ile annual report 2009-2010

institute for

law & economics.....

A Joint Research Center of the Law School, the Wharton School, and the Department of Economics in the School of Arts and Sciences at the University of Pennsylvania

Annual Report 2009–2010

Message from the Co-Chairs 1Board of Advisors 2Message from the Dean 4Message from the Co-Directors 5Roundtable Programs 6Corporate Roundtable, Spring 2010 8Corporate Roundtable, Fall 2009 10Off the Record, Spring 2009 12Corporate Roundtable, Spring 2009 12Corporate Roundtable, Fall 2008 14Corporate Roundtable, Spring 2008 14Panel Programs 16Chancery Court Programs, Spring 2010 18

Insights from Practice 20Delaware Chancery Program 20Lectures 22Law and Entrepreneurship 24Distinguished Jurist 28Past Lectures 30Academic Events 32Penn/NYU Conference, Spring 2010 34NYU/Penn Conference, Spring 2009 34ILE/Wharton Finance Seminars 36Publications and Papers 38Associate Faculty 40Institute Investors 49

FOUNDED IN 1980, the Institute for Law and Economics at the University of Pennsylvania has an ambitious agenda that is timelier than ever. The study of law and economics remains the most rapidly growing movement in legal scholarship and jurisprudence. Under the sponsorship of the Law School, the Wharton School, and the Department of Economics in Penn’s School of Arts and Sciences, the Institute has played a leading role in this expanding field. Cross-disciplinary research, the cornerstone of ILE, seeks to influence the national policy debate by analyzing the impact of law on the global economy, spotlighting the significant role that economics plays in fashioning legal policy. Our innovative roundtables and conferences, launched in 1985, complement these goals by provoking in-depth and frequently groundbreaking examinations of critical issues. These and other programs highlighted in this Annual Report have helped the Institute stay on the leading edge of this cross-discipline. The Institute for Law and Economics has unique advantages. We draw on the research and teaching strengths of the Law School, the Wharton School, and the Department of Economics. Our geographic location is optimal, allowing us to bring together participants from Washington and New York for full-day meetings and still get everyone home in time for dinner. We have been able to call on the expertise of Penn Law School alumni who occupy key positions in law, business, and government. And, critically, we have an extraordinarily distinguished cadre of board members and sponsors who are willing to give of their time and expertise to make our programming a success. In each area, from our public lectures and panels through our closed-door roundtables to our more academically- oriented faculty workshops, we are driven by the same mission: to use the tools of economics to understand the law. In a world in which complex legal rules govern economic relationships, the tools of economics provide a way of asking whether the law creates appropriate incentives to encourage actors to maximize social welfare. Funding for ILE comes from a diverse group of corporations, law firms, foundations, and individuals who endorse our work each year. Over the past decade, the Institute has more than tripled its donor base to provide ongoing support for the programs discussed in this Annual Report. A list of Institute Investors for 2009–2010 appears on page 49.

Cover CaptionsTop: Joseph D. Gatto, Barclays Capital Americas. Left: Hon. Leo E. Strine, Jr., Delaware Court of Chancery. Right: Roy J. Katzovicz, Pershing Square Capital Management, L.P.

Message from the Co-Chairsfor almost three decades, penn’s institute for law and economics has contributed to scholarship, policy, and practice on relevant issues of law and economics that affect our country’s businesses and financial institutions.THE INSTITUTE’S PROGRAMS have become increasingly relevant and important in this challenging economic climate, focusing on the issues that the academic, legal, and business communities care about. Today the Institute enjoys an outstanding international reputation for the excellence of its programs, where leaders in business, financial management,

legal practice, and academic scholarship candidly discuss the intersec-tion of theory and practice on a host of significant issues. Your participation in these programs is a vital component of their success. On behalf of the Institute’s Board of Advisors, we want to express our gratitude to everyone who has helped the Institute during this past year, whether through financial contributions or by participation in ILE programs. One of the foremost goals of the Institute is to broaden and diversify our foundation, and once again we have realized that goal. We are delighted to report some superb additions to our Board of Advisors during the past year. We are pleased to welcome the following new members: Louis J. Bevilacqua (Cadwalader, Wickersham

& Taft LLP); Stephen Fraidin (Kirkland & Ellis LLP); Dennis J. Friedman (Gibson, Dunn & Crutcher LLP); Mark I. Greene (Cravath, Swaine & Moore LLP); Brendan R. Kalb (AQR Capital Management, LLC); Jeffrey D. Marell (Paul, Weiss, Rifkind, Wharton & Garrison LLP); Allan N. Rauch (Bed Bath & Beyond); and one returning member, Joel E. Friedlander (Bouchard Margules & Friedlander). These accomplished individuals will greatly enhance the work of the Institute and broaden the composition of our Board. All of the members of our Board give graciously to the Institute, not just financially but also of their time and expertise, and we are very grateful for their contributions. Very special thanks must be given to ILE Benefactors Bob Friedman, Paul G. Haaga, Jr., and Skadden, Arps, Slate, Meagher & Flom LLP (through Eric Friedman). Their extraordinary level of financial support enables the Institute to continue to lead the field, and we want to express our sincere appreciation to each of them. Jill Fisch, Ed Rock, and Michael Wachter have continued to be truly outstanding as co-directors of the Institute. We look forward to welcoming Bill Bratton as a co-director in the upcoming year, as Ed Rock will be stepping down. The co-directors’ dedication to all aspects of the Institute’s work and their ability to come up with timely programs and attract the ideal participants to make every program an unqualified success are why ILE is world-renowned as the forum for interesting dialogue on topical issues for corporations and their financial and legal advisors.

Charles “Casey” CogutSimpson Thacher & Bartlett LLP

Joseph B. FrumkinSullivan & Cromwell LLP

September 2010

institute for law and economics 1 message from the co-chairs

institute for law and economics 2 board of advisors

Board of advisors

Barry M. AbelsonPepper Hamilton LLPPhiladelphia, PA

James H. AggerChair, 1994–2001Retired Senior Vice President, General Counsel and SecretaryAir Products and Chemicals, Inc.Allentown, PA

Richard B. AldridgeMorgan Lewis & Bockius LLPPhiladelphia, PA

William D. Anderson, Jr.Managing DirectorGoldman, Sachs & Co.New York, NY

Marshall B. BabsonHughes Hubbard & Reed LLPNew York, NY

Fred BlumeChairman EmeritusBlank Rome LLPPhiladelphia, PA

Charles I. CogutCo-Chair, 2008–Simpson Thacher & Bartlett LLPNew York, NY

Isaac D. CorréSenior Managing DirectorEton Park Capital ManagementNew York, NY

Pamela CravenChief Administrative OfficerAvaya CommunicationsBasking Ridge, NJ

Richard D’AvinoV.P. Taxes-GE Capital and NBC UniversalGeneral Electric CompanyStamford, CT

Joel E. FriedlanderBouchard, Margules & FriedlanderWilmington, DE

Robert L. FriedmanChair, 2001–2007Senior Managing Director and Chief Legal OfficerThe Blackstone Group L.P.New York, NY

Joseph B. FrumkinCo-Chair, 2008–Sullivan & Cromwell LLPNew York, NY

Joseph D. GattoVice ChairmanLehman Brothers Inc.New York, NY

Joseph GlattPrincipal CounselApollo Capital Management, L.P.New York, NY

Perry GolkinMemberKohlberg Kravis Roberts & Co.New York, NY

John G. Harkins, Jr.Chair, 1980–1990Harkins Cunningham LLPPhiladelphia, PA

Leon C. Holt, Jr.Retired Vice Chairman and Chief Administrative OfficerAir Products and Chemicals, Inc.Allentown, PA

William B. JohnsonChairman EmeritusWhitman CorporationChicago, IL

Stephen J. JonesVice President, General Counsel and SecretaryAir Products and Chemicals, Inc.Allentown, PA

Cynthia B. KaneSpecial Assistant to the Secretary of StateDelaware Department of StateWilmington, DE

Roy J. KatzoviczGeneral CounselPershing Square Capital Management, L.P.New York, NY

Bruce N. KuhlikExecutive Vice President and General CounselMerck & Co., Inc.Whitehouse Station, NJ

Mark LebovitchBernstein Litowitz Berger & Grossmann LLPNew York, NY

Paul S. LevyFounderJLL PartnersNew York, NY

Robert A. LonerganExecutive Vice President, General Counsel and Corporate SecretaryRohm and Haas CompanyPhiladelphia, PA

Simon M. LorneVice Chairman and Chief Legal OfficerMillennium Management, LLCNew York, NY

Michael E. LubowitzWeil, Gotshal & Manges LLPNew York, NY

J. Anthony MessinaBuchanan Ingersoll & Rooney PCPhiladelphia, PA

Alan MillerCo-ChairmanInnisfree M&A IncorporatedNew York, NY

G. Daniel O’DonnellDechert LLPPhiladelphia, PA

James E. OdellGeneral Counsel, The AmericasUBS Investment Bank

New York, NY

James A. OunsworthManaging DirectorThe Musser Consulting GroupWayne, PA

Morton A. PierceDewey & LeBoeuf LLPNew York, NY

Martha L. ReesVice President and Assistant General CounselE. I. du Pont de Nemours & Company, Inc.Wilmington, DE

Myron J. ResnickRetired Senior Vice President and Chief Investment OfficerAllstate Insurance CompanyNorthbrook, IL

Robert H. RockChairman and Publisher Directors & Boards Philadelphia, PA

Gerald RosenfeldDeputy ChairmanRothschild North AmericaNew York, NY

Peter G. SamuelsProskauer Rose LLPNew York, NY

John F. SchmutzChair, 1990–1994Retired Senior Vice President and General CounselE. I. du Pont de Nemours & Company, Inc.Wilmington, DE

Howard L. ShecterOrrick, Herrington & Sutcliffe LLPNew York, NY

Robert C. SheehanExecutive PartnerSkadden, Arps, Slate, Meagher & Flom LLPNew York, NY

Victoria E. SilbeySenior Vice President–Legal and General CounselSunGard Data Systems Inc.

Wayne, PA

David M. SilkWachtell, Lipton, Rosen & KatzNew York, NY

Bruce L. SilversteinYoung Conaway Stargatt & Taylor, LLP Wilmington, DE

A. Gilchrist Sparks IIIMorris, Nichols, Arsht & Tunnell LLPWilmington, DE

Hon. Leo E. Strine, Jr.Vice ChancellorDelaware Court of ChanceryWilmington, DE

Nancy Straus SundheimSenior Vice President, General Counsel and SecretaryUnisys CorporationBlue Bell, PA

Jere R. ThomsonJones DayNew York, NY

Hon. E. Norman VeaseyChief Justice, Supreme Court of Delaware, 1992–2004Weil, Gotshal & Manges LLPNew York, NY, and Wilmington, DE

Marc WeingartenSchulte Roth & ZabelNew York, NY

Gregory P. WilliamsRichards, Layton & Finger, P.A.Wilmington, DE

Donald J. WolfePotter Anderson & Corroon LLPWilmington, DE

James H. AggerChair, 1994–2001 Retired Senior Vice President, General Counsel and Secretary Air Products and Chemicals, Inc. Allentown, PA

Richard B. AldridgeMorgan Lewis & Bockius LLP Philadelphia, PA

William D. Anderson, Jr.Managing DirectorGoldman, Sachs & Co.New York, NY

Marshall B. BabsonHughes Hubbard & Reed LLP New York, NY

Louis J. BevilacquaCadwalader, Wickersham & Taft LLPNew York, NY

Fred BlumeChairman EmeritusBlank Rome LLPPhiladelphia, PA

Daniel H. BurchChairman & CEOMacKenzie Partners, Inc.New York, NY

Charles I. CogutCo-Chair, 2008–Simpson Thacher & Bartlett LLPNew York, NY

Isaac D. CorréSenior Managing DirectorEton Park Capital ManagementNew York, NY

Richard B. FordCT, a Wolters Kluwer BusinessNew York, NY

Stephen FraidinKirkland & Ellis LLPNew York, NY

Joel E. FriedlanderBouchard Margules & FriedlanderWilmington, DE

Dennis J. FriedmanGibson, Dunn & Crutcher LLPNew York, NY

Eric J. FriedmanExecutive PartnerSkadden, Arps, Slate, Meagher & Flom LLPNew York, NY

Robert L. FriedmanChair, 2001–2007Senior Managing Director and Chief Legal OfficerThe Blackstone Group L.P.New York, NY

Joseph B. FrumkinCo-Chair, 2008–Sullivan & Cromwell LLPNew York, NY

Joseph D. GattoChairman of Investment BankingBarclays Capital AmericasNew York, NY

Joseph D. GlattGeneral CounselApollo Capital Management, L.P.New York, NY

Perry GolkinKohlberg Kravis Roberts & Co.New York, NY

Stuart M. GrantGrant & Eisenhofer P.A.Wilmington, DE

Mark I. GreeneCravath, Swaine & Moore LLPNew York, NY

Paul G. Haaga, Jr.Vice ChairmanCapital Research and Management CompanyLos Angeles, CA

John G. Harkins, Jr.Chair, 1980–1990Harkins Cunningham LLPPhiladelphia, PA

Leon C. Holt, Jr.Retired Vice Chairman and Chief Administrative OfficerAir Products and Chemicals, Inc.Allentown, PA

William B. JohnsonChairman EmeritusWhitman CorporationChicago, IL

Brendan R. KalbCo-General CounselAQR Capital Management, LLCGreenwich, CT

Cynthia B. KaneSpecial Assistant to the Secretary of StateDelaware Department of StateWilmington, DE

Roy J. KatzoviczChief Legal OfficerPershing Square Capital Management, L.P.New York, NY

Roger KimmelVice ChairmanRothschild Inc.New York, NY

Bruce N. KuhlikExecutive Vice President and General CounselMerck & Co., Inc.Whitehouse Station, NJ

Mark LebovitchBernstein Litowitz Berger & Grossmann LLPNew York, NY

Simon M. LorneVice Chairman and Chief Legal OfficerMillennium Management LLC New York, NY

Jeffrey D. MarellPaul, Weiss, Rifkind, Wharton & Garrison LLPNew York, NY

Alan MillerCo-ChairmanInnisfree M&A IncorporatedNew York, NY

G. Daniel O’DonnellDechert LLPPhiladelphia, PA

James E. OdellManaging Director and Head of LegalUBS Investment BankNew York, NY

James A. OunsworthManaging PartnerThe SL Consulting GroupPhiladelphia, PA

Morton A. PierceDewey & LeBoeuf LLPNew York, NY

Allan N. RauchVice President— Legal and General CounselBed Bath & BeyondUnion, NJ

Martha L. ReesVice President and Assistant General CounselE. I. du Pont de Nemours & Company, Inc.Wilmington, DE

Myron J. ResnickRetired Senior Vice President and Chief Investment OfficerAllstate Insurance CompanyNorthbrook, IL

Peter G. SamuelsProskauer Rose LLPNew York, NY

Victoria E. SilbeySenior Vice President— Legal and General CounselSunGard Data Systems Inc.Wayne, PA

David M. SilkWachtell, Lipton, Rosen & KatzNew York, NY

Bruce L. SilversteinYoung Conaway Stargatt & Taylor, LLP Wilmington, DE

A. Gilchrist Sparks IIIMorris, Nichols, Arsht & Tunnell LLPWilmington, DE

Heidi StamManaging Director and General CounselVanguardWayne, PA

Hon. Leo E. Strine, Jr.Vice ChancellorDelaware Court of ChanceryWilmington, DE

Hon. E. Norman VeaseyChief Justice, Supreme Court of Delaware, 1992–2004Weil, Gotshal & Manges LLPNew York, NY, and Wilmington, DE

Marc WeingartenSchulte Roth & Zabel LLPNew York, NY

Gregory P. WilliamsRichards, Layton & Finger, P.A.Wilmington, DE

Donald J. Wolfe, Jr.Potter Anderson & Corroon LLPWilmington, DE

Board of Advisors

institute for law and economics 3 board of advisors

1 2 3

8

17

9 1110

75 6

4

18 2019 21

22 23 2524 26

12

161413 15

1 Lee Holt and Jim Agger

2 Richard Aldridge

3 Bill Anderson

4 Marshall Babson

5 Isaac Corré

6 Joel Friedlander

7 Bob Friedman

8 Eric Friedman

9 Joe Gatto

10 Perry Golkin

11 John Harkins

12 Cynthia Kane

13 Roy Katzovicz

14 Sy Lorne

15 Alan Miller

16 Jim Odell

17 Mort Pierce

18 Martha Rees

19 Victoria Silbey

20 David Silk

21 Bruce Silverstein

22 Gil Sparks

23 Heidi Stam

24 Marc Weingarten

25 Greg Williams

26 Don Wolfe

institute for law and economics 4 message from the dean

Message from the Deanfor over twenty years, the institute for law and economics has successfully demonstrated the benefits of a cross- disciplinary perspective. ITS PROGRAMS PROVIDE a model for how to build bridges between disciplines by creating ties between schools, between faculty members, between students, and between experts in the field from around the world. ILE combines Penn’s greatest strengths in the Law School, the Wharton School, and the Department of Economics to focus on complex questions that concern all of these fields. The Institute proves that when you bring the right people—judges, deal-makers, regulators, business leaders, lawyers, bankers, policymakers, academics, and more—to convene outside of their own niches, remarkably original insights are generated. As our world grows more complex every day, the topics the Institute addresses are both exciting and relevant. It is no longer enough to approach complicated questions such as the reform agenda, the role of shareholder activism, and

the governance of mutual funds from solely a legal, economic, or business perspective. Indeed, no significant business issue can be addressed without paying attention to the underlying economic trends and legal regulations. All of ILE’s participants contribute to and benefit from the profound understanding such analysis affords. In addition to its unique focus, another of the Institute’s strengths is the variety of programs it offers. The roundtables—ILE’s signature events—bring together distinguished members of the bar, judiciary, government, business world, and academia for open discussion and intellec-tual exploration. ILE’s public lectures by leading jurists, executives, and entrepreneurs attract participants from all sectors of the University and from the wider community. During the past year the outstanding talks, panels, and conferences organized by the Institute covered a wide range of topics and programs, from corporate finance and corporate governance to private

equity, hedge funds, and mutual funds, as well as large-scale entrepreneurship and management. Since my cross-disciplinary vision for the Law School and the purposes of the Institute for Law and Economics are so similar, it is personally gratifying to me that the Institute is generously supported by contributors who understand the importance of what we do and the unique position the Institute holds. Many of these contributors also serve as members of the Institute’s Board of Advisors, helping to plan the direction and focus of the programs and lending their expertise as panelists and commentators for Institute events. ILE’s extraordinary co-chairs, Casey Cogut and Joe Frumkin, have my particular thanks for their many exceptional contributions. Like all who serve as advisors for ILE, Casey and Joe contribute their very valuable time and expertise, in addition to their numerous contacts in the legal and business communities. ILE has benefited substantially from their leadership. I must also thank the three eminent professors who lead the Institute for Law and Economics—Michael Wachter, Ed Rock, and Jill Fisch. It is because of their commitment and enthusiasm that ILE ranks among the premier institutions of its kind. I extend the deepest appreciation to all ILE supporters and participants for their commitment and investment during the past year. With the proper support and sponsorship, the Institute for Law and Economics has limitless potential for growth and expansion in the future. We welcome others to join in backing and participating in this extremely worthwhile endeavor.

Michael A. Fitts, Dean and Bernard G. Segal Professor of Law, University of Pennsylvania Law School

September 2010

institute for law and economics 5 message from the co-directors

Message from the Co-Directorsour programs this year explored some of the most critical issues of the day. OUR FALL CORPORATE ROUNDTABLE explored reasons for and against shareholder empowerment. We also examined the various reform agendas for the financial system and how they would affect this area of corporate governance. In the spring, we looked at the regulation of mutual funds as well as funds’ internal corporate governance. At the fall Insights from Practice program, we showcased dealmakers and asked how their practice had been affected by the financial crisis. And in our spring Chancery Court programs, we looked back on two key decisions of the Delaware courts, Paramount Communications v. Time and NCS v. Omnicare, to revisit the arguments and to appraise their impact. Over the course of the year, we presented two fascinating Law and Entrepreneurship lectures. In the fall, J.P. Suarez, Senior Vice President and General Counsel of Wal-Mart Stores International Division, spoke to an overflowing audience about maintaining an entrepreneurial spirit in one of the largest corporations in the world. In the spring, Joseph D. Gatto, Chairman of Investment Banking for the Americas for Barclays Capital, spoke about managing through the recent financial

crisis. For our Distinguished Jurist lecture, Hon. Lewis A. Kaplan of the Southern District of New York spoke on “Private Securities Litigation—Time for a Fresh Start?” Our joint programs with Wharton’s Finance Department flourished. The Law and Finance series, a regular part of the Finance workshop schedule, continued with presentations by Howell Jackson (James S. Reid, Jr. Professor of Law, Harvard Law School) and Anil Kashyap (Edward Eagle

Brown Professor of Economics and Finance, The University of Chicago Booth School of Business). In February, we hosted the sixth annual Penn/NYU Law and Finance Conference, a joint venture of the Institute for Law and Economics, the Wharton Financial Institutions Center, and the Pollack Center for Law and Business at New York University. The Institute’s greatest strength lies in the quality of our supporters and their active, enthusiastic participation in our programs. Our board members and sponsors make our programs possible, both as key participants and with their financial support. We would particularly like to acknowledge our board chairs, Casey Cogut of Simpson Thacher & Bartlett LLP and Joe Frumkin of Sullivan & Cromwell LLP, for their dedicated and enthusiastic work over the past year. We are delighted to have added seven new members to the board, and we welcome them: Louis J. Bevilacqua (Cadwalader, Wickersham & Taft LLP); Stephen Fraidin (Kirkland & Ellis LLP); Dennis J. Friedman (Gibson, Dunn & Crutcher LLP); Mark I. Greene (Cravath, Swaine & Moore LLP); Brendan R. Kalb (AQR Capital Management, LLC); Jeffrey D. Marell (Paul, Weiss, Rifkind, Wharton & Garrison LLP); and Allan N. Rauch (Bed Bath & Beyond). We also welcome back one returning member, Joel E. Friedlander (Bouchard Margules & Friedlander). There are changes in the ILE leadership team as well. After twelve years as co-director, Ed Rock is stepping down, although he will remain an active participant. The Institute welcomes William W. Bratton as co-director beginning in the fall of 2010. Bill comes to us from Georgetown University Law Center, where he was the Peter P. Weidenbruch, Jr. Professor of Business Law. He has been an active participant in ILE programs over the years, and we are privileged to have him as a partner moving forward. We extend our heartfelt thanks to all of our supporters for bringing your perspective, your ideas, your experience, and your expertise to all that we do. Your participation is necessary to realize the Institute’s purpose and objectives, and it makes our job as Institute directors immensely satisfying and worthwhile.

Jill E. Fisch, Co-Director, Institute for Law and EconomicsPerry Golkin Professor of Law

Edward B. Rock, Co-Director, Institute for Law and EconomicsSaul A. Fox Distinguished Professor of Business Law

Michael L. Wachter, Co-Director, Institute for Law and EconomicsWilliam B. Johnson Professor of Law and Economics

September 2010

institute for law and economics 7 roundtable programs

OVER THE YEARS, the Institute has sponsored roundtables on a broad range of topics—including labor law and bankruptcy, as well as corporate law, governance, and finance—engaging the interest and participation not only of scholars but also of leaders in the business and public sectors. The high caliber of the participants guarantees that each affair is intense and informative. ILE’s longstanding off-the-record policy for the round-tables is often the impetus for an energetic and wide-ranging exchange of ideas among some of the nation’s most accomplished scholars, attorneys, and business people.

Roundtable Programs at the heart of the institute’s work is the roundtable series, which brings together members of the institute’s associate faculty and other academics with corporate executives, practicing attorneys, judges, public policy-makers, and students. each roundtable provides a forum for lively discussion of current issues that emerge from the research and teaching of the institute.


Corporate Roundtable9 April 2010

WelcomeMichael A. fitts, Dean and Bernard G. Segal Professor of Law, University of Pennsylvania Law School

Morning SessionRethinking the Regulation of Securities IntermediariesJill e. fisch, Perry Golkin Professor of Law, University of Pennsylvania Law School

Commentatorstamar frankel, Michaels Faculty Research Scholar and Professor of Law, Boston University School of Laweric D. roiter, Former General Counsel, Fidelity Management & Research

Mutual Fund Performance Advertising: Inherently and Materially Misleading?Alan r. palmiter, Professor of Law, Wake Forest University School of LawAhmed taha, Professor of Law, Wake Forest University School of Law

CommentatorsDonald G. Bennyhoff, Senior Investment Analyst, Vanguarderic Zitzewitz, Associate Professor of Economics, Dartmouth College

Afternoon SessionPanel on the Governance of Mutual Funds

ModeratorsJill e. fisch, Perry Golkin Professor of Law, University of Pennsylvania Law SchoolMichael l. Wachter, William B. Johnson Professor of Law and Economics, University of Pennsylvania Law School

PanelistsJohn e. Baumgardner, Jr., Sullivan & Cromwell LLPedwin J. elton, Nomura Professor of Finance, NYU Stern School of Businessscott Goebel, Senior Vice President and General Counsel, Fidelity Management & Research Companysusan B. Kerley, Strategic Management Advisors, LLCryan leggio, Mutual Fund Analyst, Morningstar, Inc.Jeffrey s. puretz, Dechert LLP

Rethinking the Regulation of Securities IntermediariesJill E. Fisch, Perry Golkin Professor of Law, University of Pennsylvania Law School

The author argues that existing regulation of mutual funds has serious shortcomings. In particular, the Investment Company Act, which is based primarily on principles of corporate governance and fiduciary duties, fails to support and, in some cases impedes, market forces. Existing evidence suggests that retail investing behavior and the dominance of sales agents with competing financial incentives further weakens market discipline. As a solution, the author proposes that funds should be treated primarily as financial products rather than corporations and, correspondingly, investors should be treated primarily as consumers rather than corporate shareholders. To implement this approach, the author proposes the creation of a new federal agency that would develop standardized financial products coupled with corresponding disclosure principles. Sellers of retail products would be required either to conform their products to these standards or to explain material differences. The goal is to enhance market discipline while making retail funds less complicated and more understandable for individual investors.

Mutual Fund Performance Advertising: Inherently and Materially Misleading?Alan R. Palmiter, Professor of Law, Wake Forest University School of LawAhmed Taha, Professor of Law, Wake Forest University School of Law

Mutual funds are a mainstay of our national savings and retirement systems. Their effectiveness as investment vehicles is critical to our national financial well-being. With individual investors largely responsible for deciding how to allocate their money among different mutual funds, the question of how this allocation occurs is central to the functioning of the mutual fund market. The most important factor used by investors (and their advisers) in choosing among mutual funds is the past performance of the funds. Fund investors chase returns. Yet the consistent findings of academic studies—with the evidence growing stronger over time—is that return chasing is a fool’s game. Strong past returns, except those arising from lower fund costs, do not persist over time. Nonetheless, mutual fund companies advertise past performance—in fact, most fund advertising refers to past returns (nominal and risk-adjusted). No fund companies advertise low performance. Performance advertisements are especially effective in attracting fund flow. Advertised funds (with high past performance) garner significantly more new investment dollars than nonadvertised funds, even though advertised funds tend to later under-perform their benchmarks. The authors assert that the current regulation of mutual fund performance advertising is inadequate. Current performance advertisements, as currently regulated, are inherently and materially misleading. By implying that past performance will continue—the clear assumption of reasonable investors—mutual fund companies are engaged in securities deception. Advertising of past performance is misleading since it implies that past returns will persist, despite strong evidence to the contrary. Past performance data is highly material to investors (and their advisers)—that is, there is a substantial likelihood that fund investors view the information as important in their investment decision. And the current SEC-mandated warnings do not effectively “bespeak caution.”


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6 Front row: Perry Golkin, Kohlberg Kravis Roberts & Co.; Jeffrey S. Puretz, Dechert LLP; Edwin J. Elton, Stern School of Business, New York University. Middle row: Gérard Hertig, Swiss Institute of Technology; Eric Zitzewitz, Dartmouth College; Matthew R. Clark, Morris, Nichols, Arsht & Tunnell LLP; Jill E. Fisch, University of Pennsylvania Law School; Donald G. Bennyhoff, Vanguard; Randall S. Thomas, Vanderbilt University Law School; Sarah E. Cogan, Simpson Thacher & Bartlett LLP; Glenn Booraem, Vanguard; William W. Bratton, Georgetown University Law Center. Back row: Mary K. Stokes, Blank Rome LLP; William A. Birdthistle, Chicago-Kent College of Law, Illinois Institute of Technology; Talyana T. Bromberg, Grant & Eisenhofer P.A.

4 Front row: John E. Baumgard-ner, Jr., Sullivan & Cromwell LLP; Scott Goebel, Fidelity Management & Research Company; David M. Silk, Wachtell, Lipton, Rosen & Katz. Back row: Martin S. Lessner, Young Conaway Stargatt & Taylor, LLP; Tamar Frankel, Boston University School of Law; Alan R. Palmiter, Wake Forest School of Law; Eric D. Roiter, Boston University School of Law. 5 Edwin J. Elton, Stern School of Business, New York University.

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1 Sarah E. Cogan, SimpsonThacher & Bartlett LLP.

2 Front row: Scott Goebel, Fidelity Management & Research Company; David M. Silk, Wachtell, Lipton, Rosen & Katz; Hon. Myron T. Steele, Supreme Court of Delaware. Back row: Martin S. Lessner, Young Conaway Stargatt & Taylor, LLP; Tamar Frankel, Boston University School of Law; Alan R. Palmiter, Wake Forest School of Law; Eric D. Roiter, Boston University School of Law. 3 Susan B. Kerley, Strategic Management Advisors, LLC.

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Corporate Roundtable11 DeceMBer 2009

Embattled CEOsMarcel Kahan, George T. Lowy Professor of Law, New York University School of LawEdward Rock, Saul A. Fox Distinguished Professor of Business Law, University of Pennsylvania Law School

The authors argue that chief executive officers of publicly-held corporations in the United States are losing power to their boards of directors and to their shareholders. This loss of power is recent (say, since 2000) and gradual, but nevertheless represents a significant move away from the imperial CEO who was surrounded by a handpicked board and lethargic shareholders. After discussing the concept of power and its dimensions, we document the causes and symptoms of the decline in CEO power in several areas: share ownership composition and shareholder activism; governance rules and the board response to shareholder activism; regulatory changes related to shareholder voting; changes in the board of directors; and executive compensation. The authors argue that this decline in CEO power represents a long-term trend, rather than a temporary response to economic and political conditions. The decline in CEO power has several important implications, including implications with respect to the possibility of a regulatory backlash against certain newly empowered shareholder groups, future development in Delaware’s corporate law, the type of persons who will serve on corporate boards in the future, the type of shareholder initiatives that will be introduced and the corporate response to them, the convergence of corporate laws across countries, the source of resistance to acquisitions and the legal regulation of target defenses, the desirability of legal reforms expanding shareholder voting rights, and the relationship between CEOs and private equity firms. The Case Against Shareholder EmpowermentWilliam W. Bratton, Peter P. Weidenbruch, Jr. Professor of Business Law, Georgetown University Law CenterMichael L. Wachter, William B. Johnson Professor of Law and Economics, University of Pennsylvania Law School

Many look toward enactment of the law reform agenda held out by proponents of shareholder empowerment as a part of the regulatory response to the financial crisis. The authors argue that the financial crisis exposes major weaknesses in the shareholder case. Their claim is that shareholder empowerment delivers management a simple and emphatic marching order: manage to maximize the market price of the stock. And that is exactly what the managers of a critical set of financial firms did in recent years. They managed to a market that focused on increasing observable earnings and, as it turned out, failed to factor in concomitant increases in risk that went largely unobserved. The fact that management bears primary responsibility for the disastrous results does not suffice to effect a policy connection between increased shareholder power and sound regulatory reform. A policy connection instead turns on a counterfactual question: Whether increased shareholder power would have imported more effective risk management in advance of the crisis. We conclude that no plausible grounds exist for making such a case.


Morning SessionEmbattled CEOsMarcel Kahan, George T. Lowy Professor of Law, New York University School of Lawedward B. rock, Saul A. Fox Distinguished Professor of Business Law, University of Pennsylvania Law School

Commentatorsroy J. Katzovicz, Chief Legal Officer, Pershing Square Capital Managementreinier H. Kraakman, Ezra Ripley Thayer Professor of Law, Harvard Law School

The Case Against Shareholder EmpowermentWilliam W. Bratton, Peter P. Weidenbruch, Jr. Professor of Business Law, Georgetown University Law CenterMichael l. Wachter, William B. Johnson Professor of Law and Economics, University of Pennsylvania Law School

CommentatorsWilliam D. Anderson, Jr., Managing Director, Goldman, Sachs & Co.roberta romano, Oscar M. Ruebhausen Professor of Law, Yale Law School

Afternoon SessionPanel on the Reform Agenda

ModeratorsJill e. fisch, Perry Golkin Professor of Law, University of Pennsylvania Law Schooledward B. rock, Saul A. Fox Distinguished Professor of Business Law, University of Pennsylvania Law School

PanelistsHon. Jeffrey W. Bullock, Secretary of State, Delaware Department of Statelucian A. Bebchuk, William J. Friedman and Alicia Townsend Friedman Professor of Law, Economics, and Finance, Harvard Law SchoolGlenn Booraem, Principal and Assistant Fund Controller, VanguardMarcy engel, Chief Operating Officer and General Counsel, Eton Park Capital Managementscott Goebel, Senior Vice President and General Counsel, Fidelity Management & Research Companyrobert Mccormick, Chief Policy Officer, Glass, Lewis & Co., LLC


1 Front row: Jeffrey W. Bullock, Delaware Department of State; Marcy Engel, Eton Park Capital Management. Middle row: John C. Wilcox, Sodali Ltd.; Jennifer Shotwell, Innisfree M&A Incorporated. 2 Robert E. Spatt, Simpson, Thacher & Bartlett; Hon. Jack B. Jacobs, Supreme Court of Delaware. 3 Hon. Travis Laster, Delaware Court of Chancery; Charles I. Cogut, Simpson Thacher & Bartlett LLP. 4 Front row: Scott Goebel, Fidelity Management & Research Company; Robert McCormick, Glass Lewis & Co, LLC; Glenn Booraem, Vanguard. Middle row: Merritt B. Fox, Columbia Law School.

5 Marcy Engel, Eton Park Capital Management. 6 Robert E. Spatt, Simpson, Thacher & Bartlett; Eric J. Friedman, Skadden, Arps, Slate, Meagher & Flom LLP; Heidi Stam, Vanguard; Peter G. Samuels, Proskauer Rose LLP.

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Off the Record: A Board Discussion of the Financial Crisis26 MAy 2009

Eton Park Capital Management, New York City

Moderatorsisaac D. corré, Senior Managing Director, Eton Park Capital Management Jill e. fisch, Perry Golkin Professor of Law, University of Pennsylvania Law School Michael l. Wachter, William B. Johnson Professor of Law and Economics, University of Pennsylvania Law School

Presentations by richard J. Herring, Jacob Safra Professor of International Banking; Professor of Finance, The Wharton School edward B. rock, Saul A. Fox Distinguished Professor of Business Law, University of Pennsylvania Law School

The Off the Record program was created as a forum for the ILE Board of Advisors and a select group of invitees to discuss candidly the current financial crisis in an informal setting. The presentation by Richard Herring provided the context explaining how the crisis came about. Edward Rock’s presentation detailed several different plans for recovery and suggestions for reform moving forward. The program was hosted at the offices of Eton Park Capital Management in New York City.

Corporate roundtable8 MAy 2009

Welcome Michael A. fitts, Dean and Bernard G. Segal Professor of Law, University of Pennsylvania Law School

Morning Session Shareholder Primacy in a Corporatist Political Economy William W. Bratton, Peter P. Weidenbruch, Jr. Professor of Business Law, Georgetown University Law CenterMichael l. Wachter, William B. Johnson Professor of Law and Economics, University of Pennsylvania Law School

Commentators Joseph B. frumkin, Sullivan & Cromwell LLP Mark J. roe, David Berg Professor of Law, Harvard Law School

Big Deal: The Government’s Response to the Financial Crisissteven M. Davidoff, Associate Professor of Law, University of Connecticut School of LawDavid Zaring, Assistant Professor of Legal Studies, The Wharton School

Commentators isaac D. corré, Senior Managing Director, Eton Park Capital ManagementAndrew Metrick, Professor of Finance, Yale School of Management

Afternoon SessionPanel on the Government as Shareholder

Moderatorsedward B. rock, Saul A. Fox Distinguished Professor of Business LawMichael l. Wachter, William B. Johnson Professor of Law and Economics, University of Pennsylvania Law School

PanelistsAlan Beller, Cleary Gottlieb Steen & Hamilton LLProbert f. Hoyt, Department of the Treasuryroberta romano, Oscar M. Ruebhausen Professor of Law, Yale Law SchoolHon. leo e. strine, Jr., Vice Chancellor, Delaware Court of Chancery


1 Front row: Heidi Stam, Vanguard; Hon. Donald F. Parsons, Jr., Delaware Court of Chancery; Gerald Rosenfeld, Rothschild North America. Middle Row: Eric D. Roiter, Boston University School of Law. 2 Robert L. Friedman, The Blackstone Group L.P.; Alan L. Beller, Cleary Gottlieb Steen & Hamilton LLP; Hon. Leo E. Strine, Jr., Delaware Court of Chancery.

4 Perry Golkin, Kohlberg Kravis Roberts & Co.; Gerald Rosenfeld, Rothschild North America; Charles I. Cogut, Simpson Thacher & Bartlett LLP; Jill E. Fisch, University of Pennsylvania Law School; Isaac D. Corré, Eton Park Capital Management; Michael L. Wachter, University of Pennsylvania Law School; Joseph D. Gatto, Barclays Capital Americas; Joseph B. Frumkin, Sullivan & Cromwell LLP; G. Daniel O’Donnell, Dechert LLP; Marcy Engel, Eton Park Capital Management; Robert H. Mundheim, Shearman & Sterling LLP. 5 Marcy Engel, Eton Park Capital Management; Robert H. Mundheim, Shearman & Sterling LLP. 6 William W. Bratton, Georgetown University Law Center; Martha L. Rees, DuPont. Middle row: Stephen L. Brown, TIAA-CREF; Martin S. Lessner, Young Conaway Stargatt & Taylor, LLP; Andrew R. Brownstein, Wachtell, Lipton, Rosen & Katz.

3 Perry Golkin, Kohlberg Kravis Roberts & Co.; Lee A. Meyerson, Simpson Thacher & Bartlett LLP; Hon. E. Norman Veasey, Weil, Gotshal & Manges LLP

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Corporate Roundtable12 DeceMBer 2008

Corporate roundtable6 June 2008


Morning SessionAre U.S. CEOs Overpaid?steven n. Kaplan, Neubauer Family Professor of Entrepreneurship and Finance, The University of Chicago Graduate School of Business

CommentatorsJohn e. core, Ira A. Lipman Professor and Professor of Accounting, The Wharton SchoolDamon silvers, Associate General Counsel, AFL-CIO

Rating the Ratings: How Good Are Commercial Governance Ratings?robert M. Daines, Pritzker Professor of Law and Business, Stanford Law Schoolian D. Gow, Stanford University Graduate School of BusinessDavid f. larcker, James Irvin Miller Professor in Finance, Stanford University Graduate School of Business

CommentatorsMartha carter, Managing Director, Corporate Governance, RiskMetrics GroupAndrew Metrick, Professor of Finance, Yale School of Management

Saïd Business School, University of Oxford

Opening Address colin Mayer and timothy endicott, Deans of Saïd Business School and Faculty of Law, University of Oxford

Morning SessionHedge Fund Activism in EuropeMarco Becht, Director, European Corporate Governance Institute; Professor of Finance and Economics, Université Libre de BruxellesJulian franks, Professor of Finance, London Business SchoolJeremy Grant, Executive Director of the Centre for Corporate Governance, London Business School

CommentatorsJohn H. Armour, Lovells Professorship in Law and Finance, Oriel College, University of Oxfordroy Katzovicz, Chief Legal Officer, Pershing Square Capital Management, L.P.

Hedge Fund Activism in the Enforcement of Bond CovenantsMarcel Kahan, George T. Lowy Professor of Law, New York University School of Lawedward B. rock, Saul A. Fox Distinguished Professor of Business Law, University of Pennsylvania Law School

Afternoon SessionPanel on How Do Institutional Investors Decide to Vote Their Shares? How Should They Decide?

Moderatorsedward B. rock, Saul A. Fox Distinguished Professor of Business LawMichael l. Wachter, William B. Johnson Professor of Law and Economics, University of Pennsylvania Law School

Panelistsstephen l. Brown, Director of Corporate Governance, TIAA-CREFJill e. fisch, Perry Golkin Professor of Law, University of Pennsylvania Law Schoolpaul G. Haaga, Jr., Executive Vice President, Capital Research and Management CompanyMichael Mccauley, Senior Corporate Governance Officer, Florida State Board of Administrationrobert Mccormick, Chief Policy Officer, Glass Lewis & Co, LLCeric D. roiter, Lecturer, Boston University School of Law [former General Counsel, Fidelity Management & Research Company]Hon. Myron t. steele, Chief Justice, Supreme Court of Delaware

CommentatorsHorst eidenmüller, Professor, University of Munichcarolyn conner, Allen & Overy LLP

Afternoon SessionPanel Discussion on Doing Deals When the Sky Is Falling

ModeratorsJohn H. Armour, Lovells Professorship in Law and Finance, Oriel College, University of Oxford Edward B. Rock, Saul A. Fox Distinguished Professor of Business Law, University of Pennsylvania Law School

PanelistsDavid s. Blitzer, Senior Managing Director, Private Equity Group, The Blackstone Group International Limitedcharles crawshay, Assistant Secretary, The Takeover Paneltodd fisher, Kohlberg Kravis Roberts & Co.chris Hale, Travers Smithtim Jenkinson, Professor of Finance, Saïd Business School, University of Oxfordstephanie Keen, Lovells LLPsimon Walker, CEO, British Venture Capital Association


1 Paul G. Haaga, Jr., Capital Research and Management Company. 2 Front row: Simon Walker, British Venture Capital Association; Todd Fisher, Kohlberg Kravis Roberts & Co. Back row: Joseph B. Frumkin, Sullivan & Cromwell LLP; Jill Fisch, Fordham University School of Law. 3 Marco Becht, European Corporate Governance Institute and Université Libre de Bruxelles.

4 Front row: Carolyn Conner, Allen & Overy LLP; David Jackson, BP plc. Back row: Joshua Getzler, Faculty of Law, University of Oxford; Wanjiru Njoya, Faculty of Law, University of Oxford. 5 Front Row: Stephen L. Brown, TIAA-CREF; Hon. Myron T. Steele, Supreme Court of Delaware. Middle row: Anna Gelpern, Rutgers School of Law—Newark. Back row: Faith Stevelman, New York Law School.

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6 David S. Blitzer, The Blackstone Group International Limited; Chris Hale, Travers Smith; Tim Jenkinson, Saïd Business School, University of Oxford. 7 Paul S. Levy, JLL Partners.


institute for law and economics 16 panel programs

institute for law and economics 16 panel programs institute for law and economics 17 panel programs

panel programsin addition to the roundtable series, the institute hosts several panel programs each year that explore important topics in the areas of law and finance. the panelists on these programs provide students and other attendees with real-world examples of the complex situations they face in their professional careers.

THESE PROGRAMS ARE usually followed by Corporate Governance Dinners with further commentary and discussion. The Corporate Governance Dinners provide an opportunity for off-the-record commentary and conversation among presenters and members of the board of advisors, their invited colleagues, and the Institute’s associate faculty.


Chancery Court Program20 April 2010

NCS v. Omnicare

ModeratorsHon. Leo E. Strine, Jr., Vice Chancellor, Chancery Court of DelawareMichael L. Wachter, William B. Johnson Professor of Law and Economics, University of Pennsylvania Law School

PanelistsStephen P. Lamb, Paul, Weiss, Rifkind, Wharton & Garrison LLPDavid McBride, Young Conaway Stargatt & Taylor, LLPH. Jeffrey Schwartz, DLA Piper LLPDonald J. Wolfe, Potter Anderson & Corroon LLP

High-Stakes Showdown in Delaware: Key Participants Look Back at Paramount Communications v. Time

ModeratorsHon. Leo E. Strine, Jr., Vice Chancellor, Chancery Court of DelawareMichael L. Wachter, William B. Johnson Professor of Law and Economics, University of Pennsylvania Law School

PanelistsWilliam T. Allen, Nusbaum Professor of Law and Business, Director, Pollack Center for Law and Business, New York University School of LawMartin Lipton, Wachtell, Lipton, Rosen & KatzTheodore N. Mirvis, Wachtell, Lipton, Rosen & KatzPaul K. Rowe, Wachtell, Lipton, Rosen & Katz

Chancery Court Program16 feBruAry 2010

NCS v. Omnicare

This spring’s Chancery Court programs looked at key cases in corporate law jurisprudence. The panelists at this event had argued and decided the NCS v. Omnicare case. In this case, the board of directors of NCS had agreed to a merger with Genesis. The merger agreement between NCS and Genesis contained a provision that required the Genesis agreement be placed before the corporation’s stockholders for a vote, even if the NCS board of directors no longer recommended it. After approving the merger agreement but before the stockholder vote was scheduled, the NCS board of directors withdrew its recommendation for the Genesis merger after deciding that a competing proposal from Omnicare was a superior transaction. But two NCS stockholders holding a majority of the voting power had already agreed to vote all of their shares in favor of the Genesis merger, guaranteeing the merger with Genesis would obtain NCS stockholder approval. After applying the Unocal standard of enhanced judicial scrutiny, the Delaware Court of Chancery held in NCS v. Omnicare that the defensive measures were reasonable and denied a request by stockholders to stop the merger between NCS and Genesis. The decision was reversed by the Supreme Court of Delaware in a controversial ruling.

High-Stakes Showdown in Delaware: Key Participants Look Back at Paramount Communications v. Time

This program looked at Paramount Communications v. Time from the perspective of lawyers who worked on the case, and the former Chancellor of the Delaware Chancery Court that decided it. The case involved Time, Warner, and Paramount, at that time three of the nation’s largest entertainment companies. The central issue in Paramount’s suit was whether Time’s directors had in effect put the company up for sale when they agreed to a merger with Warner. If the company was for sale, then its directors would have been obligated to respond to bids from Paramount and others. In his decision Chancellor Allen said Time’s board had not put the company up for sale and therefore was not required to get the best price for its stock. “Corporation law does not operate on the theory that directors, in exercising their powers to manage the firm, are obligated to follow the wishes of a majority of shares,” he wrote. “Directors, not shareholders, are charged with the duty to manage the firm.” The ruling was seen as an affirmation of the rights of corporate directors to control the fate of their companies.


1 Victoria Silbey, SunGard Data Systems Inc. 2 Hon. Leo E. Strine, Jr., Delaware Court of Chancery. 3 Martin Lipton, Wachtell, Lipton, Rosen & Katz; William T. Allen, New York University School of Law. 4 Jon H. Outcalt, Former Chairman, NCS Healthcare, Inc. 5 Joel E. Friedlander, Bouchard Margules & Friedlander; Mark Lebovitch, Bernstein Litowitz Berger & Grossmann LLP.

6 H. Jeffrey Schwartz, DLA Piper LLP; Stephen P. Lamb, Paul, Weiss, Rifkind, Wharton & Garrison LLP. 7 Morton A. Pierce, Dewey & LeBoeuf LLP.

8 David McBride, Young Conaway Stargatt & Taylor, LLP; Donald J. Wolfe, Potter Anderson & Corroon LLP.

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Panel Co-ChairsJoseph B. Frumkin, Sullivan & Cromwell LLPG. Daniel O’Donnell, Dechert LLP

PanelistsKenneth A. Lefkowitz, Hughes Hubbard & Reed LLPHoward L. Meyers, Morgan, Lewis & Bockius LLPPeter G. Samuels, Proskauer Rose LLP

Insights from Practice13 octoBer 2009

Shareholder Activism

ModeratorsHon. Stephen P. Lamb, Vice Chancellor, Chancery Court of DelawareEdward B. Rock, Saul A. Fox Distinguished Professor of Business Law, University of Pennsylvania

SpeakersDaniel Pedrotty, Director, Office of Investment, AFL-CIOMarc Weingarten, Schulte Roth & Zabel LLP

Delaware Chancery Court Program11 feBruAry 2009

Shareholder Activism

This program explored examples of shareholder activism in corporate governance. Activist shareholders attempt to put pressure on corporate managers to meet a wide variety of goals. The program particularly focused on shareholder activism as practiced by hedge funds and labor unions, examining the similarities and differences between them. Daniel Pedrotty from the AFL-CIO talked about the investment strategies that his organization uses and the goals it hopes to achieve. Marc Weingarten discussed several cases in which he represented activist hedge funds in his practice with Schulte Roth & Zabel LLP.

The new Insights from Practice series showcases cutting-edge issues in corporate practice. For this panel, five distinguished corporate lawyers shared their career paths and recent experiences with the audience. The discussion centered on three topics, viewed against the backdrop of the financial crisis that began in 2007: the current state of the mergers and acquisitions market, since it was most immediately and directly affected by the crisis; changes in compensatory practices that have emerged as a result of the crisis; and the impact of the crisis on what a corporate lawyer does day-to-day. For the students in the audience, the panelists emphasized the necessity of following your interests and being nimble in response to changes in the profession, since different business environments require different skills from corporate lawyers.


1 Daniel Pedrotty, AFL-CIO; Marc Weingarten, Schulte Roth & Zabel LLP; Hon. Stephen P. Lamb, Delaware Court of Chancery; Edward B. Rock, University of Pennsylvania Law School. 2 Peter G. Samuels, Proskauer Rose LLP.

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3 Howard L. Meyers, Morgan, Lewis & Bockius LLP; Kenneth A. Lefkowitz, Hughes Hubbard & Reed LLP; Joseph B. Frumkin, Sullivan & Cromwell LLP.

4 G. Daniel O’Donnell, Dechert LLP.


institute for law and economics 22 lectures

institute for law and economics 22 lectures institute for law and economics 23 lectures

lecturesthe institute for law and economics presents two series of public lectures: law and entrepreneurship and distinguished jurist. in sponsoring these events, the institute aims to spotlight and honor lawyers who have led note-worthy careers and made significant contributions as corporate executives and entrepreneurs, or as jurists at the state and federal levels.

AUDIENCES ARE DRAWN from all sectors of the University and the legal and business communities. These eminent speakers hold particular appeal and inspiration for students of Penn’s Law School and the Wharton School, with whom they talk informally at receptions following each lecture. The Law and Entrepreneurship lecture is supported in part by the Ronald N. Rutenberg Fund.


3 March 2010Managing Through Change, Managing Through Crisis in Financial ServicesJoseph D. Gatto, Chairman of Investment Banking, Barclays Capital Americas

Joseph D. Gatto is Chairman of Investment Banking of Barclays Capital Americas. He is also a member of the Barclays Capital Investment Banking Executive Committee. In his March ILE lecture, he talked about the challenges of managing at Lehman Brothers during the financial crisis and Lehman’s subsequent filing for bankruptcy. Prior to joining Barclays Capital in 2008, Mr. Gatto was Vice Chairman of Lehman Brothers and Co-Head of Corporate Finance and was a member of the firm’s Investment Banking Executive Committee and Senior Client Council. At Lehman, he had also served as Global Chairman of Mergers and Acquisitions. Before joining Lehman Brothers in 2005, Mr. Gatto spent 21 years at Goldman, Sachs & Co. becoming a partner in that firm in 1994 and serving as Chairman of Consumer Products Banking. Over the course of the last ten years, he has advised clients on over $300 billion of transactions, primarily in the consumer, industrial and retail sectors. Mr. Gatto earned his AB (magna cum laude) from Princeton University, his MBA from the University of Pennsylvania’s Wharton School and his JD (cum laude) from the University of Pennsylvania Law School.

30 September 2009The ‘Ten Points’ for Maintaining a Risk-Taking Entrepreneurial Spirit in a Large CorporationJ.p. suarez, Senior Vice President and General Counsel, Wal-Mart Stores International Division

John Peter Suarez (J.P.) is the Senior Vice President and General Counsel for Wal-Mart Stores International Division, responsible for managing all legal affairs for the 14 countries in which Wal-Mart operates. His areas of responsibility include franchising, operational support, mergers & acquisitions, employment, tax, compliance, and supervision over all other legal affairs. J.P. is responsible for providing advice and legal counseling to all members of the International management team, including the CEO of the International Division. Prior to being named to this position, J.P. was the Senior Vice President and Chief Compliance Officer for Wal-Mart Stores, Inc., responsible for helping to identify all regulatory issues facing the company, implementing mitigation plans, and monitoring overall compliance with legal obligations in the areas of Operations, Pharmacy, Privacy, Environmental, Immigration and Financial Services, and Food Safety. J.P. also led the company’s Product Safety area, helping to ensure that all Wal-Mart’s products meet appropriate safety standards. J.P. joined Wal-Mart Stores, Inc. in 2004 and began his career as the Vice President and General Counsel for Sam’s Club Legal. He was responsible for managing the legal affairs for Sam’s Club, a $44 billion Warehouse Club. His responsibilities included ensuring compliance with regulatory obligations such as OSHA, environmental, and food safety issues and managing operations, employment, merchandise and marketing issues. J.P. also served as the Senior Vice President for Asset Protection for Wal-Mart Stores U.S. Division. Prior to joining Wal-Mart, J.P. served as the U.S. EPA Assistant Administrator for compliance and enforcement, where he was nominated by President Bush and confirmed by the U.S. Senate and was responsible for directing the nation’s environmental compliance and enforcement efforts. He also served as a federal and state prosecutor, and was the chief enforcement officer overseeing New Jersey’s gaming industry. J.P. graduated from the University of Pennsylvania Law School, where he was an Articles Editor for the law review. He completed his undergraduate studies at Tufts University, where he received a B.A. in English and Drama with honors in both majors.

Law and Entrepreneurship Lectures


31 March 2009The PeopleSoft Dealsafra catz, President, Oracle Corporation

Safra Catz is President of Oracle Corporation. In her lecture for ILE, Catz provided an inside look at Oracle’s acquisition of PeopleSoft and the lessons she learned from that deal. Catz has been a member of Oracle’s Board of Directors since October 2001. She serves on Oracle’s Executive Management Committee and is responsible for global operations. Previously, she served as Executive Vice President and Senior Vice President. Prior to joining Oracle, Catz was at Donaldson, Lufkin & Jenrette, a global investment bank that has since merged with Credit Suisse First Boston, where she was a Managing Director from February 1997 to March 1999, and a Senior Vice President from January 1994 until February 1997. Catz is a graduate of the Wharton School and the University of Pennsylvania Law School.

3 March 2009Defining the 21st Century Campus: The Intersection of Education and CommunityHon. Michael nutter, Mayor, City of Philadelphia

In his first public appearance at Penn since his election, Mayor Nutter delivered a noteworthy speech on the importance of education in the scope of his plans for the city. The Hon. Michael A. Nutter was sworn-in as the 98th Mayor of Philadelphia on January 7th, 2008. Mayor Nutter is a native Philadelphian with an accomplished career in public service, business and financial administration. He served as a Philadelphia City Councilman for nearly 15 years representing the city’s Fourth District. Before pursuing his career in public service, Mayor Nutter worked as an investment manager at one of the nation’s leading minority-owned investment banking and brokerage firms. Mayor Nutter is a graduate of the Wharton School of Business.

Law and Entrepreneurship Lectures


29 October 2009Private Securities Litigation—Time for a Fresh Start?Hon. lewis A. Kaplan, United States District Judge, Southern District of New York

Judge Kaplan was appointed United States District Judge for the Southern District of New York on August 9, 1994 and entered on duty August 22, 1994. He received his A.B. with high honors in political science from the University of Rochester in 1966 and his J.D. cum laude from Harvard Law School in 1969. He then served as law clerk to Honorable Edward M. McEntee of the United States Court of Appeals for the First Circuit. Judge Kaplan joined the New York law firm of Paul, Weiss, Rifkind, Wharton & Garrison in 1970 and was a partner in the firm from 1977 until joining the bench. Since his appointment to the bench, Judge Kaplan has handled a number of well known cases. He now is presiding over the first criminal prosecution in a federal district court of a Guantanamo detainee. He tried what the government called the largest criminal tax case in U.S. history, the prosecution of many former members of the accounting firm, KPMG, and others, for conspiracy to defraud the United States and for tax evasion. He was responsible for the civil antitrust price-fixing cases brought against Sotheby’s Holdings, Inc. and Christie’s and the companion criminal antitrust case against Sotheby’s. He is presiding over multidistrict litigations relating to the failed Italian company, Parmalat, and to Lehman Brothers Holdings. He has been the trial judge in such intellectual property cases as Universal City Studios, Inc. v. Reimerdes, in which he held that dissemination of a computer program that decrypts copy-righted motion pictures stored on DVDs violated the Digital Millenium Copyright Act, and Larson v. Thomson, which dealt with a claim of joint copyright ownership in the show Rent by a dramaturg who worked on the script. Other noteworthy decisions include his 1998 ruling enjoining the City of New York from interfering with the so-called Million Youth March in Harlem on the ground that the regulations relied upon by the City in banning the march violated the First Amendment as well as a 1997 decision upholding the Welfare Reform Act of 1996 against constitutional challenge. In 2009, Judge Kaplan received the Federal Bar Council’s Learned Hand Medal for excellence in federal jurisprudence and the Judicial Recognition Award of the National Association of Criminal Defense Lawyers. The New York State Bar Association Section on Commercial and Federal Litigation in 2007 awarded him its Stanley H. Fuld Award for “outstanding contributions to commercial law and litigation.” Judge Kaplan is a Judicial Fellow of the American College of Trial Lawyers, judicial liaison to the Council of the ABA Section of Antitrust Law, and a member of the American Law Institute. He is chair of the Technology Committee of the United States District Court for the Southern District of New York, was a member of the Committee on Automation and Technology of the Judicial Conference of the United States from 1997 through 2003, and has served as a director and member of the executive committee of the Federal Judges’ Association.

Distinguished Jurist Lectures

11 November 2008Delaware Directors’ Fiduciary Duties: The Focus on LoyaltyHon. randy Holland, Justice, Supreme Court of Delaware

The Honorable Randy J. Holland presently serves on the Delaware Supreme Court. He is the youngest person to serve on the Delaware Supreme Court, having been recommended to the Governor by a bipartisan merit selection committee. Prior to his appointment and confirmation in 1986, Justice Holland was in private practice as a partner at Morris, Nichols, Arsht & Tunnell. In January 1999, he was reappointed and confirmed unanimously for a second twelve-year term. Justice Holland graduated from Swarthmore College. He also graduated from the University of Pennsylvania Law School, cum laude, where he received an award for legal ethics. Justice Holland received a Master of Laws in the Judicial Process from the University of Virginia Law School.


17 September 2008Retailers in a Recession: A Fireside Chat on Investing with Bill AckmanWilliam A. Ackman, Managing Member, Pershing Square Capital Management, L.P.

31 March 2008Making Every Mistake OnceSafra Catz, President, Oracle Corporation

19 September 2007Tales from Blackstone’s IPORobert L. Friedman, Senior Managing Director and Chief Legal Officer, The Blackstone Group L.P

28 February 2007Law, Legal Risks, and the Financial MarketsIsaac D. Corré, Senior Managing Director, Eton Park Capital Management

29 November 2006Large-Scale Entrepreneurship: Business Development at GEPamela Daley, Senior Vice President for Corporate Business Development, General Electric Company

24 October 2007The Future of Securities RegulationBrian G. Cartwright, General Counsel, Securities and Exchange Commission

11 October 2006The Embattled CorporationHon. Richard A. Posner, U.S. Seventh Circuit Court of Appeals and University of Chicago Law School

16 March 2006Technology Mergers in a Shrinking WorldHon. Vaughn R. Walker, Chief Judge, U.S. District Court for the Northern District of California

3 March 2005Corporate Federalism: Event Horizons in Corporate GovernanceHon. Myron T. Steele, Chief Justice, Delaware Supreme Court

Past Law and Entrepreneurship Lectures

26 October 2006Managing in the 21st CenturyHenry R. Silverman, Chairman & CEO, Realogy Corporation

16 February 2006The Banker as EntrepreneurMichael J. Biondi, Co-Chairman, Investment Banking, Lazard Frères & Co. LLC

26 October 2005Founding and Building a New Venture: The Story of the National Women’s Law CenterMarcia Greenberger, Founder and Co-President, National Women’s Law Center

7 April 2005A Swing of the Pendulum: 20 Years in M&AJoseph D. Gatto, Managing Director, Goldman, Sachs & Co.

28 October 2004A Twelve-Year Retrospective on Delaware Corporate Jurisprudence and Governance IssuesHon. E. Norman Veasey, Chief Justice, Delaware Supreme Court

4 March 2004Corporate Decision-Making in Delaware CourtsHon. Carolyn Berger, Justice, Delaware Supreme Court

27 February 2003The Effects of Collegiality on Judicial Decision MakingHon. Harry T. Edwards, Circuit Judge, U.S. Court of Appeals for the D.C. Circuit

29 November 2001Fee Shifting as a Control Against the Rogue LitigantHon. Jack B. Jacobs, Justice, Supreme Court of Delaware

24 March 2004The WNBA and Women’s Team Sports: A New Sports Marketing Proposition for the New MillenniumVal Ackerman, President, Women’s National Basketball Association

30 October 2003The Role of Entrepreneurship in Urban Education: Past, Present and FutureJames E. Nevels, Chairman and CEO, The Swarthmore Group, Inc.; Chairman, Philadelphia School Reform Commission

6 November 2002Public Trust—and Distrust— in American Business: What Needs to Be DonePeter G. Peterson, Chairman, The Blackstone Group; Chairman, Federal Reserve Bank of New York; Co-Chair, Conference Board Commission on Public Trust and Private Enterprise

6 March 2001Administering Capital Punishment: Is Texas Different?Hon. Patrick E. Higginbotham, U.S. Court of Appeals for the Fifth Circuit

24 February 2000The Court of Chancery as Teacher of Corporate LawHon. William B. Chandler III, Chancellor, Delaware Court of Chancery

11 February 1999Why Do People Bring Employment Discrimination Cases When They Usually Lose?Hon. Diane Wood, U.S. Court of Appeals for the Seventh Circuit

12 February 1998The Value of Predictability in Corporate LawHon. E. Norman Veasey, Chief Justice, Delaware Supreme Court

26 September 2002What They Did Not Teach Me in Law SchoolRobert M. Potamkin, Co-Chairman and Co-CEO, Planet Automotive Group, Inc.

19 April 2002Smart People Making and Losing Money: Some Recent ExamplesPerry Golkin, Kohlberg Kravis Roberts & Co.

25 October 2001The Economics of Sports Team Franchises for CitiesHon. Edward G. Rendell, Governor, Commonwealth of Pennsylvania

21 February 2001Private Equity: Difficult Investing in a Difficult TimePaul S. Levy, Senior Managing Director, Joseph Littlejohn & Levy

11 February 1997What Economics of Law Must Address Next: Some Thoughts on TheoryHon. Guido Calabresi, U.S. Court of Appeals for the Second Circuit

7 February 1996The MTV ConstitutionHon. Alex Kozinski, U.S. Court of Appeals for the Ninth Circuit

22 March 1995Accountability: Popular Will, Interest Groups, or the Invisible HandHon. Stephen F. Williams, U.S. Court of Appeals for the District of Columbia

13 April 1994On the Constitution Hon. Antonin Scalia, Associate Justice, U.S. Supreme Court

2 March 2000Perspectives on the Health Care RevolutionCharles A. Heimbold, Jr., Chairman and CEO, Bristol-Myers Squibb Company

18 November 1999Ethics in Sports: Deciding the GameAnita DeFrantz, Vice President, International Olympic Committee; President, Amateur Athletic Foundation

23 October 1997How to Maintain Entrepreneurial Values While Your Company Climbs into the Fortune 500Brian L. Roberts, President, Comcast Corporation

27 March 1997The Unique Impact of the Law on the Leveraged Buyout BusinessSaul A. Fox, Fox Paine & Company, LLC

14 October 1992Nonprice CompetitionHon. Douglas H. Ginsberg, U.S. Court of Appeals for the District of Columbia

3 December 1991Corporate Takeovers and Our Schizophrenic Conception of the CorporationHon. William T. Allen, Chancellor, Delaware Court of Chancery

1990The Constitution and the Spirit of FreedomHon. Anthony M. Kennedy, Associate Justice, U.S. Supreme Court

Past Distinguished Jurist Lectures


Past Law and

Entrepreneurship Lectures

1 William A. Ackman

2 Val Ackerman

3 Isaac D. Corré

4 Pamela Daley

5 Robert L. Friedman

6 Marcia Greenberger

7 James E. Nevels

Past Distinguished Jurist Lectures

8 Brian G. Cartwright

9 Hon. Myron T. Steele

10 Hon. Carolyn Berger

11 Hon. William B. Chandler III

12 Hon. E. Norman Veasey

13 Hon. Jack B. Jacobs

14 Hon. Harry T. Edwards

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institute for law and economics 32 academic events

institute for law and economics 32 academic events institute for law and economics 33 academic events

Academic Eventsmajor one-and two-day symposia are organized under the sole sponsorship of the institute for law and economics, and in cooperation with other organizations.

IN FEBRUARY 2005 we launched an annual conference on Law and Finance, jointly sponsored by ILE, the Wharton School’s Financial Institutions Center, and NYU’s Pollack Center for Law and Business. The conference location alternates between Penn and NYU. In October 2002 ILE debuted the ILE/Wharton Finance series, providing an opportunity for faculty and advanced students from the Law School, the Wharton School, and the Department of Economics to come together around an area of common interest and strengthening the Institute’s core academic relationships. A dinner follows each presentation, with commentary presented by members of ILE’s Associate Faculty from Law, Wharton Finance, and the Department of Economics and a general discussion.


Penn/NYU Conference on Law and Finance26–27 feBruAry 2010

NYU/Penn Conference on Law and Finance27–28 feBruAry 2009

University of Pennsylvania Law School

New York University School of Law

Jointly sponsored byInstitute for Law and Economics University of PennsylvaniaFinancial Institutions Center The Wharton SchoolCenter for Law & Business New York University

Organized byWilliam T. Allen, NYU Stern School of Business and NYU School of Law, New York UniversityYakov Amihud, Stern School of Business, New York UniversityJill E. Fisch, University of Pennsylvania Law SchoolMichael Roberts, The Wharton School, University of Pennsylvania

Session IIs Delaware’s Antitakeover Statute Unconstitutional? Evidence from 1988–2008Guhan Subramanian, Harvard Law SchoolSteven Herscovici, Analysis Group, Inc.Brian Barbetta, Analysis Group, Inc.

Jointly sponsored byInstitute for Law and Economics University of PennsylvaniaFinancial Institutions Center The Wharton SchoolCenter for Law & Business New York University

Organized byWilliam T. Allen, NYU Stern School of Business and NYU School of Law, New York UniversityYakov Amihud, Stern School of Business, New York UniversityMichael Roberts, The Wharton School, University of PennsylvaniaEdward B. Rock, University of Pennsylvania Law School

Session IComparing Legal and Alternative Institutions in Finance and CommerceH. Franklin Allen, The Wharton School, University of PennsylvaniaJun Qian, Carroll School of Management, Boston College

CommentatorCurtis Milhaupt, Columbia University Law School

CommentatorRobert M. Daines, Stanford Law School

ModeratorHon. Jack B. Jacobs, Supreme Court of Delaware

Session IIAsset Fire Sales and Credit EasingAndrei Shleifer, Harvard University Department of EconomicsRobert W. Vishny, Booth School of Business, University of Chicago

CommentatorJonathan R. Macey, Yale Law School

ModeratorMichael Roberts, The Wharton School, University of Pennsylvania

ModeratorWilliam T. Allen, NYU Stern School of Business and NYU School of Law, New York University

Session IIMotions for Lead Plaintiff in Securities Class ActionsStephen Choi, New York University School of Law

CommentatorAlexander Dyck, Joseph J. Rotman School of Management, University of Toronto

ModeratorEdward B. Rock, University of Pennsylvania Law School

Session IIIInternal Governance of FirmsViral V. Acharya, London Business SchoolStewart C. Myers, Sloan School of Management, MITRaghuram Rajan, Graduate School of Business, University of Chicago

CommentatorAlan Schwartz, Yale Law School

Session IIIAre Securities Class Actions ‘Supplemental’ to SEC Enforcement? An Empirical Analysis Michael Klausner, Stanford Law School

CommentatorSimi Kedia, Rutgers Business School


Session IVThe Impact of Investor Protection Law on Corporate Policy: Evidence from the Blue Sky LawsAshwini K. Agrawal, Stern School of Business, New York University

CommentatorAllen Ferrell, Harvard Law School

ModeratorMarcel Kahan, New York University School of Law

Session IVThe Decisions of Corporate Special Litigation Committees: An Empirical InvestigationMinor Myers, Brooklyn Law School

CommentatorSanjai Bhagat, Leeds School of Business, University of Colorado at Boulder

ModeratorGerald Rosenfeld, NYU Stern School of Business

Session VThe Market Value of the Vote: A Contingent Claims and One Share-One Vote Is Unenforceable and Sub-OptimalAvner Kalay, David Eccles School of Business, University of UtahShagun Pant, David Eccles School of Business, University of Utah

CommentatorHenry Hu, The University of Texas Law School


Session VWhen the Government Is the Controlling Shareholder Marcel Kahan, New York University School of LawEdward B. Rock, University of Pennsylvania Law School

CommentatorHeitor V. Almeida, University of Illinois at Urbana-Champaign

ModeratorHon. Travis Laster, Delaware Court of Chancery

Session VIA Lintner Model of Dividends and Managerial RentsBart M. Lambrecht, Lancaster University Management SchoolStewart C. Myers, MIT Sloan School of Management

ModeratorGerald Rosenfeld, NYU Stern School of Business

Session VIThe Returns to Hedge Fund ActivismAlon Brav, Duke University Graduate SchoolWei Jiang, Columbia Business SchoolFrank Partnoy, University of San Diego School of LawRandall Thomas, Vanderbilt University Law School

CommentatorStuart Gillan, Rawls College of Business Administration, Texas Tech University

ModeratorRichard Kihlstrom, The Wharton School, University of Pennsylvania

Session VIIRationalizing Appraisal Standards in Compulsory BuyoutsLawrence Hamermesh, Widener University School of LawMichael L. Wachter, University of Pennsylvania Law School

CommentatorAlan Schwartz, Yale Law School

ModeratorRichard E. Kihlstrom, The Wharton School, University of Pennsylvania

Session VIIThe Price of Pay To Play in Securities Class Actions Stephen J. Choi, New York University Law SchoolDrew T. Johnson-Skinner, Law Clerk to Judge John G. Koeltl of the United States, District Court for the Southern District of New YorkA.C. Pritchard, University of Michigan Law School

CommentatorSanjai Bhagat, Leeds School of Business, University of Colorado at Boulder

ModeratorRichard E. Kihlstrom, The Wharton School, University of Pennsylvania

CommentatorDaniel Wolfenzon, Columbia Business School

ModeratorRichard Kihlstrom, The Wharton School, University of Pennsylvania

Session VIIIDoes Board Classification Matter for Industry Rivals? Evidence of Spillover Effects in the Market for Corporate ControlKose John, NYU Stern School of BusinessDalida Kadyrzhanova, Robert H. Smith School of Business, University of Maryland

CommentatorAlicia Davis Evans, University of Michigan Law School

ModeratorMichael L. Wachter, University of Pennsylvania Law School


PEnn/nYU 101 Alan Schwartz, Yale Law School; Michael A. Fitts, University of Pennsylvania Law School. 2 Klaus Hopt, Max-Planck-Institut für ausl. und intern. Privatrecht.

3 Simi Kedia, Rutgers Business School.

4 Hon. Jack B. Jacobs, Supreme Court of Delaware; Stewart C. Myers, MIT Sloan School of Management.

nYU/PEnn 09 5 Jennifer H. Arlen, New York University School of Law. 6 Raghuram G. Rajan, International Monetary Fund.

7 Marcel Kahan, New York University School of Law.

8 Alicia Davis Evans, The University of Michigan Law School. 9 H. Franklin Allen, The Wharton School.

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6 7

8 9

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ILE/Wharton Finance Seminars

18 February 2010Will the U.S. Bank Recapitalization Succeed? Eight Lessons from Japan (co-authored with Takeo Hoshi)Anil Kashyap, Edward Eagle Brown Professor of Economics and Finance, The University of Chicago Booth School of Business

During the financial crisis that started in 2007, the U.S. government has used a variety of tools to try to rehabilitate the U.S. banking industry. Many of those strategies were used also in Japan to combat its banking problems in the 1990s. There are also a surprising number of other similarities between the current U.S. crisis and the recent Japanese crisis. The Japanese policies were only partially successful in recapitalizing the banks until the economy finally started to recover in 2003. From these unsuccessful attempts, the authors derive eight lessons. In light of these eight lessons, they assess the policies the U.S. has pursued. The U.S. has ignored three of the lessons and it is too early to evaluate the U.S. policies with respect to four of the others. So far the U.S. has avoided Japan’s problem of having impaired banks prop up zombie firms.

5 November 2009Regulatory Reform in the Real WorldHowell Jackson, James S. Reid, Jr. Professor of Law, Harvard Law School

Over the past several decades, the structure of financial regulation has undergone dramatic transformations in many jurisdictions. The expansion of cross-sectoral competition, the emergence of financial conglomerates, and convergence of regulatory strategies all put intense pressure on tradition models of sectoral oversight. Most leading countries have consolidated regulatory functions to some degree, although there remains ample variation in organizational structures, with competing approaches ranging from highly consolidated agencies found in the United Kingdom and Japan, to functional divisions of authority adopted in Australia and the Netherlands. Against this backdrop, the United States with the world’s most fragmented system of financial supervision is currently engaged in a national debate over financial regulatory reform. In the opening round, the Obama Administration eschewed radical consolidation of administrative functions and proposed more modest organizational reforms that would retain most of our sectoral regulatory agencies while overlaying several new functional capabilities designed to police systemic risk and improve consumer protections. Although the Administration’s goal in limiting itself to modest organization reforms was designed to facilitate congressional action, even its modest recommendations are facing opposition and critics have offered alterative organizational structures, some more ambitious than the Administration’s approach and some less. In this paper, the author locates the structural reforms currently being considered in the United States within longstanding policy debates over optimal regulatory structure. These hybrid approaches on which national debate is now focused offer some of the advantages of more consolidated regulatory oversight but these approaches also have serious drawbacks that are likely to diminish the reforms efficacy and create supervisory problems in the years ahead. After reviewing the advantages and disadvantages of this hybrid approach to financial regulation, the author offers several suggestions as to how the Obama Administration proposals might be amended to improve the efficacy of a hybrid regulatory structure. The author also discusses refinements to existing proposals that would facilitate future rationalization of our financial regulatory structure.

Co-Sponsored by Institute for Law and Economics and Department of Finance, The Wharton School

18 February 2010Will the U.S. Bank Recapitalization Succeed? Eight Lessons from Japan (co-authored with Takeo Hoshi)Anil Kashyap, Edward Eagle Brown Professor of Economics and Finance, The University of Chicago Booth School of Business

CommentatorsTodd Gormley, Wharton FinanceCharles W. Mooney, Jr., Penn LawMichael R. Roberts, Wharton FinanceEdward B. Rock, Penn Law

5 November 2009Regulatory Reform in the Real WorldHowell Jackson, James S. Reid, Jr. Professor of Law, Harvard Law School

CommentatorsCary Coglianese, Penn LawJill Fisch, Penn LawTodd Gormley, Wharton FinanceMark Jenkins, Wharton Finance


1 H. Franklin Allen, The Wharton School.

2 Anil Kashyap, The University of Chicago Booth School of Business.

1

2

3

4

3 Robert F. Stambaugh, The Wharton School. 4 Howell Jackson, Harvard Law School.


Matthew D. Adler, Leon Meltzer Professor of Law

Regulatory Theory, in A Companion to Philosophy of Law and Legal Theory, 2010.

Future Generations: A Prioritarian View, George Washington University Law Review, 2009.

Bounded Rationality and Legal Scholarship, in Theoretical Foundations of Law and Economics, 2009.

Franklin Allen, Nippon Life Profes-sor of Finance and Professor of Economics, The Wharton School

Credit Market Competition and Capital Regulation (with E. Carletti and R. Marquez), Review of Financial Studies, forthcoming.

Interbank Market Liquidity and Central Bank Intervention (with E. Carletti and D. Gale), Journal of Monetary Economics, 2009.

Mark-to-Market Accounting and Liquidity Pricing (with E. Carletti), Journal of Accounting and Economics, 2008.

Aditi Bagchi, Assistant Professor of Law

Unequal Promises, Working Paper.

Publications and Papers

Listed below is a sampling of recently published papers and work in progress by members of the Associate Faculty of the Institute for Law and Economics. ILE maintains a series of research papers and provides copies—electronic or paper—to interested parties upon request to [email protected]. The Institute is a member of the Legal Scholarship Network (LSN), a subset of the Social Science Research Network. Current ILE research papers are posted in the University of Pennsylvania Law and Economics Research Paper Series on the LSN Web site. Abstracts as well as complete papers can be downloaded (www.ssrn.com/link/penn-lawecon. html). Faculty appointments are in the University of Pennsylvania Law School unless otherwise noted.

The Myth of Equality in the Employment Relation, Michigan State Law Review, 2010.

Intention, Torture and the Concept of State Crime, Penn State Law Review, 2009.

Howard F. Chang, Earle Hepburn Professor of Law

Implications of Globalization and Trade for Water Quality in Transboundary Rivers (with Hilary Sigman), in Global Change: Impacts on Water and Food Security, 2010.

Cultural Communities in a Global Labor Market: Immigration Restrictions as Residential Segregation, in Challenges of Globalization: Immigration, Social Welfare, Global Governance, 2009.

Immigration Restriction as Redistributive Taxation: Working Women and the Costs of Protectionism in the Labor Market, Journal of Law, Economics and Policy, 2009.

Cary Coglianese, Deputy Dean for Academic Affairs, Edward B. Shils Professor of Law and Professor of Political Science

Management-Based Regulation: Implications for Public Policy, in Risk and Regulatory Policy: Improving the Governance of Risk, 2010.

Presidential Control of Administrative Agencies: A Debate over Law or Politics?, Journal of Constitutional Law, 2010.

Engaging Business in the Regulation of Nanotechnology, in Governing Uncertainty: Environmental Regulation in the Age of Nanotechnology, 2010.

Jill Fisch, Perry Golkin Professor of Law; Co-Director, Institute for Law and Economics

The Overstated Promise of Corporate Governance, University of Chicago Law Review, 2010.

The Power of Proxy Advisors: Myth or Reality? (with Stephen Choi and Marcel Kahan), Emory Law Journal, 2010.

Rethinking the Regulation of Securities Intermediaries, University of Pennsylvania Law Review, 2010.

Lawrence A. Hamermesh, Ruby R. Vale Professor of Corporate and Business Law, Widener University School of Law (Attorney Fellow, Securities and Exchange Commission Division of Corporation Finance, 2010–2011)

Loyalty’s Core Demand: The Defining Role of Good Faith in Corporate Law (with Leo Strine, Jr., R. Franklin Balotti & Jeffrey Gorris), Georgetown Law Journal, 2010.

Rationalizing Appraisal Standards in Compulsory Buyouts (with Michael Wachter), Boston College Law Review, 2009.

The Short and Puzzling Life of the “Implicit Minority Discount” in Delaware Appraisal Law (with Michael Wachter), University of Pennsylvania Law Review, 2007.

Robert P. Inman, Richard King Mellon Professor of Finance; Professor of Finance and Economics, Business and Public Policy, Real Estate, The Wharton School

How Should Suburbs Help Their Central Cities? Growth and Welfare Enhancing Intra-Metro-politan Fiscal Distributions, Annals of the American Academy of Political and Social Sciences, 2009.

Making Cities Work: Prospects and Policies for Urban America, Princeton University Press, 2009.

The Flypaper Effect, The New Palgrave Dictionary of Economics, 2009.

Michael S. Knoll, Theodore K. Warner Professor of Law, Professor of Real Estate, The Wharton School; Co-Director, Center for Tax Law & Policy.

The Taxation and Competitive-ness of Sovereign Wealth Funds: Do Taxes Encourage Sovereign Wealth Funds to Invest in the United States?, Southern California Law Review, 2009.

Samuel Zell, the Chicago Tribune and the Emergence of the S ESOP: Understanding the Tax Advantages and Disadvantages of S ESOPs, Ohio State Law Journal, 2009.

Friedrich K. Kübler, Professor and Director of the Banking Law Institute Emeritus, University of Frankfurt, Germany; Professor of Law

European Initiatives for the Regulation of Nonbank Financial Institutions, International Monetary Fund, 2010.

Medien, Menschenrechte und Demokratie (Media, Human Rights, and Democracy), 2008.

Recht und Sozialwissen-schaften—Herausforderungen und Chancen der Verhalten-sökonomie (Law and Social Sciences—the Challenge and the Promise of Behavioral Economics) (with Dorothea Kübler), Kritische Vierteljahress-chrift für Gesetzgebung und Rechtswissenschaft, 2007.

Kristin Madison, Professor of Law

Defragmenting Health Care Delivery Through Quality Reporting, in The Fragmentation of U.S. Health Care: Causes and Solutions, 2010.

Patients as “Regulators”?: Patients’ Evolving Influence Over Health Care Delivery, Journal of Legal Medicine, 2010.

Patients as Mercenaries?: The Ethics of Using Financial Incentives in the War on Unhealthy Behaviors (with Scott D. Halpern & Kevin G. Volpp), Circulation: Cardiovascular Quality & Outcomes, 2009.

George J. Mailath, Walter H. Annenberg Professor in the Social Sciences, Professor of Economics, School of Arts and Sciences

Common Learning (with Martin W. Cripps, Jeffrey C. Ely, and Larry Samuelson), Econometrica, July 2008.

Purification in the Infinitely-Repeated Prisoners’ Dilemma (with V. Bhaskar and StephenMorris), Review of Economic Dynamics, July 2008.

Does Competitive Pricing Cause Market Breakdown Under Extreme Adverse Selection? (with Georg Nöldeke), Journal of Economic Theory, May 2008.

Charles W. Mooney, Jr., Charles A. Heimbold, Jr. Professor of Law

Sales of Receivables: Potpourri of Puzzles [tentative title] (with Steven Harris), Gonzaga Law Review Symposium, 2010.

Core Issues Under the UNIDROIT [Draft] Convention on Intermediated Securities: Views From the United States and Japan (with Hideki Kanda), 2010.


Law and Systems for Intermediated Securities and the Relationship of Private Property Law to Securities Clearance and Settlement: United States, Japan, and the UNIDROIT Draft Convention, Bank of Japan Institute for Monetary and Economic Studies, 2008.

David K. Musto, Ronald O. Perelman Professor in Finance, The Wharton School

What do Consumers’ Fund Flows Maximize? Evidence from their Brokers’ Incentives, Working Paper, 2010.

Predatory Mortgage Lending (with Philip Bond and Bilge Yilmaz), Journal of Financial Economics, 2009.

Vote Trading and Information Aggregation (with Susan Christoffersen, Chris Geczy, and Adam Reed), Journal of Finance, 2007.

Gideon Parchomovsky, Professor of Law

The Hidden Function of Takings Compensation (with Abraham Bell), Virginia Law Review, forthcoming.

The Distortionary Effect of Evidence on Primary Behavior (with Alex Stein), Harvard Law Review, forthcoming.

Beyond Fair Use (with Phil Weiser), Cornell Law Review, forthcoming.

Andrew W. Postlewaite, Harry P. Kamen Professor of Economics, School of Arts and Sciences; Professor of Finance, The Wharton School

Political Reputations and Campaign Promises (with E. Aragones and T. Palfrey), Journal of the European Economic Association, 2007.

Courts of Law and Unforeseen Contingencies (with L. Anderlini and L. Felli), Journal of Law, Economics and Organization, 2007.

Social Assets (with G. Mailath), International Economic Review, 2006.

Michael R. Roberts, Associate Professor of Finance, The Wharton School

Renegotiation of Financial Contracts: Evidence from Private Credit Agreements (with Amir Sufi), Journal of Financial Economics, 2009.

How does Financing Impact Investment? The Role of Debt Covenants (with Sudheer Chava), Journal of Finance, 2008.

Back to the Beginning: Persistence and the Cross-Section of Corporate Capital Structure (with Michael Lemmon and Jaime Zender, Journal of Finance, 2008.

Edward B. Rock, Saul A. Fox Distinguished Professor of Business Law; Co-Director, Institute for Law and Economics

Embattled CEOs (with Marcel Kahan), Texas Law Review, 2010.

The Anatomy of Corporate Law (second edition) (with Kraakman, Armour, Davies, Enriques, Hansmann, Hertig, Hopt, and Kanda), 2009.

How to Prevent Hard Cases from Making Bad Law: Bear Stearns, Delaware and the Strategic Use of Comity (with Marcel Kahan), Emory Law Journal, 2009.

Chris W. Sanchirico, Professor of Law, Professor of Business and Public Policy, The Wharton School

Tax Eclecticism, Tax Law Review, forthcoming.

A Critical Look at the Economic Argument for Taxing Only Labor Income, Tax Law Review, forthcoming.

Progressivity and Potential Income: Measuring the Effect of Changing Work Patterns on Income Tax Progressivity, Columbia Law Review, 2008.

David A. Skeel, Jr., S. Samuel Arsht Professor of Corporate Law

Assessing the Chrysler Bankruptcy (with Mark Roe), Michigan Law Review, 2010.

Governance in the Ruins, Harvard Law Review, 2008 (essay review of Curtis Milhaupt & Katharina Pistor, Law and Capitalism).

Who Makes the Rules for Hostile Takeovers, and Why? The Peculiar Divergence of US and UK Takeover Regulation (with John Armour), Georgetown Law Journal, 2007.

Michael L. Wachter, William B. Johnson Professor of Law and Economics; Co-Director, Institute for Law and Economics

The Case Against Shareholder Empowerment (with William W. Bratton), University of Pennsylvania Law Review, 2010.

Rationalizing Appraisal Standards in Compulsory Buyouts (with Lawrence A. Hamermesh), Boston College Law Review, 2009.

Shareholder Primacy’s Corporatist Origins: Adolf Berle and The Modern Corporation (with William W. Bratton), Journal of Corporate Law, 2008.

Susan M. Wachter, Richard B. Worley Professor of Financial Management, Professor of Real Estate and Finance, The Wharton School; Co-Director, Institute for Urban Research

Systemic Risk and Market Institutions (with Andrey Pavlov), Yale Journal on Regulation, 2009.

Systemic Risk Through Securitization: The Result of Deregulatory and Regulatory Failure (with Patricia McCoy and Andrey Pavlov), Connecticut Law Review, 2009.

State and Local Anti-Predatory Lending Laws: The Effect of Legal Enforcement Mechanism (with Raphael W. Bostic et al.), Journal of Economics and Business, 2008.

Amy Wax, Robert Mundheim Professor of Law

Race, Wrongs, and Remedies: Group Justice in the 21st Century, Hoover Institution Press/Rowman and Littlefield, 2009.

Stereotype Threat: A Case of Overclaim Syndrome?, in Stereotype Threat and Unconscious Bias: The State of the Research, American Enterprise Institute, 2009.

The Family Law Doctrine of Equivalence, Michigan Law Review, 2009.

Bilge Yilmaz, Associate Professor of Finance, The Wharton School

Adverse Selection and Convertible Bonds (with Archishman Chakraborty), Review of Economic Studies, forthcoming.

Predatory Mortgage Lending (with Philip Bond and David Musto), Journal of Financial Economics, 2009.

Information and Efficiency in Tender Offers (with Robert Marquez), Econometrica, 2008.

institute for law and economics 41 associate faculty

Associate Faculty


9 Charles W. Mooney, Jr.

10 Michael S. Knoll

11 Friedrich K. Kübler

12 Kristin Madison

13 Franklin Allen

14 Gideon Parchomovsky

15 David K. Musto

16 Andrew Postlewaite

17 Susan M. Wachter

18 Chris W. Sanchirico

19 Reed Shuldiner

20 David A. Skeel, Jr.

21 Amy L. Wax

22 Bilge Yilmaz

31 2 4

5 86 7

9 10 11 12

13 14 15

1716 18

2220 2119

1 Matthew Adler

2 Aditi Bagchi

3 Richard E. Kihlstrom

4 Howard F. Chang

5 Cary Coglianese

6 Robert W. Holthausen

7 Richard J. Herring

8 Michael R. Roberts


Matthew D. Adler, Leon Meltzer Professor of Law

Professor Adler is a graduate of Yale College, St. Antony’s College of Oxford University, and the Yale Law School. Prior to teaching at Penn, he worked as a law clerk for Judge Harry Edwards, U.S. Court of Appeals for the D.C. Circuit, and for Justice Sandra Day O’Connor, U.S. Supreme Court, and practiced law at Paul, Weiss, Rifkind, Wharton & Garrison in New York City. At the Penn Law School, Professor Adler teaches administrative law, constitutional law, and regulation. His current research focuses on policy analysis and on risk regulation.

Franklin Allen, Nippon Life Professor of Finance and Professor of Economics, The Wharton School

Franklin Allen is the Nippon Life Professor of Finance and Professor of Economics at the Wharton School of the University of Pennsyl-vania. He has been on the faculty since 1980. He is currently Co-Director of the Wharton Financial Institutions Center. He was formerly Vice Dean and Director of Wharton Doctoral Programs and Executive Editor of the Review of Financial Studies, one of the leading academic finance journals. He is a past President of the American Finance Association, the Western Finance Association, the Society of Financial Studies, and the Financial Intermediation Research Society. He received his doctorate from Oxford University. Dr. Allen’s main areas of interest are corporate finance, asset pricing, comparative financial systems, and financial crises. He is a co-author with Richard Brealey and Stewart Myers of the eighth and ninth editions of the textbook Principles of Corporate Finance.

Aditi Bagchi, Assistant Professor of Law

Professor Bagchi received a J.D. from Yale Law School in 2003 and a M.Sc. in economic and social history from Oxford University in 2000. She clerked for United States Court of Appeals Judge Julio Fuentes and practiced law with Cravath, Swaine & Moore LLP in New York. She joined the Penn Law faculty in 2006 and currently teaches contracts and labor law. Her areas of research include normative theories of private law and comparative political economy.

Associate Faculty

Howard F. Chang, Earle Hepburn Professor of Law

Professor Chang received a Ph.D. in economics from the Massa-chusetts Institute of Technology in 1992, a J.D. from Harvard Law School in 1987, a Master in Public Affairs from Princeton University in 1985, and an A.B. from Harvard College in 1982. Prior to joining the Penn faculty in 1999, he was a Professor of Law at the University of Southern California Law School, where he began teaching in 1992. He was a Visiting Professor of Law at Stanford Law School in 1998, at Harvard Law School and at the New York University School of Law in 2001, at the University of Michigan Law School in 2002, and at the University of Chicago Law School in 2007, and a Visiting Associate Professor of Law at the Georgetown University Law Center from 1996 to 1997. He served as a law clerk for the Honorable Ruth Bader Ginsburg on the U.S. Court of Appeals for the D.C. Circuit from 1988 to1989. He served on the Board of Directors of the American Law and Economics Association from 2004 to 2007. He has written on a wide variety of subjects including environmental protection, international trade, immigration, intellectual property, and the economics of litigation and settlement.

Cary Coglianese, Associate Dean for Academic Affairs, Edward B. Shils Professor of Law and Professor of Political Science

Cary Coglianese is the Associate Dean for Academic Affairs and the Edward B. Shils Professor of Law at the University of Pennsyl-vania Law School, as well as Professor of Political Science and the director of the Penn Program on Regulation. Coglianese is the founder of the Law & Society Association’s international collaborative research network on regulatory governance, a council member of the American Bar Association’s section on Administrative Law and Regulatory Practice, and a fellow of the American Bar Foundation. He is also a founder of the peer- reviewed journal Regulation & Governance, for which he now serves on the editorial board. Coglianese received his J.D., M.P.P., and Ph.D. in political science from the University of Michigan, and for twelve years served on the faculty of the John F. Kennedy School of Government at Harvard University. He has also been a visiting professor of law at Stanford University and Vanderbilt University and an affiliated scholar at the Harvard Law School.

institute for law and economics 42 associate faculty institute for law and economics 43 associate faculty

Patricia M. Danzon, Celia Z. Moh Professor of Health Care Systems, Insurance and Risk Management, The Wharton School

Professor Danzon received her Ph.D. in economics from the University of Chicago in 1973 and joined the Penn faculty from Duke University in 1985. She is a member of the Institute of Medicine and the National Academy of Social Insurance, and she has served as a consultant to many private and public institutions in the U.S. and worldwide. Professor Danzon’s research interests are in health care, pharmaceuticals, insurance, law, and economics. She has published widely in scholarly journals on a broad range of subjects related to medical care, pharmaceuticals, insurance, and the economics of law.

Jill Fisch, Perry Golkin Professor of Law; Co-Director, Institute for Law and Economics

Professor Fisch received her J.D. from Yale Law School in 1985. Before joining the Penn faculty in 2008, she held the T.J. Maloney Chair in Business Law at Fordham Law School and served as founding director of the Fordham Corporate Law Center. She has also been a visiting professor at Harvard Law School, Columbia Law School and Georgetown University Law Center. Prior to entering academia, Professor Fisch practiced law with the United States Department of Justice and the New York office of Cleary, Gottlieb, Steen and Hamilton. Her research focuses on corporate governance, business litigation, and securities regulation.

Michael A. Fitts, Dean of the Law School and Bernard G. Segal Professor of Law

Michael A. Fitts was named Dean of the Law School in March 2000. Before joining the Penn Law faculty in 1985, Dean Fitts served as clerk to the Honorable A. Leon Higginbotham, Jr., U.S. Court of Appeals for the Third Circuit, and as attorney advisor in the Office of Legal Counsel in the U.S. Department of Justice. At Penn he was appointed Associate Professor of Law in 1990, Professor of Law in 1992 and Robert G. Fuller, Jr. Professor of Law in 1996. From 1996 to 1998 he served as Associate Dean for Academic Affairs at the Law School and was active in establishing a variety of joint programs with other schools within the University. In 1999 he served as Visiting Professor in Political Science at Swarthmore College. Dean Fitts’ research has focused on the effect of various structural changes (e.g., stronger political parties, presidents or centralized legal institutions) on government budgeting and legislation. He has also written more recently on the structure of non-profit institutions and their leadership.

Lawrence Hamermesh, Ruby R. Vale Professor of Corporate and Business Law, Widener University School of Law (Attorney Fellow, Securities and Exchange Commission Division of Corporation Finance, 2010–2011)

Professor Hamermesh received a B.A. from Haverford College in 1973, and a J.D. from Yale Law School in 1976. Professor Hamer-mesh practiced law with Morris, Nichols, Arsht & Tunnell, Wilmington, Delaware, as an associate from 1976–84, and as a partner from 1985–94. Professor Hamermesh joined the faculty at Widener in 1994, and teaches and writes in the areas of corporate finance, mergers and acquisitions, securities regulation, business organizations, and professional responsibility. Since 1995, Professor Hamermesh has been a member of the Council of the Corporation Law Section of the Delaware State Bar Association, which is responsible for the annual review and modernization of the Delaware General Corporation Law, and served as Chair of the Council from 2002 to 2004. In 2002 and 2003 he also served as the Reporter for the American Bar Association’s Task Force on Corporate Responsibility. He served from 2001 to 2007 as a member of the Committee on Corporate Laws of the American Bar Association Section of Business Law, which supervises the drafting of the Model Business Corporation Act. In 2007 Professor Hamermesh was appointed as Chair of the Section of Business Law’s Committee on Corporate Documents and Process. In 1999 Professor Hamermesh was elected as a member of the American Law Institute. Professor Hamermesh is also a member of the Board of Directors of ACLU Delaware, Inc.

Richard J. Herring, Jacob Safra Professor of International Banking, Professor of Finance, The Wharton School; Co-Director, Wharton Financial Institutions Center

Richard J. Herring is Jacob Safra Professor of International Banking and Professor of Finance at The Wharton School, University of Pennsylvania, where he is also founding director of the Wharton Financial Institutions Center, one of Wharton’s largest research centers. From 2000 to 2006, he served as the Director of the Lauder Institute of International Management Studies and from 1995 to 2000, he served as Vice Dean and Director of Wharton’s Undergraduate Division. During 2006, he was a Professorial Fellow at the Reserve Bank of New Zealand and Victoria University.


He is the author of more than 100 articles, monographs and books on various topics in financial regulation, international banking, and international finance. At various times his research has been funded by grants from the National Science Foundation, the Ford Foundation, the Brookings Institution, the Sloan Foundation, and the Council on Foreign Relations. Outside the university, he is co-chair of the US Shadow Financial Regulatory Committee and Executive Director of the Financial Economist’s Roundtable, the Advisory Board of the European Banking Report in Rome, and the Institute for Financial Studies in Frankfurt. He served as co-chair of the Multinational Banking seminar from 1992–2004 and was a Fellow of the World Economic Forum in Davos from 1992–95. He was a member of the Group of 30 task force on the reinsurance industry, as well as an earlier study group on international supervision and regulation. Currently, he is an independent director of the DWS Scudder mutual fund complex and has served on the predecessor Deutsche Asset Management and Bankers Trust boards since 1990. He is also an independent director of the Daiwa closed end funds. Herring received his undergraduate degree from Oberlin College in 1968 and his PhD from Princeton University in 1973. He has been a member of the Finance Department since 1972. He is married, with two children, and lives in Bryn Mawr, Pennsylvania.

Robert W. Holthausen, The Nomura Securities Company Professor, Professor of Accounting and Finance, and Chairman, Accounting Department, The Wharton School

Professor Holthausen earned his doctorate and his M.B.A. at the University of Rochester. Prior to his academic career, he was a C.P.A. He worked at Price Waterhouse and was also a financial analyst with Mobil. He was on the accounting and finance faculty at the Graduate School of Business of the University of Chicago for ten years, joining the Penn faculty in 1989. During the 2001–2002 academic year, he was a visiting professor at Harvard Business School. Since 1998 he has served as the academic director of Wharton’s Mergers and Acquisitions program. Professor Holthausen’s research interests include the effects of management compensation and governance structures on firm performance, the effects of information on volume and prices, corporate restructuring and valuation, the effects of large block sales on common stock prices, and numerous other topics. He is widely published in both finance and accounting journals and is currently an editor of the Journal of Accounting and Economics. His most recent work is entitled “Accounting Standards, Financial Reporting Outcomes and Enforcement” and appears in the Journal of Accounting Research (May, 2009, pp. 447-458) as part of the Conference on the Regulation of Securities Markets: Perspectives from Accounting, Law and Financial Economics.

Robert P. Inman, Richard King Mellon Professor of Finance, Professor of Finance and Economics, Business and Public Policy, Real Estate, The Wharton School

Professor Inman received his Ph.D. in economics from Harvard University and joined the Penn faculty in 1972. He is a research associate of the National Bureau of Economic Research. He has served as a consultant to the city of Philadelphia, the state of Pennsylvania, CitiGroup, Chemical Bank, the U.S. Department of the Treasury, the Financial and Fiscal Commission of the Republic of South Africa, the National Bank of Sri Lanka, the National Academy of Sciences, and numerous U.S. federal government agencies. His research is currently focused on fiscal federalism, the urban fiscal crisis, and the political and legal institutions of fiscal policymaking. Professor Inman held the Florence Chair in Economics at the European University Institute, Florence, Italy, for the spring quarter of 2000. He was a Visiting Scholar at the Rockefeller Foundation’s Bellagio Study Center, Fall 2007.

Richard E. Kihlstrom, Ervin Miller-Arthur M. Freedman Professor of Finance and Economics, Chairman, Finance Department, The Wharton School

Richard Kihlstrom holds a doctorate from the University of Minnesota. He has been a member of the Wharton faculty since 1979, was named to the Miller-Freedman professorship in 1986, and previously served as Chair of the Finance Department from 1988 to 1994. Before coming to Penn, he taught at Northwestern University, the University of Illinois, the State University of New York at Stony Brook, and the University of Massachusetts. He is a Fellow of the Econometric Society. His areas of research interest include information and uncertainty in economics, financial market equilibrium, and corporate finance.

Michael S. Knoll, Theodore K. Warner Professor of Law; Professor of Real Estate, The Wharton School; Co-Director, Center for Tax Law & Policy

Professor Knoll joined the Penn Law and Wharton faculties from the University of Southern California Law School in 2000. He teaches courses in corporate finance and taxation in the Law School, the Wharton School, and the Wharton Executive Program. He is also an affiliate of the Zell/Lurie Real Estate Center at the Wharton School, and the editor of Forensic Economic Abstracts, an electronic journal published by the Social Science Research Network. Professor Knoll’s undergraduate and J.D. degrees are from the University of Chicago. He also earned a Ph.D. in Economics at the University of Chicago. In 1990 he joined the USC Law faculty as an Assistant Professor, and in 1995 he was promoted to full Professor. He has been a Visiting Professor of Law at Georgetown (1999), Penn (1998–99), and Virginia (2000).


Professor Knoll was also a John M. Olin Senior Research Scholar at Columbia University School of Law (1996–97), a Visiting Scholar at New York University Law School (1996–97), and a John M. Olin Distinguished Visiting Professor of Law at Toronto University. He clerked for the Honorable Alex Kozinski on the U.S. Court of Appeals, Ninth Circuit, from January to August 1986, when he was appointed legal advisor to the Vice Chairman of the U.S. International Trade Commission. During 2009–2010, he was the Nathaniel Fensterstock Visiting Professor of Law at Columbia Law School. He has published extensively in the fields of corporate finance, taxation, economics, and real estate finance.

Friedrich K. Kübler, Professor and Director of the Banking Law Institute Emeritus, University of Frankfurt, Germany; Professor of Law

After earning a Dr. iur. from the University of Tübingen in 1961, Professor Kübler held appointments as teaching assistant in Tübingen and Paris; Professor of Law, University of Giessen (1966–70); Visiting Lecturer, Harvard Law School (1968–69); Professor of Law and Dean of the Graduate School of Social Sciences, University of Konstanz (1971–76); and Professor of Law, University of Frankfurt (1976–98). He first came to Penn in 1975 and again in 1983 as a Visiting Professor of Law, and in 1985 he joined the faculty as Professor of Law. He has served on the board of the Deutscher Juristentag and is a member of the American Law Institute. He was one of the six commissioners regulating concentration in the German television industry and is a member of the European Shadow Financial Regulatory Committee, as well as of the Frankfurt Academy of Arts and Sciences. Professor Kübler’s teaching interests are the European Union, corporations, international finance, and mass communication. His current (comparative) research interests are in the areas of corporate governance and finance, the supervision of transnational financial markets, and broadcast regulation.

Kristin Madison, Professor of Law

After receiving a J.D. from Yale Law School and a Ph.D. in economics from Stanford University, Kristin Madison joined the Penn Law faculty in 2001. She currently teaches contracts and health care law. Her main areas of research interest are health economics and the regulation of the health care industry. Professor Madison is currently studying the diffusion of new forms of health care regulation, particularly health care quality reporting requirements.

George J. Mailath, Walter H. Annenberg Professor in the Social Sciences, Professor of Economics, School of Arts and Sciences

Professor Mailath received his Ph.D. in economics from Princeton University in 1985. He is a Fellow of the Econometric Society, a member of the Council of the Game Theory Society, a co-founder of the journal Theoretical Economics, and is or has served as an associate editor or editorial board member of Econometrica, the

Review of Economic Studies, the Journal of Economic Theory, Games and Economic Behavior, the International Economic Review, and Economic Theory. He is co-editor of the Econometric Society Monograph Series and is a member of the Economics Advisory Panel of the National Science Foundation. His research interests include the organization of the firm, noncooperative game theory, evolutionary game theory, social norms, and the foundations of reputations, law, and authority.

Charles W. Mooney, Jr., Charles A. Heimbold, Jr. Professor of Law

Professor Mooney received his J.D. from Harvard Law School in 1972. He practiced law with the Oklahoma firm of Crowe and Dunlevy and as a partner of the New York firm of Shearman & Sterling. Professor Mooney joined the Penn faculty in 1986, and during 1999 and 2000 he served as Interim Dean of the Law School. From 1998 to 2000 and from 2008 to 2009 he served as Associate Dean for Academic Affairs. He is an active member of the American Law Institute and the American Bar Association. He served as a member of the Uniform Commercial Code Permanent Editorial Board Article 2 (Sales) Study Committee and also served as a reporter for that Board’s Article 9 (Secured Transactions) Study Committee and as a reporter for the Revised Article 9 drafting committee. He served as a member of the U.S. Security and Exchange Commission’s Advisory Committee on Market Transactions. Mooney was awarded the Distinguished Service Award, presented by the American College of Commercial Finance Lawyers. He also served as U.S. Delegate and Position Coordinator (appointed by U.S. Department of State) at the Diplomatic Conference for the Cape Town Convention on International Interests in Mobile Equipment and the Protocol on Matters Specific to Aircraft Equipment, in Cape Town, South Africa. He currently serves as a U.S. Delegate for the UNIDROIT draft convention on intermediated securities. His current research centers on intermediated securities, security interests in bank-ruptcy, and bankruptcy theory.


Robert H. Mundheim, University Professor of Law and Finance Emeritus, University of Pennsylvania; Of Counsel, Shearman & Sterling; formerly General Counsel, U.S. Treasury and Senior Executive Vice President and General Counsel of Salomon Smith Barney Holdings, Inc.

Professor Mundheim received his LL.B. from Harvard Law School in 1957. He joined the New York firm of Shearman & Sterling, of which he is now Of Counsel, and then served as special counsel to the U.S. Securities and Exchange Commission before joining the Penn faculty in 1965. Professor Mundheim served as Dean of the Law School from 1982 to 1989. He has been a visiting professor at Harvard Law School, UCLA Law School, the James E. Rogers College of Law at The University of Arizona, and the University of Konstanz in Germany. Between 1977 and 1980, he served as general counsel to the U.S. Department of the Treasury. He also has served as chairman of the U.S. Tax Court Nominating Commission, a director of the Securities Investor Protection Corporation, and general counsel to the Chrysler Loan Guarantee Board. He was co-chairman of the New York firm Fried, Frank, Harris, Shriver and Jacobson from 1989 to 1992. In 1992, he joined Salomon Inc. as its General Counsel and as a Managing Director and member of the Executive Committee of Salomon Brothers. Professor Mundheim is the organizer and presiding officer emeritus of the International Faculty for Corporate and Capital Market Law, a former Trustee and President of the American Academy in Berlin, a Trustee of the New School University, a former director and President of the Appleseed Foundation, and a member of the Council of the American Law Institute and Chairman of its Governance Committee. He also serves on the American Bar Association’s Standing Committee on Ethics and Professional Responsibility. He most recently served as the chairman of the Quadra Realty Trust Board of Directors and as a director of eCollege, Inc. and of Arnhold & S. Bleichroeder Holdings, Inc. He is also the Chairman of the Legal Advisory Board of NASDAQ. Mr. Mundheim has served as a Consultant to the American Law Institute’s Principles of Corporate Governance: Analysis and Recommendations (1978–1994), as a member of the American Bar Association President’s Task Force on Corporate Responsibility (2002–2003), and as a member of the Association of the Bar of the City of New York’s Presidential Task Force on Lawyers’ Role in Corporate Governance. He has written in the areas of corporate governance, securities regulation, corporations, and professional responsibility.

David K. Musto, Ronald O. Perelman Professor in Finance, The Wharton School

David K. Musto is the Ronald O. Perelman Professor in Finance at the Wharton School, where he has been on the faculty since 1995. He has a B.A. from Yale University and a Ph.D. from the University of Chicago, and between college and graduate school he worked for Roll and Ross Asset Management in Los Angeles. He is an editor of the Journal of Financial Services Research and an Associate Editor of the Journal of Finance. Most of his work, both theoretical and empirical, is in the area of consumer financial services, mutual funds and consumer credit in particular. He has also published work on corporate and political voting, option pricing, short selling, and cross-border taxation.

Gideon Parchomovsky, Professor of Law

Professor Parchomovsky received his LL.B. from the Hebrew University of Jerusalem in 1993, his LL.M. from the University of California at Berkeley in 1995, and his S.J.D. from Yale Law School in 1998. Prior to joining the Penn Law faculty in fall 2002, Professor Parchomovsky served as an Associate Professor at Fordham Law School and a Visiting Lecturer at Yale Law School. His research interests include intellectual property law and property theory. His recent work focuses on unlocking synergies among sub-fields of intellectual property and devising innovative mechanisms for protecting property entitlements.

Andrew W. Postlewaite, Harry P. Kamen Professor of Economics, School of Arts and Sciences; Professor of Finance, The Wharton School

Professor Postlewaite received his Ph.D. from Northwestern University in 1974 and joined the Penn faculty from the University of Illinois in 1980. He is editor of American Economic Journal: Microeconomics, past editor of the International Economic Review and past co-editor of Econometrica. He serves on the Board of Directors of the National Bureau of Economic Research, the Executive Committee of the Game Theory Society, and on the Executive Committee of the American Economic Association. He has published widely in the areas of strategic behavior and industrial organization.


Michael R. Roberts, Associate Professor of Finance, The Wharton School

Michael R. Roberts is a tenured Associate Professor of Finance at the Wharton School of the University of Pennsylvania. Professor Roberts earned his B.A. in Economics from the University of California at San Diego, and his M.A. in Statistics and Ph.D. in Economics from the University of California at Berkeley. In addition to his experience at the Wharton School, he has taught at Duke University’s Fuqua School of Business. His primary research is in the area of corporate finance and in particular: capital structure, investment policy, financial contracting, and payout policy. Recent work has examined issues including the design of debt securities and the role of control rights in influencing financial and investment policy. His research has received several awards including the Brattle Prize for Distinguished Paper published in the Journal of Finance, and Best Paper awards at the Financial Management Association and Southwestern Finance Association annual conferences. In addition to his research, Professor Roberts has earned a number of teaching awards including the Daimler-Chrysler Core Teaching Award at the Fuqua School of Business and the David W. Hauk Award for Outstanding Teaching at the Wharton School. He has taught undergraduate, M.B.A., Ph.D., and executive education courses in corporate finance, econometrics, and statistics. Prior to joining academia, Professor Roberts was a Financial Engineer at Financial Engineering Associates Inc. and a Senior Analyst for Regional Economic Research Inc.

Edward B. Rock, Saul A. Fox Distinguished Professor of Business Law; Co-Director, Institute for Law and Economics

Professor Rock received his J.D. from the University of Pennsylvania in 1983. He joined the Penn faculty in 1989 from the Philadelphia law firm of Fine, Kaplan and Black, where he specialized in antitrust, corporate, and securities litigation. He has written widely in corpo-rate law, on topics including: hedge funds; the role of institutional investors in corporate governance; close corporations; the role of norms in corporate law; the overlap between corporate law and antitrust; the overlap between corporate law and labor law; comparative corporate law; and the regulation of mutual funds. In 1994, Professor Rock was a Visiting Professor of International Banking and Capital Markets at the Institut für Arbeits-, Wirtschafts- und Zivil Recht, Johann Wolfgang Goethe-Universität, Frankfurt am Main, Germany. During the 1995–96 academic year, he was a Fulbright Senior Scholar and Visiting Professor of Law at the Law Faculty of the Hebrew University of Jerusalem, Israel. In 2001, he was appointed the first Saul A. Fox Distin-guished Professor of Business Law. During 2005–06, he was again a Visiting Professor of Law, and Lady Davis Fellow, at Hebrew University. Professor Rock’s current research focuses on govern-ment ownership of corporations, mergers and acquisitions, hedge funds, and corporate voting.

Chris W. Sanchirico. Professor of Law; Professor of Business and Public Policy, The Wharton School

Professor Sanchirico received his A.B. from Princeton and both his law degree and his Ph.D. in economics from Yale. Before joining the Penn Law and Wharton faculties in 2003, he was a law professor at the University of Virginia and an economics professor at Columbia. Professor Sanchirico has written widely on tax policy, distributive justice, the information problems of legal enforcement, the rules governing trial evidence and pretrial discovery, and the evolution and stability of social norms. Professor Sanchirico has published extensively in top law reviews as well as the premier peer-reviewed journals in both law and economics and economic theory.

Reed Shuldiner, Alvin L. Snowiss Professor of Law

Professor Shuldiner is a recognized expert in the taxation of financial instruments and transactions. His area of research is taxation and tax policy. His current research includes the taxation of risk under income, wealth and consumption taxes, and the viability and effects of a federal wealth tax (with David Shakow). Professor Shuldiner served as Associate Dean at Penn Law from 2000–02. During spring 2005, Professor Shuldiner was the William K. Jacobs, Jr. Visiting Professor of Law at Harvard Law School. He was a Visiting Assistant Professor at Yale Law School during 1994–95. Before joining the Penn law faculty in 1990, he served in the Office of Tax Legislative Counsel of the U.S. Depart-ment of the Treasury, was counsel to the law firm of Cadwalader, Wickersham and Taft, and was an associate with the Washington, D.C., law firm of Wilmer, Cutler and Pickering. Professor Shuldiner received his J.D. from Harvard University in 1983 and his Ph.D. in economics from the Massachusetts Institute of Technology in 1985.

David A. Skeel, Jr., S. Samuel Arsht Professor of Corporate Law

Professor Skeel joined the Penn faculty in 1999. He graduated in 1987 from the University of Virginia School of Law, where he was editor of the Virginia Law Review and a member of the Order of the Coif. He clerked for the Honorable Walter K. Stapleton on the U.S. Court of Appeals for the Third Circuit, and practiced for several years at Duane, Morris & Heckscher in Philadelphia, before joining the Temple University School of Law in 1990. Professor Skeel has also held visiting appointments at the University of Wisconsin Law School (1993–94), the University of Virginia School of Law (spring 1994), Georgetown University Law Center (fall 2004), and the University of Pennsylvania Law School (fall 1997). Professor Skeel specializes in corporate and commercial law and has written widely on corporate law, bankruptcy, and sovereign debt. He has also has written on law and religion, and poetry and law.


Michael L. Wachter, William B. Johnson Professor of Law and Economics; Co-Director, Institute for Law and Economics

Professor Wachter received his Ph.D. in economics from Harvard University and joined the Penn faculty in 1970. He has held full professorships in three of Penn’s schools: the School of Arts and Sciences, where he has been professor of economics since 1976; the Wharton School, where he was professor of management, 1980–92; and the Law School, where he became professor of law and economics in 1984. He has been senior advisor to the Brookings Panel on Economic Activity in addition to consulting for the Federal Reserve’s Board of Governors and the Council of Economic Advisors. He has also served as a member of the National Council on Employment Policy and as a commissioner on the Minimum Wage Study Commission. Professor Wachter served as Deputy Provost of the University of Pennsylvania from July 1995 to January 1998, and as Interim Provost from January to December 1998. He is the author of numerous articles in law and economics, as well as in corporation law and labor law and economics.

Susan M. Wachter, Richard B. Worley Professor of Financial Management, Professor of Real Estate and Finance, The Wharton School; Co-Director, Institute for Urban Research

From 1998 to 2001, as Assistant Secretary for Policy Development and Research, U.S. Department of Housing and Urban Develop-ment, Dr. Wachter served as the senior urban policy official and principal advisor to the Secretary on overall HUD policies and programs. At Wharton, Dr. Wachter was Chairperson of the Real Estate Department and Professor of Real Estate and Finance from July 1997 until her 1998 appointment to HUD. She founded and currently serves as Director of Wharton’s Geographical Information Systems Lab. Dr. Wachter served as a member of the Board of Directors of the Beneficial Corporation from 1985 to 1998 and of the MIG Residential REIT from 1994 to 1998. She was the editor of Real Estate Economics from 1997 to 1999 and serves on the editorial boards for several real estate journals. Dr. Wachter has been a member of the Advanced Studies Institute of the Homer Hoyt Institute since 1989. She is author of more than 100 scholarly publications and is the recipient of several awards for teaching excellence at the Wharton School.

Amy Wax, Robert Mundheim Professor of Law

A graduate of Yale College and Harvard Medical School, Professor Wax trained as a neurologist at New York Hospital before completing a law degree at Columbia Law School in 1987. She served as a clerk to the Honorable Abner J. Mikva of the U.S. Court of Appeals for the D.C. Circuit and worked for six years at the Office of the Solicitor General at the U.S. Department of Justice, where she argued 15 cases before the U.S. Supreme Court. She taught from 1994 to 2001 at the University of Virginia Law School. Her areas of teaching and research include civil procedure, remedies, labor and employment law, poverty law and welfare policy, the law and economics of work and family, and social science and the law. Professor Wax joined the Penn Law Faculty in fall 2001.

Bilge Yilmaz, Associate Professor of Finance, The Wharton School

Bilge Yılmaz is an Associate Professor of Finance at the Wharton School. Prior to his current appointment, he taught at the Graduate School of Business, Stanford University, and held visiting positions at the University of Chicago and INSEAD. He received his BS degrees in Electrical Engineering and Physics from Bogaziçi University, and his PhD in Economics from Princeton University. His research focuses on corporate finance, political economy and game theory. Recently, he has published articles on the inefficiency of tender offers, optimal security design, corporate bankruptcy, strategic trading, and predatory lending. His current research interests also include corporate governance and private equity.

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institute for law and economics 48 associate faculty institute for law and economics 49 ile investors

ILE Investors, 2009–2010funding for the institute for law and economics comes from a diverse group of individuals, law firms, corporations, and foundations who endorse our work each year. we are pleased and privileged to recognize and thank the ile investors whose generous contributions underwrite the activities described in this report. we deeply appreciate their support and their active participation in institute programs.

Benefactors$25,000 or aboveCharles I. CogutRobert L. FriedmanPaul G. Haaga, Jr.Skadden, Arps, Slate, Meagher & Flom LLPSullivan & Cromwell LLP

Sponsors$10,000 to $24,999Apollo Capital Management, L.P.AQR Capital Management, LLCBarclays Capital AmericasBernstein Litowitz Berger & Grossmann LLPCadwalader, Wickersham & Taft LLPIsaac D. CorréCravath, Swaine & Moore LLPCT, a Wolters Kluwer BusinessDechert LLPDelaware Department of StateDewey & LeBoeuf LLPDuPontStephen Fraidin

Joel E. FriedlanderGibson, Dunn & Crutcher LLPGoldman, Sachs & Co.Perry GolkinGrant & Eisenhofer P.A.Hughes Hubbard & Reed LLPInnisfree M&A IncorporatedRoy J. KatzoviczMacKenzie Partners, IncMerck & Co., Inc.Millennium Management FoundationMorgan, Lewis & Bockius LLPMorris, Nichols, Arsht & Tunnell LLPPaul, Weiss, Rifkind, Wharton & Garrison LLP Potter Anderson & Corroon LLPProskauer Rose LLPAllan N. Rauch Richards, Layton & Finger, P.A.Rothschild Inc.Schulte Roth & Zabel LLPA. Gilchrist Sparks IIISungard Data Systems Inc.UBS Investment Bank

VanguardWachtell, Lipton, Rosen & KatzYoung Conaway Stargatt & Taylor, LLP

Members$5,000 to $9,999James H. AggerBlank Rome LLPHarkins Cunningham LLPLeon C. Holt, Jr.

DonorsUp to $4,999Covington & BurlingChristopher FouldsMary J. GrendellJames A. OunsworthMyron J. ResnickJohn F. SchmutzSimpson Thacher & Bartlett LLPKonstantin VertsmanEric WilenskyGregory P. WilliamsKenneth W. Willman

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