BEYOND A MERE TECHNICALITY: IMPACT OF NEW SEC GUIDANCE REGARDING SCHEDULE 13G ELIGIBILITY
Mihaela Esanu
Regulation by the U.S. Securities and Exchange Commission (“SEC”) shapes interactions between shareholders and companies’ management. One of the most influential tools at the SEC’s disposal is its oversight of reports regarding ownership interests on Schedule 13D and 13G. Although institutional investors have traditionally relied on the streamlined Schedule 13G, the new guidance issued by the SEC makes it harder for investors to remain eligible for 13G filing. Expanding the scope of 13G-disqualifying actions, the new guidance has a tangible impact on all actors in the corporate sphere, including shareholders, Board directors and officers, proxy advisory firms, and activists. Advocates of the new guidance portray it as a common-sense interpretation of longstanding rules, while critics point to its inadvertent consequences such as the chilling of engagement and the rise in influence of proxy advisors. After conducting a multi-stakeholder-centric analysis of the new guidance, this piece will consider how the new guidance may result in underinvestments in engagement activities. The piece also puts the new guidance in the context of other SEC policy changes and takes a forward-looking approach, considering the adaptive mechanisms employed by capital markets participants.
THE RISE OF THE PRACQUISITION: WHY BIG TECH IS AVOIDING M&A
Annabelle Diana Hutchinson
In a pracquisition, an acquiror hires a target’s key talent and licenses its intellectual property, effectively gaining the target’s core value without formally acquiring it. Since it is “practically an acquisition,” a pracquisition serves as a structural alternative to traditional M&A structures and promotes deal efficiency while also providing a workaround to antitrust scrutiny. Companies engaging in the practice achieve similar goals as traditional M&A without the regulatory roadblocks and costs typically associated with a normal acquisition, representing a shift in dealmaking strategy with market-wide ramifications for companies, investors, and regulators.
Faculty Features Column
PROFESSOR ROBERTO TALLARITA
Alexander Siegenthaler
What follows is the result of an hour-long conversation with Roberto Tallarita, Assistant Professor of Law at Harvard Law School. We discussed his work, from current trends in corporate governance to an application of legal philosophy to contemporary debates. We further discussed recent events in Delaware and Texas, as well as Professor Tallarita’s work in the classroom. This conversation has been added for clarity and length, with citations added to assist the reader.