eBriefing

New Wall Street Cop Won't Slash & Burn

By Eve Tahmincioglu

The man chosen by President Donald J. Trump to lead the nation’s agency that polices Wall Street is expected to be less of an enforcer of financial regulations than his predecessor, and will likely focus on ways to prop up the decline in the number of publicly traded companies.

But few expect Jay Clayton, the new chairman of the Securities and Exchange Commission, who brings with him a background as a deal-making attorney, to set financial market rules ablaze.

“I don’t see him slashing and burning regulations,” says N. Peter Rasmussen, a senior legal editor for  Bloomberg BNA. There are definitely changes ahead, he adds, “but Clayton is not an ideologue. I don’t see him cutting regulations just to cut.”

The key move to watch, he continues, is how Clayton appoints at the SEC’s lead enforcer.

Global Cyber Attack: Boardroom Wakeup Call

By Judy Selby

The  global cyber attack should be a boardroom wakeup call. When cybersecurity breaches occur fingers are increasingly being pointed toward the board of directors and top management.

In its new cybersecurity regulation, New York State's powerful Department of Financial Services squarely put responsibility for cybersecurity on the shoulders of directors and senior officers, requiring them to approve a mandatory cybersecurity policy and certify regulatory compliance. 

And earlier this year, Yahoo revealed its general counsel resigned following an internal investigation that concluded that its recent data breach "was not properly investigated and analyzed at the time, and the company was not adequately advised with respect to the [associated] legal and business risks."  In addition, Yahoo's CEO Marissa Mayer agreed to forgo her annual bonus and equity grant because the breach took place during her tenure; and recently it was announced she’s leaving the company.

Is Your Board Prepared for Trump Twitter Tirade?

By Doug Chia and Gary Larkin

One of President Donald Trump’s favorite Twitter targets is public companies, and as a result companies and boards face a risk that few anticipated: being in the crosshairs on social media. We call this the Trump Twitter Tirade.

Lockheed Martin made headlines when Trump took to the digital bully pulpit and blasted the “out-of-control” cost of its F-35 fighter jet program. 

At Ford, market capitalization fell by $28 million after Trump took a 140-character swipe at the automaker for planning to move a plant to Mexico. 

And on the flipside, a Trump tweet storm against Nordstrom – the retailer that dropped his daughter Ivanka’s fashion products – actually buoyed the company’s shares right after. 

By using his @realDonaldTrump and @POTUS Twitter handles, President Trump has shown that almost any company is fair game for direct and unfiltered feedback from the “leader of the free world.” And it doesn’t matter if the tweet compliments or castigates; without a doubt, the risk far outweighs any possible opportunity. In addition to Lockheed, Ford and Nordstrom, just ask the CEOs and directors from LL Bean, Carrier, General Motors, Boeing,  The New York Times, and CNN, who’s organizations have also been ended up on the president’s Twitter feed.

We see the Trump Twitter Tirade impacting three areas fundamental to a company’s business.
 

The Golden State of Governance

Mutual Funds Up Investments in Private Companies

By Eve Tahmincioglu

Mutual funds largely invest in publicly traded corporations, but  a new report finds an increase in private company investments.

That infusion of money from mutual funds may be delaying some private firms from going public, according to the findings of  Mutual Fund Investments in Private Firms, a recently published report put out by professors at Drexel University’s LeBow College of Business and the University of Iowa.

“We tend to think of these funds focusing on the public firm,” explains  Michelle Lowry, a coauthor of the study and finance professor at LeBow. “We’re seeing it move into the private space, and at the same time we have private companies reluctant to go public as early as they might have 10 to 15 years ago.”