October 13 | October
4 | September 27
| September 7 | August
31 | June 6, 2000
| April 25 2000 | March
2000 | February 2000
October 13, 2000
- The Center for Business
Ethics at the University of St. Thomas in Houston has recently
published Corporate Governance: Ethics Across the Board.
Marianne Jennings, the Director of the Lincoln Center for Applied
Ethics at Arizona State University, wrote an article titled Stakeholder
Theory: Letting Anyone Whos Interested Run the Business
No Investment Required.
- The Second Circuit Court of Appeals held that
a corporate officer can waive privileges even if the corporation
has expressly refused to waive them. A corporations founder,
chairman, and controlling shareholder testified individually and
not as the corporations representative regarding the companys
potential facilitation of firearm sales. He knew that the company
had asserted attorney-client and work-product privileges and therefore
knew he was not allowed to divulge privileged communications.
However, he made references to counsels advice during his
testimony before a grand jury. (In re Grand Jury Proceedings United
States v. Doe, 2d Cir., No. 99-6311).
October 4, 2000
- By an 8-1 vote, the Supreme Court sent the Microsoft
antitrust case to a federal appeals court. A final decision on
whether Microsoft must be broken up could be years away. The Justice
Department had wanted the nation's highest court to hear arguments
this winter and issue a ruling in the spring, but the justices
granted Microsoft's request to send the case to the federal appeals
court. Justice Stephen G. Breyer dissenting, saying the Court
should hear arguments now because the case ``significantly affects
an important sector of the economy - a sector characterized by
rapid technological change.''
September 27, 2000
- Cato Institute Adjunct Scholar Richard B. McKenzie
writes in his recently published Policy Analysis that the central
claim against Microsoft that 70,000 software programs for
Windows create an applications barrier to entry into
the operating system is entirely baseless. He writes, The
overwhelming majority of the 70,000 Windows applications that
make up the supposed impregnable barrier to entry either never
existed as unique products, no longer exist, or are totally out
of date. To view his study, visit: http://www.cato.org/pubs/pas/pa-380es.html
- The Wall Street Project, an affiliate of Rev.
Jesse Jacksons Rainbown/PUSH Coalition, continues to antagonize
a number of companies in which it has purchased stock and
has been credited by Business Week with increasing the number
of African American Directors. Rev. Jackson opposed the MCI WorldCom
and Sprint merger. He testified to the FCC that The proposed
merger will result in increased concentration of market power
and will demolish competition in the domestic long distance market.
The proposed merger will result in higher prices to low-income
consumers and will harm immigrant and minority consumers of international
long distance services. Rev. Jackson also met with officials
of Coca-Cola, including the Chairman, to discuss the possibility
of a fast and appropriate settlement of a racial discrimination
lawsuit against the company. The state comptroller of New Yorks
pension fund, which owns more than 7.4 million shares in Coca-Cola,
also sent a letter to the Chairman urging a quick settlement.
The Rainbow/PUSH Coalition also held a conference in East Palo
Alto to explore strategies for closing the digital divide.
Business leaders attending the event included Carly Fiorina, the
CEO of Hewlett Packard, John Chambers, CEO of Cisco Systems, and
Craig Barrett, CEO of Intel. More than 700 industry government,
education, and community leaders came together for the event.
Intel contributed $100,000 to cover costs for the conference.
Rev. Jackson also attended General Motors June 6 annual meeting
and called on the company to practice minority inclusion. Among
the Rainbow/PUSH Coalitions concerns are that none of GMs
revenue producing segments is headed by a minority executive.
Rainbow/PUSHs research shows that in dealerships, procurement
of goods and professional services, minority owned businesses
account for 5 percent or less of General Motors total spending.
September 7, 2000
- Will the Net Turn Car Dealers into Dinosaurs?
State Limits on Auto Sales Online
By Solveig Singleton
Protectionism does not help consumers. This study discusses the
various state laws that are in place in the name of the consumer,
but in reality only protect the middleman. It is conceded that
every company has a right to be in business, but not that there
should be laws to ensure that they can continue to operate in
the same way. The Internet is changing the way people do business,
and states are attempting to apply old laws to new business models.
Also, due to the interstate nature of the Internet, these state
laws may be construed to be violating the commerce clause of the
Constitution. Local dealers will not be run out of business due
to their local service ability. States should not fear this new
development in technology and allow competition to take place.
August 31, 2000
- The Cato Institute is holding it Technology &
Society conference from November 9-10 at the Hyatt Regency in
Reston, Virginia. The conference brings together CEOs of the nation's
leading high tech entertainment companies to explore the challenges
the industry is facing with regard to intellectual property, free
speech, and free trade.
June 6, 2000
- DOJ and FTC issued the final version of Antitrust Guidelines
for Collaborations Among Competitors to provide "an analytical
framework to assist businesses in assessing the likelihood of
an antitrust challenge" to joint ventures, strategic alliances,
and other competitor collaborations. The 35-page document is at
on April 7 at http://www.ftc.gov/os/2000/04/
April 25, 2000
- The Internet is fundamentally changing the way
in which securities are distributed, both in public offerings
and in private placements. The SEC, the securities industry and
the private bar are struggling to understand how the current regulatory
structure will change to accommodate these changes. Click here
for a library of the leading authorities on how the Internet will
change securities regulation.
- Last month we flagged the Delaware Court of Chancery's
then-upcoming opinion in Chesapeake Corporation v. Shore as one
to watch because of the counterclaim under DGCL Section 203. The
opinion is now out, and it is a blockbuster, not only because
the Court rejected the claim under Section 203 but because of
its reinterpretation of Unitrin, Inc. v. American General Corp.,
651 A.2d 1361 (Del. 1995). Vice-Chancellor Leo Strine, who issued
the opinion in Chesapeake, took another swipe at the fiduciary
duty standards governing target company boards of directors in
a hostile takeover contest in In re Gaylord Container Corporation
Securities Litigation. His critique of Unocal v. Mesa Petroleum,
Inc., 493 A.2d 946 (Del. 1985) promises to reignite the debate
over proper standards. For this and other recent Court of Chancery
opinions, check the Delaware Corporate Law Clearinghouse, http://corporate-law.widener.edu/.
Meanwhile, the Delaware Supreme Court has not been idle. On February
9, the Court issued its opinion in Brehm v. Eisner, the case challenging
the compensation package awarded by The Walt Disney Company to
Michael Ovitz, former president of Disney. The Court reversed
the Court of Chancery on plaintiff's claims for breach of fiduciary
duty and waste, allowing the plaintiffs to replead.
- The lead plaintiff provisions of the Private
Securities Litigation Reform Act of 1995 are attracting the SEC's
attention in Moore v. Network Associates. Last fall, Judge Alsup
of the Northern District of California held, among other things,
that aggregated unrelated investors could not serve as group entitled
to lead plaintiff status. See In re Network Associates, Inc. Securities
Litigation, 76 F. Supp. 2d 1017 (N.D. Cal. 1999). The case is
now on appeal before the Ninth Circuit, and the SEC has filed
an amicus brief. .
- The SEC recently announced that it has charged
19 defendants with insider trading. According to the SEC's press
release - which touts this as the first case "Charging Use
of Internet to Pass Inside Information" - the defendants
"engaged in a widespread insider trading scheme that produced
more than $8 million in illegal profits from trading in the securities
of 23 public companies."
- The SEC released a report on day-trading firms on February 25.
The Report stated, "While the Staff's examinations did not
reveal widespread fraud, examiners found indications of serious
securities law violations warranting referrals to the SEC's Enforcement
staff at several firms." For the full text of the report,
- The latest issue of The Business Lawyer (Nov.
1999) has a long article on "The Merger Wave: Trends in Merger
Enforcement and Litigation," by Richard Parker, the new Director
of the FTC's Bureau of Competition, and David Balto, an Assistant
Director. In a speech on February 17, Robert Pitofsky, Chairman
of the Federal Trade Commission, described the standards used
by the FTC in reviewing restructuring proposals. Pitofsky stated,
"My intent today is not to describe a new or revised policy,
but only to describe what we are doing, and have been doing, for
some time." Nevertheless, the speech was widely viewed as
an important warning that the FTC may be looking at restructuring
proposals more critically in the future. For the text of the speech,
If you have been following the merger of BP Amoco P.L.C., and
Atlantic Richfield Company, check of the FTC's Web site for the
text of pleadings. See http://www.ftc.gov/os/bpamoco/index.htm.
- The AOL/Time Warner has predictably generated
a stockholder suit for breach of fiduciary duty. The complaint
in that case -- filed the day the merger was announced -- can
be found at: http://corporate-law.widener.edu/documents/complaints/17719-001.pdf
- The recent counterclaim in Chesapeake Corporation
v. Shore challenges actions of the plaintiffs under DGCL Section
203. This case -- which promises to be the first substantial litigation
over Section 203 -- explores the extent to which a hostile acquiror
can lock up the votes of target shareholders without becoming
an "interested stockholder" for purposes of Section
203. The brief describing the Section 203 claim can be located
- The Microsoft antitrust litigation is heating
up again. The full text of Microsoft's recent response to Judge
Jackson's conclusions of law as well as the reply can be found
- The Securities and Exchange Commission recently
ordered securities markets to begin quoting securities prices
in decimals by July 3, 2000. For the text of the order, see: http://www.sec.gov/offices/marketr/34-42360.htm
- The Securities & Exchange
Commission recently adopted new rules governing audit committees
and requires auditor review of quarterly financial information
in Form 10-Q's. The new rules are located at: http://www.sec.gov/rules/final/34-42266.htm
- The Securities & Exchange
Commission recently adopted new rules exempting foreign takeovers
and exchange offers from SEC regulation provided US ownership
is 10% or less. The new rules are located at: http://www.sec.gov/rules/final/33-7759.htm
- Andover.Net recently went public using
OpenIPO, Hambrecht & Quist's dutch auction technique. For
the story, see: http://www.upsidetoday.com/texis/mvm/open_season?id=3884ff6b0