boring Friday afternoon legal stuff

  • Not welcome in Canada

    Hedge Funds

    Now Canada Wants Activist Investors To Share With The Rest Of The Class

    If you’re an activist investor your job is to (1) think of an idea for how to make a company’s stock go up, (2) buy stock in the company, (3) convince them to do your idea, and (4) sell high. Step 3 tends to involve lots of attention-seeking – it’s easier to wear a company […]

    / Mar 22, 2013 at 5:20 PM
  • What is a lawyer?


    Rise In Merger Lawsuits Helps Shareholders By Giving Them More Stuff Not To Read

    If you own stock in a company that announces it’s being acquired, and you think the acquisition price undervalues the company, there are three things you can do about it: you can vote down the deal, you can find or propose an alternate deal, or you can sue. No I’m kidding of course you can’t […]

    / Mar 8, 2013 at 6:02 PM
  • I am going exactly nowhere


    Carl Icahn Has Committed To Fight Bill Ackman For At Least The Next Six Months

    Have you had enough Icahn and Ackman and Herbalife yet? Probably, right? Still, I should mention two more things, mostly because I kind of got them wrong this morning. The first thing is that I thought Icahn is long via options, rather than shares, for financing reasons. He sometimes uses this method to avoid HSR […]

    / Feb 15, 2013 at 5:28 PM
  • Oh, also, Elliott got this boat.


    Elliott Associates Winning Battles Against Argentina On Land And Sea

    If you’re a certain kind of dork you will enjoy the hell out of the Argentinian pari passu clause decision out of the Second Circuit today; the opinion is here and here are good things to read from Anna Gelpern and Joseph Cotterrill. In 1994 Argentina issued bonds under New York law that said “The […]

    / Oct 26, 2012 at 6:40 PM
  • Ken Lewis made this face at Merrill but didn't tell anyone about it.


    Banks Win Some, Lose Some In Shareholder Lawsuits

    A surprising percentage of conversations at Dealbreaker HQ go like this: Bess: Can you really sue someone for [thing someone is suing someone else over]? Matt: Anyone can sue anyone for anything. Bess: Did you even go to law school?1 What you don’t learn in law school, though, is that “what the law says” and […]

    / Sep 28, 2012 at 6:40 PM
  • Two things: (1) this really does seem to be Hon. Mr. Justice Briggs, (2) if you want your picture on Dealbreaker, dress up in a red robe, ermine collar & wig and send me a picture and, yeah, it'll probably happen.


    “Everybody’s Doing It” Legal Theory Does Not Protect English Bank Restructurings

    When people talk about financial innovation one of the main things they mean is legal innovation. CDOs, ETFs, MERS, the poison pill – most of the ways to smooth or roughen the path of investment take the form of jamming entities and contracts together in ways they’ve never gone together before. Sort of by definition […]

    / Jul 27, 2012 at 5:03 PM
  • News

    Now Here Are Some Guys Who Knew How To Rip Off A Client

    One aspect of good salesmanship is that you have to offer an attractive proposition not merely to the abstract entity that is your nominal client – El Paso, Italy, Greece – but also to the specific human being who is your contact at that client. Telling a corporate treasurer who is five years from retirement that a trade will have a significantly positive NPV due to huge cash flows in years 11-15 is not always as effective a sales technique as buying him a nice steak and an evening of unclothed entertainment. I suspect, though, that the latter strategy is more highly correlated with whatever you’re selling ending up on the front page/op-ed page/

    Anyway, I definitely admire these guys for this particular con*:

    The SEC alleges that Argyll Investments LLC’s purported stock-collateralized loan business is merely a fraud perpetrated by James T. Miceli and Douglas A. McClain, Jr. to acquire publicly traded stock from corporate officers and directors at a discounted price from market value, separately sell the shares for full market value in order to fund the loan, and use the remaining proceeds from the sale of the collateral for their own personal benefit. Miceli, McClain, and Argyll typically lied to borrowers by explicitly telling them that their collateral would not be sold unless a default occurred. However, since Argyll had no independent source of funds other than the borrowers’ collateral, Argyll often sold the collateral prior to closing the loan and then used the proceeds to fund it.

    Got it? Argyll gave corporate executives margin loans at 50-70% loan-to-value based on the market price of their stock (based on the volume weighted average price over five days leading up to the closing of the loan). They took the stock as “collateral.” They then trousered the stock and sold it for, y’know, 100% of the market value, with 50-70% of that funding the loan and the remaining 30-50% funding miscellaneous expenses that presumably included unclothed entertainment for themselves. The loans had three-year terms and were not prepayable for 12-18 months, so the expected life of the scam was at least 12 months (but see below).

    / Mar 16, 2012 at 5:05 PM
  • News

    Wynn’s Board Showed Surprising Modesty About What A Share Of Wynn Is Worth

    Possibly the best thing about the Wynn-Okada saga is the payment to Okada in exchange for poofing his shares away. Recall that Wynn’s charter lets the board disappear the shares. But they can’t just disappear them for free – that would be unfair. They have to pay a fair price for them: “Redemption Price” shall […]

    / Feb 24, 2012 at 5:21 PM
  • What does he have planned for that marker?


    Wynn Was Shocked, Shocked To Find Its Bribe-Loving Director Was Paying Bribes

    There’s a possibly true anecdote about Greek uncompetitiveness that goes like this: “An online store is more complicated than a regular store basically because of the way payments are carried out,” explained Fotis Antonopoulos, one of the co-founders of, which sells olive oil-based products such as cosmetics, mostly to foreign markets. … Antonopoulos and […]

    / Feb 24, 2012 at 3:01 PM
  • News

    If The SEC Really Wanted To Get Tough On Securities Fraud It Would Have Added Some Minor Inconveniences To Its Multi-Hundred-Million-Dollar Fines

    It’s clear that I am a terrible person because I continue to be unable to get all that excited about banks that commit fraud. And the big thing today is that the SEC doesn’t put banks out of business just for committing fraud, which I think is rather sporting of them but lots of people […]

    / Feb 3, 2012 at 6:44 PM
  • News

    Maybe The SEC Decided To Throw A Trial So It Can Go Back To Settling Everything

    I try to be honest when telling you that a court complaint or SEC filing or research paper is a fun read, just in case you might go read it, though of course there’s no accounting for tastes and I may enjoy many things that you don’t.* And that’s okay. In any case I doubt […]

    / Dec 16, 2011 at 5:42 PM
  • News

    And Now, Blech, Mortgage Lawsuits

    It’s difficult to keep track of all the things that all the people are suing all the banks for regarding mortgages. A place to start is by remembering that banks stood in the middle of originating loans to people who didn’t pay them and selling them to people who are now sad that they didn’t […]

    / Dec 2, 2011 at 2:55 PM
  • M&A, News

    Everybody Wins With The Kinder Morgan / El Paso Merger

    Here’s a thing that you probably know: acquirers pay a premium to do acquisitions. That tends to be why the target sells, with some exceptions. So it is no surprise that Kinder Morgan is paying a premium to buy El Paso. And, when they announced the merger last month, they talked up that premium pretty […]

    / Nov 11, 2011 at 5:35 PM
  • News

    If Only MF Global Had Spirited Away Some Customer Money To Fund Its European Trades

    DealBook today dug up some neat stuff on MF Global that, if you let it, will make your head hurt and fuel your conspiracy theories about Goldman alumni: Months before MF Global teetered on the brink, federal regulators were seeking to rein in the types of risky trades that contributed to the firm’s collapse. But […]

    / Nov 4, 2011 at 1:50 PM
  • News

    Court Gives SEC an F for Proxy-Access Job Not So Well Done

    A nice thing about being a director of a U.S. public company is that, if you’re nominated for re-election, you can’t lose. Not, like, “incumbents have an advantage”: you actually can’t lose, and as long as one share votes for you you’ll be re-elected even if everyone else votes against you. (That’s been changing a […]

    / Jul 22, 2011 at 4:05 PM

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