When the Government Attempts to Change the Board, Investors Should Know

68 Pages Posted: 19 Jul 2013

See all articles by William Fisher

William Fisher

University of Richmond - School of Law

Date Written: July 17, 2013

Abstract

In 2008 and 2009, the federal government effectively hired and fired directors at American International Group and Bank of America. At AIG, the government exercised its power through the ownership of voting stock, which meant that the company’s public securities filings revealed the government influence, though at times slowly and at times only by inference. At BofA, by contrast, the government imposed its will through an unpublished bank regulatory action, and no securities filing provided even a hint of the federal role. The fact that current law allows the government to secretly reconstitute the governing bodies of multi-billion-dollar, publicly traded companies is cause for concern, for who controls the board controls the company. This article argues that, just as securities filings alert investors when private parties attempt board change, a new required filing should inform investors when the government seeks to push sitting directors out or bring new ones in.

JEL Classification: G18, G28, G38, K22

Suggested Citation

Fisher, William, When the Government Attempts to Change the Board, Investors Should Know (July 17, 2013). Pepperdine Law Review, Vol. 40, No. 533, 2013, Available at SSRN: https://ssrn.com/abstract=2294966

William Fisher (Contact Author)

University of Richmond - School of Law ( email )

28 Westhampton Way
Richmond, VA 23173
United States
804-287-6450 (Phone)
804-289-8992 (Fax)

HOME PAGE: http://law.richmond.edu/people/faculty/bfisher/

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
48
Abstract Views
536
PlumX Metrics