President Trump announced that the United States will withdraw from the Paris Climate Agreement. The U.S. is the world’s second-largest emitter of carbon, with China in the top spot. China affirmed its commitment to meeting its targets under the Paris Climate Agreement and recently canceled construction of 100 coal-fired power plants, with plans to invest billions in massive wind and solar projects. The Paris Climate Agreement is far from perfect and may hurt the US more than the other 195 countries given its massive carbon emissions.
Compliance with the agreement would be hard. It would take big investments in energy that does not come from fossil fuel. That’s especially hard when fossil fuel is so inexpensive.
Looking at the Constitutional process, the agreement was never ratified by the Senate, as is required for a treaty. Withdrawal from the agreement is no surprise. President Trump stated he would do so during his campaign.
Climate change is real. The hope was to avoid a tragedy of the commons. There is no other deal to be made on climate change.
Now what?
In other news, these are some of the compliance-related stories that recently caught my attention.
Potential Liability for PE Firms When Preferred Stock Is Redeemed by a Non-Independent Board—Hsu v. ODN by Gail Weinstein & Robert C. Schwenkel, Fried, Frank, Harris, Shriver & Jacobson LLP
The plaintiff contended that, over the two-year period prior to the exercise date of Oak Hill’s redemption right, rather than managing the Company to maximize its long-term value for the benefit of the common stockholders, the directors had operated the Company so that it would be in a position to redeem the maximum amount of Preferred Stock as quickly as possible after the redemption right was exercised.
The Delaware Court of Chancery, giving the benefit of all reasonable inferences to the plaintiff (as required at the pleading stage), declined to dismiss the plaintiff’s claims. [More…]
Ex-Obama Officials Find There’s No Place Like Their Old Law Firms by Elizabeth Olson in the New York Times
The revolving door between government and law firms is decades old, as the newest political overseers arriving in Washington recruit their own legal hands for savvy counsel to prevent — or rescue them from — misdeeds or mistakes. And, as white-collar practices at major law firms have been booming in the wake of the regulatory overhauls that followed the economy’s 2008 crisis, that swinging door typically means a big payday for most lawyers. [More…]
What are you doing about outside business disclosures by Joshua Horn in Securities Compliance Sentinel
The purpose of requiring outside business disclosures is for a firm to make sure that it and its clients know about any conflicts of interest that their brokers may have. For example, the firm would want to know if the broker had a real estate broker’s license because that business may compete with the time the broker can give to her securities investing clients. [More…]
Are Hedge Funds Worth As Much As They Say They Are? by Pierre-Axel Gide in the CLS Blue Sky Blog
I tried to determine whether hedge funds provide investors with diversification benefits and deliver risk-adjusted returns above market returns. As a market benchmark, I used the S&P 500 Index and ran multiple regression analyses of monthly index returns. Doing so resulted in various alphas and betas corresponding to different hedge fund styles (also called tilts). [More…]
Matching Business Models and Processes with Cybercrime Insurance Programs by David Bergenfeld in the D&O Diary
Time and again, insureds seek payment for cybercrime claims only to be denied by their insurers and the courts that review the subsequent lawsuits that are inevitably filed by insureds. As courts strictly interpret cybercrime policies, insureds need to ensure that their cybercrime policies provide adequate coverage for the known risks and perils of their businesses. Such coverage can only be achieved through a diligent review of business models and processes to match them with a proper insurance program. Recently, federal appellate and district courts denied insureds’ claims for cybercrime coverage where the insureds’ insurance program did not match their business models and processes. [More…]
When ‘Political Intelligence’ Meets Insider Trading by Peter Henning in the New York Times’s DealBook
A case involving insider trading charges based on government information dispensed by a “political intelligence” operative raises interesting questions about how some of the tricky rules for proving the offense will be applied when information is leaked from a federal agency rather than a corporation. [More…]