settlement agreement with Citigroup in the SEC’s enforcement action against the bank for misleading mortgage prospectuses; and the DC Circuit’s rejection of the SEC’s proposed proxy access rule. The interview is divided into two parts: part one and part two

December 23, 2011. WSJ. “Wukan Protest: Will Rights Awareness Spread?” China expert Stanley Lubman‘s latest observations on the Wukan protests and whether the central government will address the root causes of the protests by implementing long-postponed legislation on rural land seizures and cracking down on corruption. Legislative drafters have been working for years on new land laws that would govern expropriations. Read more> 

December 22, 2011.  In the essay “On Tax Increase Limitations: Part I – A Costly Incoherence,” David Gamage and co-author Darien Shanske explore the theoretical implications of one particular type of fiscal limitation on state legislatures – namely, special rules for tax increase limitations (TILs) – and whether these are analytically sound. Read more>  

November 22, 2011, Nature Journal. “Stem-cell pioneer bows out.” Geron’s announcement last week that it would cease work on its stem-cell-therapy programmes and focus on its anti-cancer portfolio, has caused concern among investors and patients.  Ken Taymor observed that Geron’s decision may benefit the field: Geron controls extensive intellectual property relevant to human ES-cell therapy, and it may now be more willing to license this portfolio to help others pursuing such therapies.

November 21, 2011, WSJ. “Laws on Paper vs. Law in Practice.” Stanley Lubman‘s observations on the fact that China has enacted 240 laws, 706 administrative regulations, and over 8,600 local regulations since August 2011. But what do these add up to in practice?

On November 21, 2011, in an interview with NPREric Talley commented on HP’s latest board appointment:   “Many of us who teach in corporate law use HP as sort of a case study of board dysfunction.”

On November 4, 2011 Justin McCrary will present at the Northwestern University School of Law’s Sixth Annual Conference on Empirical Legal Studies (CELS 2011) on the topic “Matching and Reweighting on the Propensity Score.” Previous participants in the invited series include Josh Angrist, Dan Ho, and Guido Imbens.

On October 27, 2011 Eric Talley presented “A Model of Optimal Corporate Bailouts” at the University of Pennsylvania, Law School. In this paper Talley analyzes incentive-efficient government bailouts within a canonical model of intra-firm moral hazard. Read more>

October 25, 2011, WSJ. “A Glimpse into Chinese Law-Making” Stanley Lubman draws from examples ranging from product liability to antitrust in his blog post discussing how laws are drafted in China and what that means for the country’ progress toward an effective legal system that  defines and protects the assertion and vindication of the rights of Chinese business enterprises and individuals.

October 21, 2011, Recently, the Senate Antitrust Subcommittee held a hearing to investigate the “Power of Google.” The Berkeley Law blog asked one of the hearing’s most popular questions: “Is Google ‘Cooking’ it?”  Read more>

Robert Bartlett contributed to “Rebuilding the IPO On-Ramp: Putting Emerging Companies and the Job Market Back on the Road to Growth,” a report issued on October 20, 2011, by the IPO Task Force, an independent group of venture capitalists, emerging growth company CEOs, public investors, securities lawyers, academicians and investment bankers. The report was prepared for the U.S. Department of the Treasury. The taskforce and report grew out of the Access to Capital Conference that the Treasury Department convened in March, 2011 to gather insights from capital market participants and solicit recommendations for how to restore access to capital for emerging companies.

Berkeley Law’s curriculum will expand further this spring with a diverse mix of new courses. The new curriculum will include Mergers & Acquisitions taught by Ken Taymor and Eric Talley. For a full list and highlights, follow this link.

September 19, 2011. Is it time to take a look at deregulating the legal profession? Eric Talley provided comments on a recent Brookings Institution monograph on that subject. Read his comments and replies from various scholars at: “Deregulating Lawyers: Comments From a Knee-jerk Skeptic.”

September 16, 2011. Reuters. “As a general matter, this could be a cautionary tale about trying to litigate the bejeezus out of an unhappy situation,” commented Eric Talley on the $66.7 million jury award to bond investor Jeffrey Gundlach in his battle with his former employer, money management firm TCW.

September 13, 2011. Dwight Jaffee testified at the U.S. Senate Committee on Banking, Housing, and Urban Affairs hearing on “Housing Finance Reform: Should There Be a Government Guarantee?” about his research into replacing government sponsored enterprises’ role in the housing mortgage market with private marketplace solutions.

August 2011. Robert Bartlett and co-author Victoria Plaut published “Blind Consent? A Social Psychological Investigation of Non-Readership of Click-Through Agreements.” Consumers typically don’t read form contracts which often contain hidden traps. The result can be catastrophic, personally and systemically, as the subprime mortgage crisis demonstrated. Their article tackles this issue within a notorious domain, internet click-through agreements, and suggests ways to increase readership so consumers can avoid contract pitfalls.   

August 31, 2011. The Charleston Gazette. “Calif. Gov. Brown turns focus to job creation.” Alan Auerbach‘s observations on the jobs-creation stall. Through broad policy initiatives we “can essentially force an industry to grow,” Auerbach said. 

Securitization — the combination of a group mortgages into a package, interests in which are sold on public and private securities markets — is a cornerstone of the financing structure for the American housing market. The collapse of this residential mortgage securitization market was a fundamental contributor to our continuing economic crisis. In their paper, “The End of Mortgage Securitization? Electronic Registration as a Threat to Bankruptcy Remoteness,” John Hunt, Richard Stanton and Nancy Wallace discuss a previously overlooked threat to the stability and continued operation of the market for securitized housing mortgages. The recently created and little known “Mortgage Electronic Registration Systems, Inc.”, or MERS, has ownership of over 60 million mortgages that secure trillions of dollars in homeowner debt. Hunt, Stanton and Wallace’s paper describes how the MERS structure and operation may create unforeseen risks for investors in mortgage-backed securities and how that risk may be mitigated. 

August 12, 2011, Washington Post. In “Life in a low corporate tax world,” Alan Auerbach comments on how the corporate tax code should be reformed. “It’s true that drastically reducing the corporate tax rate would make the U.S. a more attractive place to invest — and probably turn us into a tax haven,” he says. But, he adds, how would you make up the revenue? 

August 10, 2011, WSJ. “Chinese Social Insurance: Will Foreigners Be Able to Opt Out?” Stanley Lubman, a long-time specialist on Chinese law, elaborates on China’s expanded coverage of its social insurance system to include foreigners working in the country in a move that could have significant consequences for Americans and American businesses operating in the country unless Washington steps in to negotiate on their behalf. 

August 4, 2011. The New York Times. Alan Auerbach questions deficit plan. Previous efforts by Congress to bind its own hands have almost always failed. “I’m a skeptic about these kinds of things,” said Auerbach. “You’re sort of saying, ‘I can’t control myself, so I’m putting in this external mechanism to control myself, but I’m also in control of the external mechanism.”   

July 27, 2011, East Bay Express. In “The Elephant in the Room,” David Gamage comments on what policy scholars call the “fiscal constitution” of California. “It’s well understood that California’s fiscal constitution includes numerous restraints on the legislature’s and governor’s power to engage in tax and spending decisions,” Gamage said. “Proposition 13 is the most notable example of voters using initiatives to shape California’s fiscal constitution,” he added. 

July 25, 2011, NPRNews. “Financial Reform, One Year Later,” Eric Talley comments on the progress of the Dodd-Frank legislation. One year later, the act is under legislative attack and some are questioning whether the legislation is on track to accomplish its goals. 

July 2011. Robert Bartlett presented “Making Banks Transparent” at The University of Pennsylvania Wharton School’s Conference on International Financial Regulation. 

July 19, 2011, Marketplace Tech Report, “You may soon be paying sales tax on your Amazon purchases,”David Gamage comments on a pending bill which would allow sales taxes to be collected from online stores. He says Amazon’s brick-and-mortar rivals are pushing hard to take away Amazon’s advantage and “sponsoring and trying to campaign for legislation to make sure Amazon and other online retailers will be taxed.” 

 June 27, 2011, The Washington Post. “Has the long-term fiscal challenge not gotten worse in the past two years?” Alan Auerbach examines Obama’s Long-Term Fiscal Policies. “It’s hard to think of any new policies that have made the long-run problem appreciably worse (as opposed, for example, to the adoption of Medicare Part D [prescription drugs] in 2003, which created a huge new unfunded liability),” Auerbach said.

June 24, 2011, ABCNews. “FTC launches Google antitrust inquiry,” Aaron Edlin comments on the investigation into Google and its business practices. “There are a huge number of complaints, people, many websites feel that what Google is doing is unfair,” Edlin said.

June 16, 2011, SpringerLink, “Blind Consent? A Social Psychological Investigation of Non-Readership of Click-Through Agreements,” Robert Bartlett and Victoria Plaut comment on how consumers typically don’t read contracts, unaware of hidden traps. The result can be nasty: subprime mortgage crisis, anyone? Their article tackles this issue within a notorious domain, Internet click-through agreements, suggesting ways to increase readership so consumers can avoid contract pitfalls.

June 13, San Francisco Chronicle, “Road to economic recovery can be long, rocky,” Alan Auerbachcomments on economic recovery. “We know from Reinhart and Rogoff that financial crises in general are more difficult to recover from than regular recessions,” Auerbach says.

June 9, 2011, Reuters, “Analysis: California should rely more on sales taxes,” Alan Auerbach comments on why a consumption task is less volatile than income tax. “Revenue volatility is working in California’s favor at the moment,” Auerbach says. 

On May 11, 2011, we honored the recipients of the Certificate of Specialization in Business Law, both J.D. and LL.M. programs. The Business Law Certificate recognizes those students who have successfully pursued a course of study to prepare for professional practice as legal advisors to businesses, business and finance oriented NGOs and government entities. To view the complete list of recipients and pictures from the event, please visit this link.

Michael Ross, Berkeley Law adjunct, taught an introductory international business law course at Dubrovnik International University.  The course included:  import/export, trade regulation, currency and payment issues, foreign direct and indirect investment, competition law, banking regulation, tax and dispute resolution. The students are majoring in international relations and diplomacy or international business.  

On May 11, Eric Talley addressed the California Coastal Commission on the role of corporate law and piercing the corporate veil, and its relationship to regulatory takings of property held in by incorporated entities. Talley’s portion of the Commission video starts at 1:56, follow this link. For the PDF presentation, click here.

In the current issue of the Berkeley Law Transcript, “Capital Ideas,” Ken Taymor comments on the Dodd-Frank Wall Street Reform and Consumer Protection Act, written to address some root causes of the credit crisis that led to the global economic meltdown in 2008. 

April 25, 2011, San Francisco Chronicle,  “The Winklevi typify culture of whiners” –  Eric Talley comments on the recent growth of litigation cases typified by the Facebook-Winklevoss twins appeal. Despite releasing their claims that Zuckerberg stole their idea for Facebook, the twins are now appealing for a larger stake of the social media site.

April 19, 2011, “China Realtime Report,” Wall Street Journal – Stanley Lubman’s, “Film Dispute Shines a Light on China’s Foot-Dragging,” comments on China’s eagerness to join the WTO, yet unwillingness to abide by the trade body’s decisions. 

April 12, 2011, The Los Angeles Times, “Court upholds Winklevoss twins’ Facebook deal from 2008” – The Winklevoss twins continue to press forward with their long running dispute against Mark Zuckerberg over Facebook. Robert Bartlett offers his opinion on the appeal by noting, “If it is the case that the idea for Facebook was truly stolen from them, then they had a claim to pursue. But they chose to settle that claim.”

April 12, 2011, The Lumberjack – Ken Taymor spoke to Humboldt State University students and faculty about the issues surrounding human embryonic stem cell research. “This [research] is all done in the context of market-driven development of biological therapeutics. That’s a currently accepted paradigm—perhaps one that needs to be reexamined,” he said. 

March 28 (Bloomberg) — Robert Bartlett talks about the Security and Exchange Commission’s scrutiny of so-called secondary markets. The SEC has begun requesting data from the markets where buying and selling of private shares have surged in recent years. Bartlett talks with Cory Johnson on Bloomberg Television’s “Bloomberg West.” 

March 16, 2011, “China Realtime Report,” Wall Street Journal – Stanley Lubman’s, Jungle of Problems: Beijing’s Failure to Protect Consumers, discusses China’s food and product safety crisis as a problem that requires less political and publicity campaigns and more consumer protection laws and the means to enforce them.

Spring Symposium, March 11, 2011 Financial Regulatory Reform: Dodd-Frank and Beyond Berkeley Business Law Journal (BBLJ) and the Berkeley Center for Law and Business (BCLB) hosted a Symposium on “Financial Regulatory Reform: Dodd-Frank and Beyond.” To visit the Symposium Homepage, click here. To view the Agenda, click here. To view video proceedings of the event, click here.

A Test Where the Banks Had the Questions and the Answers,” DealBook, The New York Times, March 2, 2011 The Federal Reserve is set to release results on its most recent round of “stress tests.” Eric Talley, enlisted by the Congressional Oversight Panel to judge the tests comments.  The results announced in November and dubbed Son of Stress Test 2009, is a followup to tests the Fed conducted in the wake of the financial crisis.

BCLB and the Berkeley Business Law Journal (BBLJ) launched an online journal, The Network: Business at Berkeley Law, to provide academics, professionals, policymakers, the business community and the general public a forum to examine and keep aware of current issues and events at the intersection of law, business and economics.

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DealBook, The New York Times, January 11, 2011 – The Facebook-Goldman Sachs deal forces a debate amongst academics and commentators about the amount of regulations asserted on companies going public. Although some argue that “overregulation had shut down the I.P.O. market,” Robert Bartlett ” found that the majority of companies bought by private equity firms still voluntarily complied with the provisions of Sarbanes-Oxley in order to issue debt to finance these acquisitions.” “Commentators who think that there is too much regulation have asserted that Sarbanes-Oxley and increased United States regulation of public companies deterred Facebook from going ahead with an initial public offering this year.”

BCLB Comments on Proposed SEC Rulemaking Regarding Exemption for Venture Capital Funds. One significant element of the Dodd-Frank Act is its mandate that most private fund advisers register under the Advisers Act.  The Dodd-Frank Act, however, specifically exempted venture capital funds from this registration requirement.  BCLB has submitted comments on the SEC’s proposed implementing rules in this regard.

Bloomberg Radio – Robert Bartlett discusses the real life legal issues surrounding the “Social Network” battle between Zuckerberg and the Winklevoss brothers over Facebook. 

Stavros Gadinis, presented research on post-crisis regulatory reforms to lawyers and officials from the Treasury Department.  His talk, “Finance Ministries in Systemic Regulation:  The New Players.” focused on the  2007-2008 crisis and the common shock that affected many jurisdictions at once. With the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Treasury has extensive new responsibilities with respect to many facets of financial regulation.  Did other countries follow the U.S. lead of providing additional authority to finance ministries? The talk focused on developments in key foreign jurisdictions (UK, France, Germany) and presented evidence from Spain, Canada, Japan.  As Prof. Gadinis’ research shows, many jurisdictions turned towards the central government, but the type, scope, and extent of supervisory response varies across borders

The Wall Street Journal,
 China Real Time Report, January 13, 2011 – Stanley Lubman comments on China’s recent expansion of the rights of its citizens to obtain redress for harms caused by intentional or negligent conduct by government agencies. A small but significant step.

January 5, 2011 – Eric Talley joins Stacey Vanek Smith on American Public Media’s Marketplace to discuss the SEC’s investigation into the Goldman Sachs-Facebook deal