Month: October 2008

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Wall Street to Fraud Street: Disgruntled Investors Want Compensation

I. Introduction

With the financial crisis showing no signs of recovery many are worried about employment, job security, investments, and the overall economy. With the collapse of Lehman Brothers Holdings, the buyout of Merrill Lynch along with several other Wall Street firms, and the government bailout of American International Group, many are beginning to reevaluate and question Wall Street and the executives that run the corporations.[1] While the Bush administration was proposing a $700 billion bailout plan, investors began to point fingers at the wealthy corporate executives that pocketed millions of dollars while the companies they worked for crumbled.[2] Although there are several factors that played a part in the Wall Street crisis, investors are lining up to sue the executives with the deep pockets.[3] Two major issue at the center of heated discussion are: fiduciary duty and executive compensation.[4][5] 

II. Fiduciary Duty


A. Fiduciary Duty and Rise in Litigation

Corporate executives,

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New Stadiums, Higher Prices, No Remedy

I. Introduction

It seems like every sports franchise is building a new stadium these days. In New York alone, four franchises (the Yankees, Mets, Giants, and Jets) will be moving to three new facilities within the next two years. [1]. By 2011, other area teams including the Rangers, Liberty, Knicks, Nets, Devils, Islanders, and Redbulls will all be playing in new or renovated stadiums. [2] The allure of a new stadium cannot be denied: more luxury seating, refined amenities, state of the art technology on and off the field, attracting free agent athletes and corporate sponsors, and last but not least, the bragging rights to say "my home town ball park is better than yours!" Sadly, with new stadiums come new costs to fans of their sports, not the least of which is increased ticket prices. Additionally, apart from increased ticket prices, there are additional costs that come with new

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Banking Acquisitions during the Financial Crisis

I. Introduction

When the housing crisis was at its lowest point, entire neighborhoods were experiencing the possibility of foreclosure as residents defaulted on their mortgage payments. Foreclosures and consumer defaults have not only damaged the housing market but also have affected financial institutions. [1] The financial industry was hit particularly hard, especially leading subprime lending banking institutions. Washington Mutual, Freddie Mac, Wachovia, Bear Stearns, Countrywide and Merrill Lynch have been or are in the process of being acquired by big banks, strong enough to make the acquisition. [2] In this article, I will discuss the most recent acquisitions, Washington Mutual and Wachovia Corp., and analyze the benefits of this acquisition to the banking industry as well as the costs to consumers.

II. Background

Both Washington Mutual ("WaMu") and Wachovia Corp. ("Wachovia") suffered heavy losses after the housing market collapse. Wachovia and WaMu ranked first and second as the biggest providers

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Salute Your Shorts

I. A Short Introduction

With the recent collapse of numerous financial institutions,
the practice of short-selling (“shorting”) has come under fire. Some authors have gone so far to claim that
the actions of short-sellers (“shorters”) are among the core reasons for the
current credit crisis.[1] In response to this outcry, the United States
has imposed temporary bans on the shorting of certain stocks, particularly the
stocks of firms in the banking and finance sector, citing the need to protect
investors and markets.[2] Furthermore, New York Attorney General Andrew
Cuomo has launched an investigation into shorters for allegedly spreading false
rumors in the financial market.[3] These enforcement responses prompt the question;
do shorters have a legitimate role to play in a fair and open market?

II. History, in Short

There is a
long history of animosity towards shorters. Following the collapse of tulip craze in the Netherlands in the 1630s,
England … Read the rest