The proposition that a prudent investor should be diversified is widely accepted if not incontrovertible for ordinary investors – investors who have no reasonable expectation of influencing company management or business policy. Indeed, fiduciary duty requires that trustees and other...

This essay focuses on the classic 1940 case Litwin v. Allen, 25 N.Y.S.2d 667 (1940), in which the court ruled that directors and officers of a bank were liable for losses suffered by the bank from a transaction in which the bank bought a bond at a discounted price subject to an option permitting...

Stock repurchases by issuing corporations have always been controversial and have become even more so recently because of the perception that the excess funds used to finance buybacks have come from tax cuts and other sources (such as government bailouts) that were intended to stimulate...

In a typical securities fraud class action (SFCA) against a publicly traded company under SEC Rule 10b-5, the claim arises from an alleged cover-up of bad news by company agents. When the truth comes out, stock price drops, and fraud-period buyers sue to recover their losses. In most such cases,...

In We Have a Consensus on Fraud on the Market – And It's Wrong, James Spindler has attempted to defend securities fraud class actions (SFCAs) and the fraud-on-the-market (FOTM) doctrine by purporting to refute two arguments that have been cited by numerous scholars: (1) the circularity...

It has become almost standard practice in Delaware appraisal proceedings for the courts to adjust discount rates downward by the projected rate of inflation and GDP growth so as to reflect the prospect of higher future returns because of these factors. Since the value of a business varies...

In the controversial practice of appraisal arbitrage, activist investors buy up the shares of a corporation to be acquired by merger in order to assert appraisal rights challenging the price of the deal – which may already have been approved by the target stockholders. The practice is...