On July 16, 2010, the CEO and co-founder of Instagram, Kevin Systrom, posted the very first photo to the social media platform, which depicted a golden retriever next to a taco stand. (Olivia Waxman, The New York Times). Within 18 months, Facebook, Inc. purchased Instagram, and nearly 8 years after Instagram’s inception, the co-founders of Instagram, Kevin Systrom and Mike Krieger, announced their resignation from Facebook, Inc. in a New York Times article. (Mike Isaac, The New York Times).
Read MoreWhen a private company decides to “go public”, it does so through an Initial Public Offering (IPO). An IPO is the private company’s first sale of stock on the public market. Benefits of going public can include a permanent and liquid source of capital for the company, and the company can increase their brand and name recognition through broadcasting their corporate narratives, which suggests legitimacy and stability. (Joe Bou-Saba, Forbes). Although the number of domestic companies listed on U.S. stock exchanges increased in the mid-1990’s, that number has since dropped by nearly half. (Editorial Board, Bloomberg; Michael Wursthorn and Gregory Zuckerman, Wall Street Journal). A study by the Center for Research in Security Prices at University of Chicago’s Booth School of Business reported in the Wall Street Journal showed that in 1996 there were over 7,400 companies listed on U.S. stock exchanges, and today that number is less than half. (Michael Wursthorn and Gregory Zuckerman, Wall Street Journal).
Read MoreInitial coin offerings (ICOs) function in two capacities: they are used as a way for companies to raise capital and as investment opportunities for individuals. ICOs are relatively new, with the first ICO occurring in 2013. Initially, ICOs were not regulated by the Securities and Exchange Commission (SEC) and there were no restrictions on who could invest. In July 2017, however, the SEC released an investigative report determining that a particular coin was a security and, therefore, subject to federal securities laws. Despite new regulations and increased SEC scrutiny, ICOs continue to grow.
Read MoreCorporate boards face increasing compliance responsibilities and must consider how best to handle those responsibilities. There are various sources of the increasing burdens and pressures being placed on corporate boards. Among them are the traditional legal duties of due care, good faith, and loyalty placed on directors, with possibly severe consequences if directors fail to fulfill those duties. Included in the duty of care is the especially challenging duty of establishing and monitoring internal controls, the so-called Caremark duty, which lies at the heart of fulfilling the board’s compliance responsibilities.
Read MoreThe Securities and Exchange Commission (SEC) held a roundtable on November 15 to discuss whether the SEC’s current proxy voting rules and procedures should be updated. (Chairman Jay Clayton, SEC Announcement). According to the announcement, the evidence and testimony presented at the roundtable will aid SEC staffers in making their recommendations about what changes should be made. (Andrew Ramonas, Bloomberg Law). The roundtable is scheduled to discuss several topics, including the voting process, retail shareholder participation, shareholder proposals, proxy advisory firms, technology and innovation, and other actions. (Chairman Jay Clayton, SEC Announcement).
Read MoreBlockchain and cryptocurrency are now mainstays in financial markets and initial coin offerings (“ICO’s”) are giving companies and firms a new avenue to raise capital. Within the cryptocurrency market, “stablecoins” offer a unique form of cryptocurrency to investors. Stablecoins are cryptocurrencies pegged to real-world assets such as the dollar (“USD”) or gold. (Oscar Williams-Grut, Business Insider). Breaking from the volatility seen in other cryptocurrency markets, stablecoins are an attempt to combine the benefits of digital transfer offered by cryptocurrency with the stability of mainstream currency. (Oscar Williams-Grut, Business Insider).
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