Rule 10b-5 and the Corporation’s Affirmative Duty to Disclose

In order to make responsible investment decisions investors must be adequately informed. In this article Professor Bauman argues that the existing disclosure requirements of the federal securities laws do not meet the informational needs of investors because there is no affirmative duty to disclose all material information. In order to fill this substantial gap in the existing disclosure scheme, Professor Bauman argues that rule lob-5 should be read to require prompt disclosure of all material information subject only to limited exceptions and should be applicable even in the absence of trading or prior inaccurate disclosure

The Changing Odds of the Chancery Lottery

Delaware is home to the majority of shareholder class action litigations related to mergers and acquisitions (M&A). These cases usually result in settlements that provide shareholders with only disclosure in exchange for a broad release of future claims, which encompasses unknown and federal security claims. The Delaware Court of Chancery must review and approve these settlements under Delaware Rule 23(e), which has been interpreted as creating a fiduciary duty for the court to protect the interests of absent shareholders. Nevertheless, Delaware has a history of routinely approving disclosure-only settlements with laxity. Recently, members of the court have begun discussing the issues with this process and, in some cases, have begun rejecting settlements that were previously likely to be approved. This active discussion, combined with the discretion given to the individual members of the court to make their own business judgment, has resulted in each developing their own method of reviewing disclosure-only settlements and applying their fiduciary duty. After developing a backdrop of the prototypical M&A case and the rules that define the court’s role, this Note reviews recent decisions of each member of the court in order to understand their individual method of reviewing settlements and how they apply their duty to shareholders in this process. This Note then identifies the interest group theory as a potential explanation for the external factors that may influence the court’s diverging methodologies. This Note concludes that in order to create a more consistent standard that fully applies the court’s fiduciary duty to shareholders, the Court of Chancery should (1) adopt a new materiality standard based on the merits of the case at filing, and (2) limit approval to settlements that have releases that are proportional to the relief provided to shareholders

Disasters and Disclosures

Many securities fraud lawsuits follow corporate disasters of some sort or another, claiming that known risks were concealed prior to the crisis. Yet for a host of doctrinal, pragmatic and political reasons, there is no clear-cut duty to disclose these risks. The SEC has imposed a set of requirements that sometimes forces risk disclosure, but does so neither consistently nor adequately. Courts in 10b-5 fraud-on-the-market cases, in turn, have made duty mainly a matter of active rather than passive concealment and thus, literally, wordplay: there is no fraud-based duty to disclose risks unless and until the issuer has said enough to put the particular kind of risk “in play.” But when that is, and why, flummoxes them. This incoherence could be rationalized by a more thoughtful assessment of how words matter to investors and better appreciation of the variable role that managerial credibility plays in the process of disclosure and interpretation, which is the main focus of this article. Disasters are an ideal, if disturbing, setting for thinking through the micro-structure of corporate discourse—the implicit rules of interpretation for how marketplace actors interpret what issuers say and don’t say, whether in formal SEC disclosures, conference calls, press conferences and even executive tweets. But even if there is more thoughtfulness to the endeavor, it is fair to ask why wordplay should make so much of a difference as to duty in the first place, or whether instead our impoverished conception of duty and its links to scienter, reliance and causation deserve a more thorough makeover. The study of disasters and disclosures also offers a distinctive reference point for thinking about contemporary controversies associated with bringing matters of social responsibility (e.g., law abidingness) and sustainability (environmental compliance, cybersecurity, product safety, etc.) into the realm of securities law

Anti-Employer Blogging: Employee Breach of the Duty of Loyalty and the Procedure for Allowing Discovery of a Blogger’s Identity Before Service of Process Is Effected

The rapid rise in anonymous anti-employer internet blogs by disgruntled employees has created a tension between the liberty interests of employees in free speech and privacy and employers\u27 rights to be free from defamation, disparagement and disclosure of confidential information by an employee. This iBrief argues that the anonymity of anti-employer bloggers should not shield employees from breach of the duty of loyalty claims under tort and contract law, and that Congress should enact rules to govern the disclosure of blogger identity

Disclosure Provisions of the Model Business Corporation Act

Keller discusses the duty of disclosure provision of the Model Business Corporation Act (MBCA). The development of disclosure requirements through decisional law rather than through statutory prescriptions highlights the important question of when corporate law should be codified legislatively and when it should be left to case-by-case judicial development. The American Bar Association\u27s Committee on Corporate Laws ( the Committee ) confronted this question when considering disclosure requirements as part of its continuing evaluation of the MBCA

Common-Law Disclosure Duties and the Sin of Omission: Testing the Meta-Theories

This Article represents the first attempt to study empirically the factors that cause courts to impose disclosure duties on bargaining parties in some circumstances, but not in others. We analyze data coded from 466 decisions spanning a wide array of jurisdictions and covering over two hundred years. The results are mixed. In some instances our data support the conventional wisdom relating to common-law disclosure duties. For example, we find that courts are more likely to require the disclosure of latent, as opposed to patent, defects and are more likely to require disclosure when the parties are in a fiduciary or confidential relationship. In other instances, our results cast doubt on much of the conventional wisdom regarding the law of fraudulent silence. First, although it is generally understood that courts have become more likely to impose disclosure duties over time, we find that courts actually have become less likely over time to impose duties to disclose. Second, and perhaps most importantly, we find that courts are no more likely to impose disclosure duties when the information is casually acquired as opposed to deliberately acquired, and that unequal access to information by the contracting parties is not a significant factor that drives courts to find a duty to disclose. We do find, however, that when both factors are present courts are significantly more likely to force disclosure

How much the act of secrecy is done by medical staff? A descriptive cross-sectional survey in south of Iran

Some information may be gathered during the medical procedures, including medical records or personal information. Many of them can be considered as secrets. The medical staff has the duty of privacy, which means keeping the secrets away from a third party. Hippocratic Oath accepts no exceptions but modern ethical express the situations in which the disclosure of secrets is allowed, legal, or even necessary. The present study is about to evaluate the act of secrecy in medical staff of the tertiary health care centers affiliated with Jahrom University of Medical Sciences in south of Iran. This cross sectional study is done on 204 members of medical staff of 8 different wards in tertiary health care centers affiliated with Jahrom University of Medical Sciences in south of Iran, using a questionnaire of 31 questions in 5 major categories adding to a data sheet for demographic information (age, gender, ward). Validity and reliability of the questionnaire was proved by previous studies. Collected data analyzed by dependent T-test, Fisher's exact and SPSS.17 using descriptive and deductive statistics. The mean rate of secrecy was 3.82± 0.75. Respecting others in the category of "goals of secrecy" earned 4.48, common medical services in the category of "reasons for disclosure" earned 3.89, damage to the patient in the category of "legal reasons for disclosure" earned 4.05, patient's rights in "personal reasons for secrecy" earned 4.07, and informing the medical managers in "proper way to confront the offenders" with the score 2.85 were the highest scores of each category. The variant Ages (p=0.003) and wards (p=0.03) showed significant differences in the secrecy. Results show that the medical staff is not familiar enough to the legal and ethical indications of secrecy, so holding in-service courses may be effective

Automatic control of clock duty cycle

In general, this disclosure is directed to a duty cycle correction (DCC) circuit that adjusts a falling edge of a clock signal to achieve a desired duty cycle. In some examples, the DCC circuit may generate a pulse in response to a falling edge of an input clock signal, delay the pulse based on a control voltage, adjust the falling edge of the input clock signal based on the delayed pulse to produce an output clock signal, and adjust the control voltage based on the difference between a duty cycle of the output clock signal and a desired duty cycle. Since the DCC circuit adjusts the falling edge of the clock cycle to achieve a desired duty cycle, the DCC may be incorporated into existing PLL control loops that adjust the rising edge of a clock signal without interfering with the operation of such PLL control loops

The Right for Autonomy, the Duty of Disclosure and Public Health Considerations – The 2013 Polio Crisis in Israel as a Case Study

Despite sharing the same theoretical framework of discussion with other papers, this paper addresses an ethical and legal issue that has received little attention in academic and public discourse: the duty of disclosure in the context of vaccinations. In particular, the paper addresses the question whether public health considerations provide a justification for restricting the duty of disclosure in the case of vaccination. Delimitating the research question to the issue of disclosure has several implications. First, the decision to vaccinate the population with bOPV as describe above and the decision to adopt a voluntary vaccination policy are not the focus of this paper, and they will not be critically discussed. Therefore, both of these decisions are accepted as reasonable and valid. Second, whether parents’ right to make decisions regarding the health of their children—that is, their right for parental autonomy—prevails in the context of vaccinations will also not be addressed. Third, the paper addresses one aspect of the communication strategy adopted by the Israeli Ministry of Health: the nature and content of the information provided to the public. Other aspects of the communication strategy, while important, exceed the scope of the paper. Such aspects include the methods used to disseminate the information; the use of nonverbal techniques; the identity of the persons providing the information; and nature of persuasion efforts addressed to parent

The Past and Future of English Insurance Law: Good Faith and Warranties

This article reviews the current state of English insurance law applied to the duty of utmost good faith, in particular the assured's duty of full and accurate disclosure, and to insurance warranties, and examines the adequacy of the proposals made by the Law Commission for the reform of the law in both instances. Whilst recognising that there is a case for some reform, the reform recommended by the Law Commission is considered to extend beyond the bounds of what is necessary for the just and rational alteration of the law. In summary, the duty of utmost good faith requires no substantive reform as to the existence or scope of the duty, but does require a change by which the Courts will have the power to exercise a discretion to achieve a flexible remedial response to any breach of the duty. The principal reform which would benefit the law of warranties should concentrate on the clarity of the language in which the warranty is expressed and to identify the circumstances in which a true promissory warranty may be said to exist