The long-time debate between stakeholderism and shareholderism is becoming far more in favor of stakeholderism due to the increasing importance of Environmental, Social and Governance (“ESG”) initiatives. Shareholderism is the traditional school of thought that the responsibility of a corporation is to the shareholders only. Stakeholderism has been challenging this view with the idea that the responsibility of a corporation is to benefit all of its stakeholders – customers, employees, suppliers, communities and shareholders. The Chairman and CEO of Blackrock, one of the largest asset management companies in the world, recently wrote a letter to CEO’s emphasizing the importance of ESG to investors and the public. (Larry Fink, Blackrock).
Read MoreThe 2020 presidential election between President Donald Trump and former Vice-President Joe Biden marked a highly contentious race with a record-setting $14 billion in election spending between the two candidates. (Brian Schwartz, CNBC). After days of ballot-counting, former Vice-President Joe Biden was declared the president-elect of the United States (“U.S.”). (Scott Detrow and Asma Khalid, NPR). This article will address how a Biden Presidency may change financial regulations and the resulting impact these changes will have on the securities market.
Read MoreOne of the more recent investing trends that has gained a foothold in financial markets is Environmental, Social, and Governance (“ESG”) investing. The trend represents a shift in the investment community, focusing on how investments can help increase environmental, social, and corporate governance goals rather than unchecked profitability. While ESG investing has seen increased participation in the last few years, the trend is not without objection, both from industry peers and regulatory bodies alike.
Read MoreThe 2020 presidential election could trigger an overhaul of private equity regulations, as the Democratic party, if elected into the White House, could unwind the Trump administration’s deregulation efforts. (APK Metropolitan News). The private equity industry is no stranger to change; the past ten years have brought dramatic changes to the industry. First, the private equity industry has grown considerably. The 2020 McKinsey Global Private Equity Markets Review reported there are now approximately 7,000 private equity firms, a 40% increase since 2010. (MJ Hudson). The Securities and Exchange Commission (“SEC”) estimated $2.7 trillion was raised in private markets in 2019, compared to the $1.2 trillion raised in public markets. (Zach Gibson, The Wall Street Journal).
Read MoreWhen companies exert too much power over the marketplace, governments will step in to ensure fairness to consumers. This has happened to utilities, telecommunications, and now it may happen with social media companies.
On August 22, 2012, the Federal Trade Commission (“FTC”) announced that it had “closed its investigation of Facebook’s proposed acquisition of Instagram, [and that] the deal may proceed as proposed.” (Federal Trade Commission). Now, the FTC is second-guessing its blessing of Facebook’s major acquisitions, Instagram and WhatsApp, and is gearing up to file an antitrust lawsuit against Facebook. (Kendall et. al., Wall Street Journal). Facebook’s previously unchecked acquisition practices have sparked inquiry into whether Facebook is purchasing startups to keep them from competing with the company. Id. Facebook has acquired an astounding amount of businesses, roughly 90 companies over the past 15 years. Id. If the FTC concludes that the company is engaging in practices that reduce competition, Facebook could face severe repercussions, ranging from required divestitures to reduced ability to fully integrate its acquisitions. (Jamshed & Akins, S&P Global Market Intelligence).
Read MoreAs the pressure for clean alternatives to conventional gas-powered vehicles mounts, entrepreneurs, such as Elon Musk, have transformed the electric-powered vehicle industry into a future-oriented marketplace and are making electric vehicles accessible for Americans. For example, Tesla Motors (“Tesla”) is now the number one electric automaker in the United States (“U.S.”). Tesla makes up 35% of the electric vehicle market, beating traditional companies such as General Motors and Ford. (Edison Electric Institute). With success comes competition. In 2014, Trevor Milton founded Nikola Corporation (“Nikola”), which manufacturers semi-trucks and pick-up trucks powered by hydrogen and electric batteries, in competition with Tesla’s electric Cybertruck. (Forbes). However, as of June 2020, Nikola was worth $23 billion despite having zero sales and zero revenues and Trevor Milton has been accused of misrepresenting the company’s technology to investors. (Id.; Graham Rapier, Business Insider).
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