While publicly-traded companies are coming under greater scrutiny and facing additional requirements to create diversity on their boards of directors (“boards”), private companies continue to skate under the radar on this front. One reason for this is that private companies do not face the same disclosure requirements that public companies do. (Ann Shepherd & Gené Teare, Crunchbase News). Another is that there is little information about the make-up of the boards of most private companies. However, in 2019 three organizations undertook a study of gender diversity of private company boards and built on that study in 2020 looking at both gender and racial and ethnic diversity. . .
Read MoreThe Federal Trade Commission (“FTC”) does not have the capacity to review every eligible merger and acquisition (i.e. with a value of $92 million or more) in thirty days or less because of a recent surge that observers have attributed to the pandemic. (Siri Bulusu, Bloomberg Law). The announcement came as a surprise to companies and their counsel who have come to rely on this convenience for more than forty years. (John Stern, National Law Review). . .
Read MoreIn 2020, investors looked to make a quick buck using novel investment schemes such as driving up the price of “meme-mania” stocks using social media. (Russell Investments, Seeking Alpha). One of the most popular get-rich-quick schemes in 2020 was to invest in special purpose acquisition companies (“SPACs”). Id. SPACs are “blank check” public companies established to use investors’ capital to find and purchase private companies—a process known as a reverse merger—which private companies then become publicly traded. (Scott Deveau, Bloomberg Law; David Stein, Money for the Rest of Us). By May 2021, initial public offerings (individually, an “IPO”) of SPACs raised $100 billion in capital, already matching the total capital raised for SPACs in 2020 and setting a record for capital raised in SPACs in a single year, with over six months remaining in calendar 2021. (Russell Investments, Seeking Alpha; Emily Graffeo, Business Insider). . .
Read MoreSPAC (pronounced “spack”) is a unique type of company that offers radical, but possibly ill-advised, investment opportunities. (John Hyatt, Nasdaq). The letters in the SPAC acronym stand for “special purpose acquisition company.” (Anna-Louise Jackson and Benjamin Curry, Forbes). Many SPACs are also referred to as “blank check” companies. Id. This secondary name “blank check” is fitting given the purpose of a SPAC, which is to operate as a publicly traded company and to raise money despite providing no product or service. . .
Read MoreOn July 9, 2021, President Biden issued an executive order, “Promoting Competition in the American Economy,” which mandates greater scrutiny placed on merger deals throughout multiple sectors. (The White House, Promoting Competition in the American Economy). The order makes clear that the current Administration’s policy is to “enforce the antitrust laws to combat the excessive concentration of industry, the abuses of market power, and the harmful effects of monopoly.” Id. The order establishes a White House Competition Council, led by secretaries of multiple federal agencies, to “provide a coordinated response to overconcentration, monopolization, and unfair competition in or directly affecting the American economy.” Id. The order also encourages all appropriate agencies to vigorously and fairly enforce the Clayton Antitrust Act of 1914. . .
Read MoreSeventy percent of American consumers in 2021 want their favorite companies to make a positive social and environmental impact. (Business Wire). A willingness to socially and environmentally improve society is therefore more than good ethics—it is good business. Beyond consumer sales, many companies raise capital by attracting investments based on their environmental, social, and governance efforts (“ESG”). (James Chen, Investopedia). ESG investing criteria represent the broad non-financial factors investors increasingly apply to their analysis of potential investments. (CFA Institute). Although traditionally ESG standards are not a formal part of financial reporting requirements, ESG is rapidly becoming a commonly recognized investment metric. . .
Read More