Who Shut Off the A/C?: Turning Up the Heat on Corporate Attorneys and the Attorney Client Privilege

I.  Introduction           

The decision of Judge Jed Rakoff in the settlement agreement between Bank of America (“BofA”) and the Securities and Exchange Commission (“SEC”) is one that could strike fear in the hearts of corporate attorneys everywhere. On August 3, 2009, the SEC filed charges against the Bank of America Corporation for its lack of disclosure to its shareholders about bonuses paid to Merrill Lynch executives in the merger. [1]            

The Bank of America/Merrill Lynch merger is a complicated web of litigation and investigation that has become multifaceted as time goes on. As stated by Pennsylvania law professor David Skeel, “It’s like a multiplayer chess game where each party is making different moves from a different strategic position and each party has a huge amount at stake.” [2]           

While the SEC is investigating the lack of disclosure to BofA shareholders regarding the bonuses paid out to Merrill Read the rest

R.I.P. Vanilla Dreams, You Will Be Missed

I. Introduction

In smoke-filled rooms, Big Tobacco executives are patting themselves on their backs while local smoke shops and flavored-cigarette aficionados are increasingly disgruntled by the loss of their Djarum cloves, Cherry Jubilee and Vanilla Dreams. The ban was introduced by the U.S. Food and Drug Administration (FDA) as an important step in curbing cigarette use among teenagers, branding flavored cigarettes as a “gateway for many children and young adults to become regular smokers.” [1] However, as the ban approaches is second week of implementation, gaping loopholes within the prohibition has left the ban to open attack by others. [2] This paper will attempt to cast doubt on the effectiveness of the recent ban on teenage smoking cessation efforts, showing that the tobacco products favored by teenagers are not affected by the ban. Consequently, this paper will argue that the ban will mainly profit major U.S. cigarette producers, Phillip Morris Read the rest

The Impact of the Financial Crisis on Nonprofits

I.          INTRODUCTION          

Nonprofits play an important role in the American economy, accounting for 5.2% of the domestic GDP and 8.3% of US wages and salaries. [1] At a time when most sectors of the American economy feel the pinch of the recession, the nonprofit sector’s financial struggles should raise additional concerns for the US government, because of the increasing amount of Americans seeking assistance from the nonprofits.  This article will detail some of the statistics regarding the financial struggles of the nonprofits during the current recession.  Additionally this article offers insight into advice from the legal community regarding counseling such nonprofits. Finally, this article provides a recommendation and conclusion as to the steps that nonprofits should keep in mind while coping through the recession.  


Nonprofits provide a variety of widely needed benefits in our communities, such as serving the needs of Read the rest

Plug the Leak: Employee Turnover- A Consequence of Discriminatory Behavior?

      I.        Introduction


What does employee turnover look like these days?  Well, much like pouring liquid into a sieve- analogous to employees passing through a company much too rapidly. According to the Bureau of Labor Statistics, which collects and compiles monthly data on a sampling of business establishments, the total number of employees who left their jobs exceeded those being hired from July 2008 through June 2009. [1] “Over the 12 months ending in June, hires totaled 51.8 million and separations totaled 57.1 million, yielding a net employment loss of 5.3 million.” [2] The increasing problem of employee turnover seems to revolve around two vital issues.  Companies do not fully understand what causes employee turnover, and they do not know how to go about correcting the problem. This article will discuss:  1) the costs and causes of employee turnover; 2) the methods by which different Read the rest

M & A’s- I’ll Drink to That

I.                      Introduction

Amidst the economic downturn over the world, many industries have seen a stunt in growth.  In fact, during recessions, often consolidation among competing businesses within an industry is the only alternative to extinction.  This is evidenced in the banking industry (i.e. Merrill Lynch sold to Bank of America in order to avoid bankruptcy) [1] as well the auto industry (i.e. Government gives Chrysler thirty day deadline to merge with Fiat). [2] Yet, in recent years, it is the beer industry that has seen more mergers and acquisitions than arguably any other sector.  This article will discuss the reasoning behind the consolidation within the industry, examine the strategic approaches taken in the industry when merging with or acquiring a competitor, and finally, the future of mergers and acquisitions (M&A’s) within the brewing industry.

II.                   Discussion

The increasing consolidation within the beer industry is Read the rest

Nationalized Treasure

I. Introduction

On February 27, 2009, the United States government announced that it was taking measures that could result in it taking as much as a 36% equity stake in Citigroup, Inc.[1] This would make the federal government the largest shareholder in Citibank.[2] By converting $25 billion in preferred shares into common stock, the federal government hoped that the move would stabilize Citibank in a tumultuous market.[3] As a result of this move, a number of people have voiced a growing concern over the federal government taking further steps to nationalize other major financial institutions.[4]

Through taking a 36% stake in Citigroup, the federal government did not fully nationalize Citibank.  As a result, Citibank is now caught between the private markets and governmental interests. While nationalization could seriously undermine confidence in the financial system, as Bank of America Chief Executive Officer Kenneth Lewis suggests,[5] this scenario poses some unique … Read the rest

The Big Three: Bailout or Bankruptcy?

I. Introduction

The auto industry’s troubles have recently come to light in mainstream American news. The big three automakers, comprised of GM, Chrysler and Ford, have seen slumping sales and are in need of major financial help to avoid going under. In 2008, GM’s sales were down 21% in North America. [1] Ford reported a loss of $14.6 billion dollars in the same year. [2] Chrysler’s sales were down 30% in 2008, which was the largest reported loss of the major auto makers last year. [3] Both GM and Chrysler have requested help in the form of federal loans from the US government, while Ford has made an effort to stay afloat without federal help. [4]

II. Government Intervention

The auto industry is a private industry and is thus driven by market forces. Generally, the government allows these market forces to determine which companies will thrive and which will fail. … Read the rest

Weekend at Bernie’s

I. Introduction

The past few months have seen numerous financial frauds
uncovered. Two of these frauds are
particularly noteworthy. On December 11th,
2008, the largest of these financial frauds was unveiled when Bernard Madoff
admitted to a $50 billion fraud through his firm, Madoff Securities.[1] On February 17th, the Securities
and Exchange Commission (SEC) filed charges against Stanford International Bank
relating to an allegedly fraudulent $8 billion certificate of deposit (CD)
scheme.[2] Other alleged frauds have come to light,
often in highly publicized and dramatic fashion.[3] These frauds suggest something is amiss in the markets.

In the midst of the current economic crisis, these alleged
financial frauds have further destabilized a badly shaken market. While fraud is an unfortunate fact of the
market, the allegations against Madoff and Stanford paint a picture of frauds
that have reached massive proportions and that have been ongoing for
years. The intention of this … Read the rest

The Wall Street Bonus Culture: Well-Deserved Benefit or Unnecessary Waste?

Recent headlines that Wall Street investment banking executives have received billions of dollars in bonuses, just months after the federal government has given these same firms billions of dollars in bailout money, has greatly increased skepticism about acceptable methods of awarding bonuses. [1]  President Obama condemned the awarding of these exhobirtant bonuses. "That is the height of irresponsibility. It is shameful. And part of what we're going to need is for the folks on Wall Street who are asking for help to show some restraint and show some discipline and show some sense of responsibility." [2] However, many individuals on the flip side of the coin believe these bonses are imperative to the success of the banking business. [3] This article will discuss the arguments for and against seemingly inflated bonus plans by delving into the most common types of compensation plans and their relation to the current economic crisis on Wall Street.


In order Read the rest

Tamed Tigers: Sovereign Wealth Funds as Passive Investors

I. Introduction

The purpose of this article is to analyze the current role of sovereign
wealth funds in a corporate governance scheme. Sovereign wealth funds, which have become increasingly important
institutional investors in the United States, have found their activities in
equities markets in the United States increasingly constrained due to stringent
regulations.  While these sovereign wealth funds raise important policy
considerations for lawmakers, these regulations hinder sovereign wealth funds
in their role as investors.  Despite the power the sovereign wealth funds
could hold in American companies, these funds have effectively become “tamed
tigers.” Despite their enormous power,
they simply cannot exercise it. Thus, this
article will examine whether having sovereign wealth funds in a “tamed tiger”
capacity should continue or whether regulations should encourage more activity
from sovereign wealth funds.

II. Sovereign Wealth Funds

The best definition of what sovereign wealth funds are and what they do
comes from … Read the rest