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A New Regulatory Paradigm For The SEC?

Many are speculating on the future of federal securities regulation as a result of the election of Donald J. Trump and the concomitant Republican control of both houses of Congress. Broc Romanek, for example, asks whether Michael S. Piwowar will become the SEC’s next Chairman.  Broc notes that Commissioner Piwowar is an economist, not a lawyer. …

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Does Every 10% Owner Owe A Fiduciary Duty To The Corporation?

If I told you that all 10% owners owe a fiduciary duty to the corporation, I’d be surprised if you weren’t surprised.  However, that was, in fact, the holding of the Second Circuit Court of Appeals last October in Donoghue v. Bulldog Investors General Partnership, 696 F.3d 170 (2d Cir. 2012): Thus, pursuant to § 16(b),…

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Second Circuit Rejects Brachycephalic Canine Fund’s Section 16(b) Defense

When it comes to challenging the status quo of securities regulation, Bulldog Investors lives up to its name.  In 2006, Bulldog’s principal, Phillip Goldstein, successfully challenged the Securities and Exchange Commission’s hedge fund rule.  Goldstein v. SEC, 451 F.3d 873 (D.C. Cir. 2006).  Later, Bulldog was less successful in challenging an enforcement action taken by…

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Misery (Taxes) Acquaints A Court With Strange Bedfellows (Sections 83 and 16(b))

Yesterday, the Ninth Circuit Court of Appeals issued an opinion in a federal tax refund suit that spends a surprising amount of time discussing whether the plaintiff could be subject to suit under Section 16(b) of the Securities Exchange Act of 1934. In Strom v. United States (9th Cir. Case No. 09-35175, Apr. 6, 2011), the…

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