Facebook-Backed Libra Cryptocurrency Receives Regulatory Scrutiny

Libra is a forthcoming cryptocurrency offered by the Libra Association, a Swiss non-profit formed by 28 investors, including Facebook’s subsidiary Calibra, Visa, Mastercard, and Uber. Each investor pledged $10 million to the project. (Murphy & Bond, Financial Times).  Since the announcement of the coin in June, Facebook has been Libra’s principal cheerleader. (Id.)In that time, Libra has faced criticism over regulatory concerns, and even its claim of being a cryptocurrency. Libra is unlike other cryptocurrenciesin that the Libra Association will have authority over the coin. Where other cryptocurrencies have decentralized blockchain ledgers and are not issued by a central authority, the Libra Association will issue Libra and validate Libra-coin transactions. (Canellis, NextWeb).

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Pension Fund Profitability

Pension fund’s assets in the United States amounted to $15.6 million (USD) in 2018, with these assets being bought with the contributions made to the pension plan and for the exclusive purpose of financing pension benefits. (Pension Funds in Figures,OECD). While the total dollar amount of assets and the number of beneficiaries and contributors has risen in both public pensions and private pensions there is a growing concern about these funds’ ability to deliver adequate returns. (Funded Pension Indicators, OECD). Delivering returns on investment to satisfy the pension obligations remains an issue because of the balancing between profit creation and the long-term sustainability of these funds.

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The Rise of Female Board Members: The Status Quo

Despite the increased number of women on corporate boards, it appears companies are not making the necessary changes to cultivate more female leadership. While the make-up of the Fortune-500 companies are becoming more diverse, many questions remain as to whether the composition of boards will have any impact on corporate culture. Over the last decade, the rise in female board membership has been substantial. As of 2023, it is estimated women will fill fifty percent of Fortune 500 board appointments.  (Cassida Hogg, Heidrick & Struggles).  Forty percent of the 462 board seats filled last year went to women, and currently, women account for 22.5 percent of all board members in Fortune 500 companies. Id.  Many have praised companies’ more female centric direction, but significant skepticism remains as the changes don’t directly address companies’ culture.

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SEC Releases Framework for “Investment Contract” Analysis for Cryptocurrencies

The Strategic Hub for Innovation and Financial Technology (“FinHub”) of the Securities and Exchange Commission (“SEC”) released a framework for analyzing whether a contemplated sale of cryptocurrency, or tokens, is an “investment contract.” (FinHub Staff, SEC). The Securities Act of 1933 (“Securities Act”) and the Securities Exchange Act of 1934 (“Exchange Act”) both include investment contracts in their definition of securities. (15 U.S.C. §§ 77b(a)(1); 78c(a)(10)). If a cryptocurrency meets the requirements of an investment contract, it is a security subject to registration and regulation under the Securities Act and Exchange Act. The framework released by the SEC applies existing legal precedent to the cryptocurrency context. (FinHub Staff, SEC).

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BlackRock Calls for Greater Gender Diversity on Director Boards

BlackRock, Inc. (“BlackRock”), the world’s largest asset manager, has called for its portfolio companies to increase their gender diversity on director boards. (Vanessa Fuhrmans, The Wall Street Journal). In a set of proxy voting guidelines posted in February of last year, the global investment company stated that they would “normally expect to see at least two women directors on every board.” Id.Blackstone’s public call-to-arms represents a significant shift in investment firms that, in the past, have only privately urged corporations to expand the role of women on boards of directors. While companies in the U.S. have been slow to respond, many European nations have introduced legislation that mandates gender diversity on corporate boards. This post will highlight Blackrock’s commitment to gender diversity, the emergence of EU legislation establishing gender quotas for director boards and scientific studies that support the increase of women on companies’ director boards. 

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California Becomes the First State in the U.S. to Mandate Gender Diversity on the Board of Directors of Public Companies

In September of 2018, California was the first state in the U.S. to sign into law mandatory gender diversity on boards of public companies listed on a major U.S. stock exchange. (Richard Vernon Smith, Forbes). The California law went into effect at the close of 2019 calendar year. It requires any corporation with shares listed on a major U.S. stock exchange that is incorporated in or with a principal executive office in the state of California to have a minimum of one female on its board of directors. (SB No. 826, California Legislative Information). By the end of 2021, the law will increase the required minimum number of directors to two female directors if the corporation has five or three if the corporation has six or more directors.

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