When the bond market went crazy last week, bankers had an explanation: too much regulation. Sure, why not? If you’re looking for a scapegoat, you can’t go wrong with overregulation. It’s like Starbucks, ubiquitous and convenient.
One of the most interesting supporting actors in the Allergan takeover drama is Goldman Sachs, which is a financial adviser (along with BofA Merrill Lynch) to the Botox maker. Goldman is known for defending takeover targets, so it made sense when Allergan brought in the bank to help it fend off a joint hostile advance from the Canadian pharmaceutical company Valeant and the hedge fund Pershing Square.
Professor Randall Thomas of Vanderbilt Law studies M&A class action litigation. To him, it’s obvious that some plaintiffs’ firms file these now ubiquitous suits simply to collect a so-called “deal tax” and others work the cases hard to win better terms for shareholders. Yet commentary on M&A class actions tends not to distinguish among shareholders’ firms, he said. “It always bothered me that all plaintiffs’ firms are painted with the same brush – they’re either shareholder champions or scum of the earth,” Thomas told me. “The reality is that there are big differences.”
If you are the most profitable corporate law firm in recorded history, with a habit of loudly defending the business judgment of corporate boards, you have to expect to take more than your share of shots. Wachtell Lipton Rosen & Katz is the Goldman Sachs of the law biz: When someone claims the firm has done something wrong, it’s news.
I’ll admit it: I was among the predictors of doom last year when a three-judge panel of the 3rd U.S. Circuit Court of Appeals issued its decision in Carrera v. Bayer. The Carrera decision, as you may recall, addressed the requirement that class membership be “ascertainable” in order for class actions to be certified. The facts of the case – a consumer class action claiming deceptive labeling of a Bayer diet supplement – were idiosyncratic, but the appellate holding that affidavits from purported purchasers aren’t sufficient to ascertain class membership seemed broad indeed. Consumer class action advocates asked for en banc review, asserting a credible argument that the decision was a death knell for claims based on low-cost items for which purchasers don’t save receipts. The 3rd Circuit declined to hear the case en banc, but in a dissent, four judges said they were worried that the Carrera decision went too far, giving rise to “fear that some wrongs will go unrighted because wrongdoers gamed the system.”
Who would ever have predicted that convicted al Qaeda operative Zacarias Moussaoui would be more eager to provide testimony to help terror victims than former Virginia congressman and House majority leader Eric Cantor? Moussaoui, as I told you yesterday, has contacted the federal district court in Brooklyn, offering to provide information about al Qaeda funding to plaintiffs suing Arab Bank and other financial institutions. Cantor, meanwhile, has been subpoenaed in a different terror-funding case – accusing Bank of China of financing Palestinian Islamic Jihad – to testify about his meeting in Israel with Israeli Prime Minister Benjamin Netanyahu in August 2013. On Sept. 30, the U.S. House of Representatives’ general counsel moved to quash the subpoena.
Zacarias Moussaoui, who pleaded guilty in 2005 to conspiring in al Qaeda’s Sept. 11 attacks on the United States, says he has information about how al Qaeda financed its operations and he wants to provide it to lawyers representing terrorism victims.
If you bought Alibaba shares last month when the Chinese mobile commerce company went public, you participated in the biggest-ever initial public offering. Alibaba raised $25 billion from investors when its shares began to trade on the New York Stock Exchange. Its price has dropped a bit from its record high of more than $99 on the first day of trading, but as of Thursday afternoon Alibaba was swinging back up toward $90 a share.
Is there any Allergan shareholder who isn’t aware that William Ackman’s hedge fund, Pershing Square Capital, and the Canadian pharmaceutical company Valeant slipped through a loophole in the securities laws when they teamed up on a hostile bid for the Botox maker? Or that Allergan believes the loophole is actually a violation of the law and Pershing is engaged in insider trading? If so, I’d like to know the name of the remote Pacific atoll where you’ve apparently been luxuriating without the Internet, newspapers and television for the past few months. This cleverly lawyered deal has been chronicled (including by me) with the sort of play-by-play analysis that’s usually reserved for NFL playoff games or middle-school romances.
Former AIG honcho Maurice “Hank” Greenberg’s $50 billion Fifth Amendment claims against the U.S. government may be, as New Yorker writer John Cassidy recently said, more of a comic extravaganza than a legitimate case, but there’s no doubt that the Greenberg trial underway in the U.S. Court of Federal Claims will contribute to the historical record of the government’s response to the 2008 economic crisis. Former U.S. Treasury Secretary Hank Paulson testified Monday, and his successor, Tim Geithner, and former U.S. Federal Reserve Chairman Ben Bernanke are also on Greenberg’s witness list. We can all thank Greenberg for muscling their sworn testimony into public, regardless of the crotchety old rich guy’s gall and his long odds of actually winning.