Risk-shifting Through Issuer Liability and Corporate Monitoring

This article explores how issuer liability re-allocates fraud risk and how risk allocation may reduce the incidence of fraud. In the US, the apparent absence of individual liability of officeholders and insufficient monitoring by insurers under-mine the potential deterrent effect of securities litigation. The underlying reasons why both mechanisms remain ineffective are collective action problems under the prevailing dispersed ownership structure, which eliminates the incentives to moni-tor set by issuer liability. This article suggests that issuer liability could potentially have a stronger deterrent effect when it shifts risk to individuals or entities holding a larger financial stake. Thus, it would enlist large shareholders in monitoring in much of Europe. The same risk-shifting effect also has implications for the debate about the relationship between securities litigation and creditor interests. Credi-tors’ claims should not be given precedence over claims of defrauded investors (e.g., because of the capital maintenance principle), since bearing some of the fraud risk will more strongly incentivise large creditors, such as banks, to monitor the firm in jurisdictions where corporate debt is relatively concentrated

Collective bargaining unity and fragmentation in Germany: two concepts of trade unionism?

In recent years established collective bargaining arrangements in some sectors in Germany have been challenged by an upsurge of sectional union activity that has contested the status of industry-level incumbents. Gauging the impact of this development has proved difficult for both observers and insiders, with a range of responses from labour market actors and government. This article explores recent developments and actor responses and locates them in the wider context of the German political economy. It argues that of all these actors trade unions, in particular in organized forms of capitalism, are confronted by strategic dilemmas related to managing the difficult ‘variable geometry’ of mobilization and systemic accommodation

Inducible DNA-loop formation blocks transcriptional activation by an SV40 enhancer

It is well established that gene expression in eukaryotes is controlled by sequence-dependent binding of trans-acting proteins to regulatory elements like promoters, enhancers or silencers. A less well understood level of gene regulation is governed by the various structural and functional states of chromatin, which have been ascribed to changes in covalent modification of core histone proteins. And, much on how topological domains in the genome take part in establishing and maintaining distinct gene expression patterns is still unknown. Here we present a set of regulatory proteins that allow to reversibly alter the DNA structure in vivo and in vitro by adding low molecular weight effectors that control their oligomerization and DNA binding. Using this approach, we completely regulate the activity of an SV40 enhancer in HeLa cells by reversible loop formation to topologically separate it from the promoter. This result establishes a new mechanism for DNA-structure-dependent gene regulation in vivo and provides evidence supporting the structural model of insulator function