Regulating the PIPE Market: The Unintended Ripple Effects

           This week, the authors of SEC Enforcement in the PIPE Market: Actions and Consequences are presenting their paper at the CFA-FAJ-Schulich Conference on Fraud, Ethics and Regulation. Their work discusses the SEC’s early 2000s reforms affecting the PIPE (private investment in public equity) market. The SEC intended these reforms to “reduce the opportunities for investor stock price manipulation.”  This article contends (and the paper hints) that the SEC’s efforts to crack down on this price manipulation not only had unintended deleterious effects on the PIPEs market but also had little impact on the intended target of the reforms—investor exploitation of companies seeking PIPE capital.

            A PIPE transaction is a unique way for distressed companies to publicly solicit capital and external financing from privately-held investors, such as hedge funds and private equity funds. A PIPE is generally a good way for these companies to Read the rest

Germany and Patents: All that Glitters isn’t Gold

               On April 2nd, Microsoft decided to move its European distribution center from Germany to the Netherlands. The decision was not the product of distribution logistics. Rather, Microsoft sought to avoid German patent law in advance of a pending April 17th opinion by the German patent courts. German patent law has made the country something of a patent shelter in Europe. Germany provides expedient decisions and easy-to-obtain injunctions that are hard to challenge for defendants. All that sounds fantastic until a corporation or small business is the target of those laws rather than the one benefitting. Furthermore, in these tough economic times, Germany’s patent regime has broad consequences for economic and technological development.

               Currently, two-thirds of all patent claims in Europe are filed in Germany. This fact is not surprising given all the seemingly … Read the rest