In 2013, India enacted one of the most robust private enforcement regimes for securities fraud violations in the world. Unlike in most other countries, Indian shareholders can now initiate securities fraud lawsuits on their own, represent all other defrauded shareholders unless those shareholders affirmatively opt out, and collect money damages for the entire class. The only thing missing is a better financing mechanism: unlike the United States, Canada, and Australia, India does not permit contingency fees, so class action lawyers cannot front the costs of litigation in exchange for collecting a percentage of what they recover. On the other hand, the 2013 law enacted a public financing regime for securities fraud class actions and it is possible third-party financing will be permitted; these mechanisms may make up some of the loss in effectiveness caused by the lack of contingency fees. It is still too early to tell.
{"title":"The Indian Securities Fraud Class Action: Is Class Arbitration the Answer?","authors":"Brian T. Fitzpatrick, Randall S. Thomas","doi":"10.2139/ssrn.3552125","DOIUrl":"https://doi.org/10.2139/ssrn.3552125","url":null,"abstract":"In 2013, India enacted one of the most robust private enforcement regimes for securities fraud violations in the world. Unlike in most other countries, Indian shareholders can now initiate securities fraud lawsuits on their own, represent all other defrauded shareholders unless those shareholders affirmatively opt out, and collect money damages for the entire class. The only thing missing is a better financing mechanism: unlike the United States, Canada, and Australia, India does not permit contingency fees, so class action lawyers cannot front the costs of litigation in exchange for collecting a percentage of what they recover. On the other hand, the 2013 law enacted a public financing regime for securities fraud class actions and it is possible third-party financing will be permitted; these mechanisms may make up some of the loss in effectiveness caused by the lack of contingency fees. It is still too early to tell.","PeriodicalId":51878,"journal":{"name":"Northwestern Journal of International Law & Business","volume":"40 1","pages":"203"},"PeriodicalIF":0.4,"publicationDate":"2020-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68606682","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Critics of the international investment regime have claimed that its institution of arbitration is biased against developing states. Others have countered by arguing that any difference in treatment is better explained by the lack of democratic governance in developing states. This paper uses the largest dataset on concluded investment treaty arbitrations compiled to date to test these competing assertions of development bias and governance conflation. Beginning with a theoretical framework for both hypotheses, it argues that we need to disaggregate the potential causal mechanism, which includes replacing the idea of democratic governance with that of governmental quality. Empirically, the paper finds that the development status of a respondent state is a consistently powerful and statistically significant explanation of investment treaty arbitration outcome. Even after the introduction of a range of control variables and finely-tuned quality of governance variables, poorer states remain vastly more likely to lose in arbitration than wealthier states. However, some caution is needed in interpreting these results and more precise research is needed on competing development bias theories.
{"title":"Poor States or Poor Governance? Explaining Outcomes in Investment Treaty Arbitration","authors":"D. Behn, Tarald Laudal Berge, M. Langford","doi":"10.2139/SSRN.2740516","DOIUrl":"https://doi.org/10.2139/SSRN.2740516","url":null,"abstract":"Critics of the international investment regime have claimed that its institution of arbitration is biased against developing states. Others have countered by arguing that any difference in treatment is better explained by the lack of democratic governance in developing states. This paper uses the largest dataset on concluded investment treaty arbitrations compiled to date to test these competing assertions of development bias and governance conflation. Beginning with a theoretical framework for both hypotheses, it argues that we need to disaggregate the potential causal mechanism, which includes replacing the idea of democratic governance with that of governmental quality. Empirically, the paper finds that the development status of a respondent state is a consistently powerful and statistically significant explanation of investment treaty arbitration outcome. Even after the introduction of a range of control variables and finely-tuned quality of governance variables, poorer states remain vastly more likely to lose in arbitration than wealthier states. However, some caution is needed in interpreting these results and more precise research is needed on competing development bias theories.","PeriodicalId":51878,"journal":{"name":"Northwestern Journal of International Law & Business","volume":"38 1","pages":"1"},"PeriodicalIF":0.4,"publicationDate":"2016-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68282004","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The French adoption of a corporate board quota for women reflects Europe's increasingly stakeholder-oriented approach to corporate governance, one that stands in marked contrast with that of the United States. This Article discusses how the corporate board quota will shift French and European corporate governance. The change accentuates an already established stakeholder corporate culture widespread in Europe, most notably evidenced by the presence of worker representation on boards. In contrast, the United States' corporate governance structure increasingly places the shareholder at its center. The proliferation of quotas for women on corporate boards in the national and transnational European contexts is a factor that will further distinguish European corporate governance regimes from those of the United States. France's extensive history of public participation in private corporate governance stands in contrast with the liberal contract and property system of the United States. These historical divergences of stakeholder or shareholder orientations stand apart in the United States, attention to stakeholder inclusion has remained an academic exercise, while French and European governance embodies substantial stakeholder inclusion. Integrating a critical mass of women into the world's largest economy's corporate management will revolutionize capital structures and the regulatory regimes that govern them. This Article argues that quotas may serve to heighten the divide between Europe and other regions on stakeholder/shareholder corporate governance.
{"title":"Quotas and the Transatlantic Divergence of Corporate Governance","authors":"V. Magnier, Darren Rosenblum","doi":"10.2139/SSRN.2571714","DOIUrl":"https://doi.org/10.2139/SSRN.2571714","url":null,"abstract":"The French adoption of a corporate board quota for women reflects Europe's increasingly stakeholder-oriented approach to corporate governance, one that stands in marked contrast with that of the United States. This Article discusses how the corporate board quota will shift French and European corporate governance. The change accentuates an already established stakeholder corporate culture widespread in Europe, most notably evidenced by the presence of worker representation on boards. In contrast, the United States' corporate governance structure increasingly places the shareholder at its center. The proliferation of quotas for women on corporate boards in the national and transnational European contexts is a factor that will further distinguish European corporate governance regimes from those of the United States. France's extensive history of public participation in private corporate governance stands in contrast with the liberal contract and property system of the United States. These historical divergences of stakeholder or shareholder orientations stand apart in the United States, attention to stakeholder inclusion has remained an academic exercise, while French and European governance embodies substantial stakeholder inclusion. Integrating a critical mass of women into the world's largest economy's corporate management will revolutionize capital structures and the regulatory regimes that govern them. This Article argues that quotas may serve to heighten the divide between Europe and other regions on stakeholder/shareholder corporate governance.","PeriodicalId":51878,"journal":{"name":"Northwestern Journal of International Law & Business","volume":"34 1","pages":"249"},"PeriodicalIF":0.4,"publicationDate":"2015-02-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2139/SSRN.2571714","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68208491","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper analyzes micro-level dynamics of changes in ownership structures. It investigates an unique event: changes in ownership patterns currently taking place in Brazil. It contributes to the corporate governance literature, building on this empirical evidence to further advance theoretical understanding on how and why concentrated ownership structures can change towards dispersed ownership. Commentators have been arguing that the Brazilian capital markets are finally taking off. The number of listed companies and IPOs in the Sao Paulo Stock Exchange (Bovespa) has greatly increased. Firms are adhering to higher standards of corporate governance through migration to Bovespa's special listing segments. Companies have sold control in the market and the stock market has recently seen an attempt of a hostile takeover. This paper discusses these current developments. It analyzes ownership structures of companies listed in Bovespa's listing segments based on data from 2006 and 2007. It provides the first evidence on the decline of ownership concentration in the structure of Brazilian corporations. There is, however, an important caveat: ownership has become more dispersed in Novo Mercado, the listing segment that requires firms to comply with the one-share-one-vote rule. This paper, then, analyzes firms that have listed in Novo Mercado, Level 2 and Level 1. It investigates firms' migration patterns. It finds that 85% of Novo Mercado's are new entrants firms. Traditional firms have mostly migrated to Level 1, the least stringent segment regarding corporate governance practices. This suggests that we can identify two very different corporate worlds in Brazilian capital markets: the new fashion corporations who adopt better corporate governance patterns, and the old fashion corporations, who still have not changed their main patterns of corporate governance or corporate ownership. The paper additionally explores the main consequences of increased dispersion of ownership in private contracting, such as shareholders' agreements and bylaws. I present evidence on the increasing reliance on shareholders' agreements to coordinate joint control and to bind directors' votes. I also discuss the new and growing adoption of poison pills in bylaws. This paper also supplements recent literature on controlling shareholders. Examining the conditions that have lead Brazilian concentrated ownership to become significantly more dispersed helps to shed light on the incentives that may alter preferences of controlling shareholders. This discussion allows us to understand why controlling shareholders opted for a greater diversity of ownership structures. The analysis enables us to draw comparisons and extract conclusions that contribute to the comparative corporate governance debate and advance our knowledge of corporate structures in other emerging countries.
{"title":"Changing the Paradigm of Stock Ownership from Concentrated Towards Dispersed Ownership? Evidence from Brazil and Consequences for Emerging Countries","authors":"Érica Gorga","doi":"10.2139/SSRN.1121037","DOIUrl":"https://doi.org/10.2139/SSRN.1121037","url":null,"abstract":"This paper analyzes micro-level dynamics of changes in ownership structures. It investigates an unique event: changes in ownership patterns currently taking place in Brazil. It contributes to the corporate governance literature, building on this empirical evidence to further advance theoretical understanding on how and why concentrated ownership structures can change towards dispersed ownership. Commentators have been arguing that the Brazilian capital markets are finally taking off. The number of listed companies and IPOs in the Sao Paulo Stock Exchange (Bovespa) has greatly increased. Firms are adhering to higher standards of corporate governance through migration to Bovespa's special listing segments. Companies have sold control in the market and the stock market has recently seen an attempt of a hostile takeover. This paper discusses these current developments. It analyzes ownership structures of companies listed in Bovespa's listing segments based on data from 2006 and 2007. It provides the first evidence on the decline of ownership concentration in the structure of Brazilian corporations. There is, however, an important caveat: ownership has become more dispersed in Novo Mercado, the listing segment that requires firms to comply with the one-share-one-vote rule. This paper, then, analyzes firms that have listed in Novo Mercado, Level 2 and Level 1. It investigates firms' migration patterns. It finds that 85% of Novo Mercado's are new entrants firms. Traditional firms have mostly migrated to Level 1, the least stringent segment regarding corporate governance practices. This suggests that we can identify two very different corporate worlds in Brazilian capital markets: the new fashion corporations who adopt better corporate governance patterns, and the old fashion corporations, who still have not changed their main patterns of corporate governance or corporate ownership. The paper additionally explores the main consequences of increased dispersion of ownership in private contracting, such as shareholders' agreements and bylaws. I present evidence on the increasing reliance on shareholders' agreements to coordinate joint control and to bind directors' votes. I also discuss the new and growing adoption of poison pills in bylaws. This paper also supplements recent literature on controlling shareholders. Examining the conditions that have lead Brazilian concentrated ownership to become significantly more dispersed helps to shed light on the incentives that may alter preferences of controlling shareholders. This discussion allows us to understand why controlling shareholders opted for a greater diversity of ownership structures. The analysis enables us to draw comparisons and extract conclusions that contribute to the comparative corporate governance debate and advance our knowledge of corporate structures in other emerging countries.","PeriodicalId":51878,"journal":{"name":"Northwestern Journal of International Law & Business","volume":"29 1","pages":"439"},"PeriodicalIF":0.4,"publicationDate":"2008-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68142767","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper is an examination of the notions of law, the Rule of Law and commercial practice in the West and China. The paper outlines the basic philosophical principles and legal concomitants of the Rule of Law, and the corollary Chinese principles and concomitants. It examines the traditions and differences and similarities in thinking about the issues in each tradition. It then examines the implications of these differences in the traditions of commercial dispute resolution. After this discussion of traditions, similarities and differences and their impact on commercial dispute resolution, the paper turns to address how the discrepancies could be dealt with in the FTA.
{"title":"Fundamentally Conflicting Views of the Rule of Law in China and the West & Implications for Commercial Dispute","authors":"B. Sheehy","doi":"10.2139/SSRN.777087","DOIUrl":"https://doi.org/10.2139/SSRN.777087","url":null,"abstract":"This paper is an examination of the notions of law, the Rule of Law and commercial practice in the West and China. The paper outlines the basic philosophical principles and legal concomitants of the Rule of Law, and the corollary Chinese principles and concomitants. It examines the traditions and differences and similarities in thinking about the issues in each tradition. It then examines the implications of these differences in the traditions of commercial dispute resolution. After this discussion of traditions, similarities and differences and their impact on commercial dispute resolution, the paper turns to address how the discrepancies could be dealt with in the FTA.","PeriodicalId":51878,"journal":{"name":"Northwestern Journal of International Law & Business","volume":"26 1","pages":"225"},"PeriodicalIF":0.4,"publicationDate":"2005-08-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67826210","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The increasingly international reach of law owes part of its momentum to individual lawyers and law firms that function as carriers of ideas, processes and policies. U.S. lawyers are important participants in this expanding influence of law, as they educate, train and deploy individuals educated and licensed in the U.S. and abroad. This article examines the ways in which law firms internationalize, and considers the regulatory environment governing crucial interactions between U.S. and foreign-educated lawyers. It builds upon prior work that investigated the impact on U.S. law firms of the development of an international market for legal services and the roles of foreign lawyers in the U.S. Regulation of the interaction between foreign and U.S. lawyers shapes the ways in which U.S. firms participate in the developing international market for legal services; it may well determine the placement and extent of that participation through U.S.-based activities. The article examines regulation of non-U.S. lawyers in state bar admission and foreign legal consultant rules, analyzes these rules and compares them to an ideal regulatory regime. It also reports on data illustrating the ways in which the regulatory status of foreign legal consultant is used by non-U.S. lawyers. The foreign legal consultant title has been adopted for use apart from the licensed status, which results in confusion. The article combines an empirical and theoretical approach, and proposes a new regulatory overlay for international law firms and lawyers.
{"title":"Regulatory Mismatch in the International Market for Legal Services","authors":"Carole Silver","doi":"10.2139/SSRN.408340","DOIUrl":"https://doi.org/10.2139/SSRN.408340","url":null,"abstract":"The increasingly international reach of law owes part of its momentum to individual lawyers and law firms that function as carriers of ideas, processes and policies. U.S. lawyers are important participants in this expanding influence of law, as they educate, train and deploy individuals educated and licensed in the U.S. and abroad. This article examines the ways in which law firms internationalize, and considers the regulatory environment governing crucial interactions between U.S. and foreign-educated lawyers. It builds upon prior work that investigated the impact on U.S. law firms of the development of an international market for legal services and the roles of foreign lawyers in the U.S. Regulation of the interaction between foreign and U.S. lawyers shapes the ways in which U.S. firms participate in the developing international market for legal services; it may well determine the placement and extent of that participation through U.S.-based activities. The article examines regulation of non-U.S. lawyers in state bar admission and foreign legal consultant rules, analyzes these rules and compares them to an ideal regulatory regime. It also reports on data illustrating the ways in which the regulatory status of foreign legal consultant is used by non-U.S. lawyers. The foreign legal consultant title has been adopted for use apart from the licensed status, which results in confusion. The article combines an empirical and theoretical approach, and proposes a new regulatory overlay for international law firms and lawyers.","PeriodicalId":51878,"journal":{"name":"Northwestern Journal of International Law & Business","volume":"23 1","pages":"487"},"PeriodicalIF":0.4,"publicationDate":"2003-05-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68691222","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Infrastructure for Commerce","authors":"M. Likosky","doi":"10.4324/9781351145282-6","DOIUrl":"https://doi.org/10.4324/9781351145282-6","url":null,"abstract":"","PeriodicalId":51878,"journal":{"name":"Northwestern Journal of International Law & Business","volume":"33 1","pages":"1"},"PeriodicalIF":0.4,"publicationDate":"2001-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"70462181","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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