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Jesse Fried

  • How Delisting Chinese Stocks Could Hurt Wall Street

    June 11, 2020

    On May 20, the Senate passed the Holding Foreign Companies Accountable Act (HFCAA), a bill that would potentially delist Chinese stocks that fail to comply with Public Company Accounting Oversight Board’s (PCAOB) audits for three years in a row. On the surface, the bill is intended to protect U.S. investors from potential fraudulent accounting by Chinese companies. Bank of America analyst Michael Carrier said Wednesday that delisting foreign stocks like Alibaba Group Holding Ltd - ADR (NYSE: BABA) and JD.Com Inc (NASDAQ: JD) could have a negative impact on Wall Street...He estimates the exchanges could lose between 2% and 3% of listing revenue, between 1% and 2% of US equity transaction revenue and roughly 1% of total revenue. Carrier’s comments come a day after Harvard Law School professor Jesse Fried told CNBC that the bill is unlikely to pass due to opposition from Wall Street.  “Wall Street will be lobbying to try to block it, because it makes a lot of money off of listings of Chinese companies in the United States,” Fried said.

  • Stock Market News: US Senate Wants To Delist Chinese Companies, Expert Warns Of ‘Backfire’

    June 10, 2020

    An attempt by the Senate to prevent China from using American investments in Chinese firms against the United States might prove to be self-defeating in the long run. Already an epicenter of anti-Chinese communist sentiment, the Senate on May 20 overwhelmingly approved the "Holding Foreign Companies Accountable Act (S. 945)," a bill that might lead to Chinese firms being barred from listing on U.S. stock exchanges. The bill will require foreign companies doing business in the U.S. to certify they’re not controlled by their governments. They will also have to submit to audits by U.S. regulators for three consecutive years...The intent of S.945 is laudable but the real world application might not redound to the benefit of the U.S., contended Jesse Fried, a professor of law at the Harvard Law School. “So, I think in terms of protecting American investors, this bill if it becomes law, could backfire” and might also hurt Wall Street, warned Fried. He told CNBC he's “not sure that this bill ... will actually make American investors better off" because there’s a good chance Chinese firms will stop trading on Wall Street after three years if the bill becomes law...Fried also noted not much can be done to protect the interests of American investors in Chinese firms. He believes there’s “good reason” to think S. 945 won’t be signed into law because of staunch Wall Street opposition. “Unfortunately, I think that money that American investors have already paid for stocks in Chinese companies -- especially money that’s gone back to mainland China -- is basically money that these people may never see again. But there’s not really that much you can do to protect them at this point."

  • Bill to delist Chinese companies may disadvantage U.S. investors, says Harvard law professor

    June 9, 2020

    Under a new bill, passed by the U.S. Senate last month, Chinese firms risk being delisted from U.S. stock exchanges if they don't adhere to U.S. audit standards. But, if the law is passed, it's unclear if U.S. investors will be left "better off," says Jesse Fried, a professor of law at the Harvard Law School.

  • Delisting Chinese companies plays straight into their hands

    June 1, 2020

    An article by Jesse FriedLast month, the US Senate unanimously passed a bill aimed at improving the reliability of financial statements by China-based companies trading in the US. The legislation focuses on a real problem with these businesses, whose total market capitalisation is about $1tn. Over the past decade, alleged fraud at China-based, US-traded companies — including most recently Luckin Coffee — has cost American investors billions of dollars. Unfortunately, the bill’s remedy may end up making them worse off. To reduce fraud, the Sarbanes-Oxley Act of 2002 requires audits of every US-traded company to be inspected by the Public Company Accounting Oversight Board. But those based in China refuse to comply. They, and the Chinese government, say PCAOB inspection of China-based audit records would violate state-secrecy laws. Why block PCAOB access? Inspections might well reveal bribes to high-ranking officials, embarrassing the Chinese Communist party. The US bill requires the Securities and Exchange Commission to prohibit trading in the stock of any company that goes three consecutive years without PCAOB inspection. Its apparent goal is to force China to agree to inspections. If the strategy succeeds, it should be harder for insiders of China-based companies to defraud American investors. The bill has bipartisan support in the House of Representatives.

  • Should There Be Deals During a Pandemic?

    April 29, 2020

    Financial crises follow a sequence. One of the steps is outrage. Then comes regulation — think Dodd-Frank, Sarbanes-Oxley and the like. During the pandemic that is both a heath and a financial crisis, a lot of outrage is aimed at stock buybacks. Over the past three years, S+P 500 companies spent $2 trillion on buybacks. Pundits are quick to point out that U.S. airlines spent nearly all of their free cash flow on buybacks over the past decade. Many now argue that if these companies kept more cash on hand, they wouldn’t need bailouts now. This criticism joins longer-running arguments over whether buybacks encourage short-termism and limit investment in research and development. But there are good reasons to support buybacks. They allow capital to be deployed efficiently and stop managers from spending excess cash on vanity projects. And contrary to conventional wisdom, buybacks don’t benefit shareholders alone. Jesse Fried of Harvard Law School has testified to Congress that, for every $100 in repurchases, companies issue $80 of equity, meaning public investors net just $20. Employees are probably the biggest beneficiaries: Companies, particularly tech firms, use stock buybacks to repurchase stock options...To be sure, there are issues with buybacks. Mr. Fried has ably documented how executives can time them to their personal benefit, something akin to insider trading. Companies do buy back shares when they’re too expensive or otherwise spend money that should be saved. And in other cases, stock buybacks have encouraged a short-term focus.

  • Detail of Austin Hall

    Harvard Law excels in SSRN citation rankings

    April 6, 2020

    Statistics released by the Social Science Research Network (SSRN) indicate that, as of the beginning of 2020, Harvard Law School faculty members featured prominently on SSRN’s list of the most-cited law professors.

  • Get ready for the $4.5tn takeover

    March 25, 2020

    One of the most moving responses to coronavirus has come from home-quarantined Italians singing together from their balconies. They were belting out Il Canto della Verbena or Volare. The subtext was that interdependence is the only defence humans have against their own fragility. For postwar individualist philosophers like Ayn Rand — cheerleader for the primacy of private capital — the jig is well and truly up. Witness the extraordinary efforts by governments to stabilise their economies and forestall the collapse of business. The US signed off on a $2tn aid package in the early hours of Wednesday morning and the global bailout — central bank liquidity support included — will have a sticker price of more than $4.5tn. That is a big number, even by the standards of recommended takeovers...Whole sectors — notably airlines, hotels and cruise lines — will lack a raison d'être for months. For many companies, revenues will fall short of overheads. But state support, and the quid pro quos that go with it, are preferable to going bust. “This is analogous to a war we have to mobilise to deal with,” says Jesse Fried, an economist and Harvard law professor. “It is not part of the normal boom and bust cycle.”

  • Silicon Valley Is Quietly Building Its Own Wall Street

    February 19, 2020

    On a drizzly San Francisco day in December, Eric Ries is stationed inside the Succession-worthy offices of Orrick, Herrington + Sutcliffe...The 41-year-old’s 2011 bestseller, The Lean Startup, introduced the masses to product/market fit, minimum viable product, and the pivot. It also vaulted Ries into nerd celebrity status, a coach and mentor to Silicon Valley’s elite...Ries is now focused on his most ambitious — and risky — venture yet: a new stock exchange called the LTSE, or Long-term Stock Exchange...The LTSE is a controversial new exchange that, Ries argues, will create a fundamental shift in the capital markets...It turns out that the very tools of short-termism that Ries rails against — activist investing and short selling (often deployed in combination) — serve a purpose. “Activist investors and short sellers each play an important role in our market ecosystem,” says Jesse Fried, a Harvard Law professor who focuses on corporate governance and security regulation. “The former exerts a disciplining effect on managers, and the latter improves price accuracy.” Take that away, critics argue, and you have a sloppy system where power resides disproportionately in the hands of founders and a select group of institutional investors who can afford to buy and hold, consolidating power so they can effectively ignore other shareholders as they pursue bad ideas.

  • Company insiders are selling stock during buyback programs and making additional profits when stock prices jump. And it’s legal.

    November 7, 2019

    In February 2017, the company behind the hit games Candy Crush and Call of Duty signaled optimism in its future and announced a $1 billion program to buy back its own shares — and investors responded by buying heavily. But few of them could know that as they were buying, insiders at the mobile gaming titan Activision Blizzard were selling, and taking home additional profits as the stock price jumped....While many executives have prearranged procedures to sell stock, these plans do not have to be publicly disclosed and can be changed, Jesse Fried, a Harvard Law School professor who testified about buybacks at congressional hearings in October, said in a phone interview. He also noted that some insiders are in a position to decide the timing of a buyback announcement, meaning it could be set ahead of a prearranged sale, putting them in a position to benefit from any price rise.

  • Shareholders always come first and that’s a good thing

    October 7, 2019

    An article by Jesse Fried: In August, 181 chief executives, including Apple’s Tim Cook and JPMorgan’s Jamie Dimon, officially demoted their shareholders. They all signed a Business Roundtable statement in which they “commit to lead their companies for the benefit of all stakeholders — customers, employees, suppliers, communities and shareholders”. If you believe what the members of the influential business group say, equity holders will no longer be paramount. In reality, the Business Roundtable is merely paying lip service to broader social concerns. I predict that the pledge will not actually affect how they run their companies.

  • BDS hides behind free speech to dodge accountability

    August 21, 2019

    An op-ed by Jesse M. Fried and Steven Davidoff Solomon: The House of Representatives recently voted 398-17 to reject the global Boycott, Divestment, and Sanctions effort against Israel. Against this lopsided vote, Congresswoman Ilhan Omar offered a resolution defending BDS as an exercise of free speech by Americans. We strongly support free speech, but BDS supporters often use free speech talk to try to dodge accountability for their misbehavior.   Case in point: The American Studies Association’s Israel boycott. In 2013, the ASA’s leadership, known as the National Council, endorsed a resolution to cut ties with Israeli universities. The proposal was put to member vote. Turnout was low; only 20 percent voted in support. But the National Council declared victory anyway and, ever since, claims the resolution was adopted.

  • 6 Reasons Not To Invest In We’s IPO

    August 20, 2019

    Should the government apply any standards to the quality of the companies that get to sell their shares to the public in an IPO? I realize the SEC has minimum requirements but when I consider some of the companies going public these days, I wonder whether those standards are high enough. ...A corporate governance expert at Harvard Law School, Jesse Fried, told CNN that having a couple within its C-suite could be the least of its problems. "[It] could be a plus or a minus. If it's a minus, it pales in comparison to the other risks. From investors' perspective, WeWork is associated with many business and governance risks."

  • How U.S.-listed Chinese companies are ‘squeezing out’ minority investors

    March 19, 2019

    As scrutiny over unfair Chinese business practices intensifies amid drawn out U.S.-China trade discussions, investors are debating another contentious issue: minority American shareholders “squeezed out” by U.S. listed Chinese companies. ... Further complicating the issue is the controlling share structure of the companies, which allows founders to retain voting control. Minority investors, who own less than a 50% stake in the company, have little say in the direction of the company and are left powerless to contest a low-ball buyout offer. While that itself is not unique to Chinese firms, they have largely escaped shareholder repercussions because they are domiciled in the Cayman Islands, where minority investors have less protection than in Delaware, where most U.S. companies are registered, according to Harvard Law Professor Jesse Fried. “The problem from the perspective of minority shareholders is the fact that all the defendants, the assets, the records, are all in the People’s Republic of China, which makes them unavailable,” Fried says. “It also drives up the cost of litigation.”

  • If Purdue Pharma declares bankruptcy, what would it mean for lawsuits against the opioid manufacturer?

    March 5, 2019

    The legal battle over who’s at fault for the opioid crisis, which involves more than 1,600 lawsuits in federal and state courts, could get even more complicated soon, with OxyContin manufacturer Purdue Pharma reportedly considering filing for bankruptcy. ...The idea is to produce a resolution in a faster, more focused manner than would be the case in civil court. And even if plaintiffs only receive a fraction of what they are owed, the aim is to get everyone a piece of the pie. Otherwise, different plaintiffs might try to accelerate their own efforts so they can take the full amount owed to them, leaving little for other plaintiffs. “If [a company] has to pay cases as they were finalized, the plaintiff that had reached a resolution in its case earlier might get paid in full, but there would be nothing left for anyone else,” said Jesse Fried, a professor at Harvard Law School.

  • Senators take aim at the buyback boogeyman

    February 21, 2019

    An op-ed by Jesse M. Fried and Charles C.Y. WangSenators Chuck Schumer of New York and Bernie Sanders of Vermont recently announced they would introduce legislation to prohibit a public firm from repurchasing its own stock, unless the firm first invests in employees and communities, including paying workers at least $15 per hour and offering “decent” pension and health benefits. Welcome to the newest form of virtue-signaling on Capitol Hill, in which Democratic senators demonstrate their concern for employees by proposing bills that severely restrict — or even outlaw — buybacks. The proposals are based on misleading measures of corporate capital flows, as well as on a profound misunderstanding of how the US economy works. If enacted, such bills could threaten not only the capital markets but also the workers and communities the senators claim to care about.

  • Man standing in front of wall

    What’s the Deal with Stock Buybacks?

    February 19, 2019

    Harvard Law Professor Jesse Fried ’92 first became interested in the use and misuse of repurchases as an Olin Fellow at HLS in the mid-1990s. He has recently co-written several articles on the topic, including “Are Buybacks Really Shortchanging Investment?” with Charles C.Y. Wang in the Harvard Business Review. Here, Fried offers perspective on a complex, and increasingly political, topic.

  • With stock buybacks, the government should intervene subtly — if at all

    February 19, 2019

    Long controversial, the practice by which public corporations use spare cash to buy back their own stock has turned into a policy flash point for both Democrats and Republicans. The basic allegation is that profits devoted to stock buybacks — $583 billion by S&P 500 companies during the first three quarters of 2018 — are profits not plowed back into new plants, equipment or higher wages. This is especially galling now, the critics argue, given that last year U.S. corporations got a huge tax cut, whose Republican authors advertised it as a boon to productivity and investment. ... Undoubtedly, stock buybacks favor corporate executives lucky enough to cash out, but to the extent this increases inequality, it mainly favors the very rich (CEOs) over the somewhat rich (shareholders). Opponents of buybacks commonly cite figures showing that they swallowed up 96 percent of S&P 500 profits between 2007 and 2016; research by Harvard professors Jesse M. Fried and Charles C.Y. Wang, however, suggests that the actual figure is more like 41.5 percent after accounting for new stock issuance and expenses for research and development. Contrary to the concerns about diverting investment funds, U.S. nonresidential investment and job creation have been rising for most of the past decade. When shareholders get cash for their stocks, the money doesn’t disappear; it flows through the economy, often as productive investment elsewhere.

  • HLS faculty maintain top position in SSRN citation rankings 2

    HLS faculty maintain top position in SSRN citation rankings

    January 18, 2019

    Statistics released by the Social Science Research Network (SSRN) indicate that, as of the end of 2018, Harvard Law School faculty members have continued to feature prominently on SSRN’s list of the 100 most-cited law professors.

  • Will China Cheat American Investors?

    December 18, 2018

    An op-ed by Jesse M. Fried and Matthew Schoenfeld: While Washington and Beijing battle over trade, a worrisome cross-border financial link has escaped scrutiny: Americans now collectively own most of the public equity of China’s biggest tech companies, including Alibaba, Baidu and Weibo. This relationship is strange (imagine if the Chinese owned most of Amazon, Facebook and Google). It’s also extremely risky, at least for American investors.

  • A year after their tax cuts, how have corporations spent the windfall?

    December 17, 2018

    The Republican-led Congress approved a massive corporate tax cut last year on the premise that executives would put the money saved to good use. Companies would build new factories. They would hire more workers. Buy new equipment. Get more efficient. Fund more research. Expand. ... Harvard law professor Jesse Fried has done extensive research on buybacks and supports them. Fried said the money spent on buybacks circulates back to workers because people reinvest the cash they get from selling shares to the company. “Shareholders take much of this cash, invest it in capital-hungry private firms, which use it to invest and hire workers,” Fried said. “And while public firms may grab the spotlight, smaller private firms employ twice as many workers and tend to be much more innovative, and can often put this cash to better use.”

  • We Know Exactly What Kind of President Elizabeth Warren Would Be

    October 9, 2018

    There’s a quip attributed to LBJ that needs updating for 2020. “Whenever most senators look in a mirror, they see a president,” it goes. Elizabeth Warren’s mirror is a piece of legislation. The Massachusetts Democrat has introduced measures in recent months to transfer corporate governance to Washington and mandate social responsibility, by whatever definition it takes...“The [Accountable Capitalism] Act could also be expected to lead to additional distortions down the road,” writes Harvard Law professor Jessie Fried. Those distortions not only may be clumsy, but nefarious. “Once corporate law is federalized, Congress will be tempted to use its foot-hold in corporate governance to add more mandates and restrictions, ostensibly to address other ‘problems’ in corporate America, but actually to benefit key voting constituencies and campaign financiers.”

  • Understanding the Post-Tax Cuts Buybacks Surge: A Primer

    September 24, 2018

    Much debate over the effectiveness of the 2017 tax overhaul has centered on corporate buybacks, and as November elections approach, that debate is sure to heat up....But a big chunk of repurchases among the S&P 500 is offset by new equity—$3.3 trillion worth between 2007 and 2016, versus $4.2 trillion in buybacks over the same period, according to a Sept. 4 paper from Harvard Law School professor Jesse M. Fried and Harvard Business School professor Charles C. Y. Wang. The S&P 500 may spend $1 trillion on repurchases in 2018, Fried told Bloomberg Tax, “but they’re probably going to have $500 billion to $600 billion in equity issuances.” The focus on the S&P 500, he said, ignores the many young, growing businesses that employ a much larger slice of the workforce and tend to issue far more shares than they’re paying out.

  • Trump and Warren offer the wrong diagnosis of short-termism

    August 27, 2018

    An op-ed by Jesse Fried. American president Donald Trump and Democratic senator Elizabeth Warren rarely see eye-to-eye. But both seem to believe that American public companies are overly focused on the short-term, and that the solution is to reduce investor power. Ms Warren this month introduced legislation — the Accountable Capitalism act— that would force all US-domiciled businesses with revenues exceeding $1bn to hand over at least 40 per cent of board seats to employees, and require directors to consider all stakeholders, not just shareholders. President Trump, meanwhile, asked the Securities and Exchange Commission to study the possibility of eliminating quarterly disclosure requirements for public companies. The apparent consensus around corporate short-termism is mistaken. It is powered by myths and misconceptions, not facts and careful analysis.

  • Elizabeth Warren has a plan to save capitalism

    August 16, 2018

    Elizabeth Warren has a big idea that challenges how the Democratic Party thinks about solving the problem of inequality. Instead of advocating for expensive new social programs like free college or health care, she’s introducing a bill Wednesday, the Accountable Capitalism Act, that would redistribute trillions of dollars from rich executives and shareholders to the middle class — without costing a dime...This is, of course, not an uncontested view. Jesse Fried and Charles Wang argued earlier this year that the real amount of buybacks is overstated by politicians who focus on gross share repurchases that are partially offset by new share issuances.

  • Are Stock Buybacks Starving the Economy?

    July 31, 2018

    ...Not all economic and financial analysts see buybacks as problematic. “Far from being starved of resources, S&P 500 companies are at near-peak levels of investment and have huge stockpiles of cash available for even more,” argue Jesse M. Fried and Charles C.Y. Wang in the Harvard Business Review. “The proportion of income available for investment that went to shareholders of the 500 over the past 10 years was a modest 41.5 percent—less than half the amount claimed by critics.” Plus, if buybacks merely transferred money from businesses to investors who then reallocated that money to other, more dynamic businesses, the overall effect on the economy might be muted.

  • Apple, Starbucks Have an Answer for the Tight Job Market: Hand Out Stock

    July 25, 2018

    U.S. companies are collecting record amounts of cash in their coffers, and many can’t think of anything better to do with it than buy back their stock. Here’s a better idea: Hand out some of those shares to rank-and-file employees...In practice, though, a sizable portion of the repurchased shares are reissued in the form of equity-based compensation, said Jesse Fried, a Harvard Law School professor who studies compensation and buybacks. Mr. Fried said shareholders may see aligning executive pay with stock performance as logical because senior leaders can do disproportionately more to affect a company’s performance. But giving out shares at the entry level where wages are set could be considered a handout. “Companies aren’t in the business of making charitable contributions with other people’s money,” he said.

  • The Real Problem With Stock Buybacks

    July 25, 2018

    An op-ed by Jesse M. Fried and Charles C.Y. Wang. There is a problem with share buybacks—but it isn’t the one many critics and legislators are obsessed with...The real problem is that buybacks, unlike dividends, can be used to systematically transfer value from shareholders to executives. Researchers have shown that executives opportunistically use repurchases to shrink the share count and thereby trigger earnings-per-share-based bonuses. Executives also use buybacks to create temporary additional demand for shares, nudging up the short-term stock price as executives unload equity. Finally, managers who know the stock is cheap use open-market repurchases to secretly buy back shares, boosting the value of their long-term equity. Although continuing public shareholders also profit from this indirect insider trading, selling public shareholders lose by a greater amount, reducing investor returns in aggregate.

  • Sorry, Warren Buffett, Stock Buybacks Aren’t That Simple

    May 9, 2018

    So Warren Buffett is "delighted" that Apple Inc. has decided to buy back $100 billion worth of its own stock. And really, why wouldn't he be? As he pointed out Saturday during Berkshire Hathaway Inc.'s annual meeting, Berkshire owns somewhere around 5 percent of Apple. "And," he noted happily, "with the passage of a little time, I figure we might own 6 or 7 percent simply because they repurchased shares." He added, "I love the idea of having our 5 percent or whatever it may be grow to 6 or 7 percent without us having to lay out a dime." But how should the rest of us feel about this use of Apple's cash?...When I asked Jesse Fried, a professor at Harvard Law School and the author of a recent article defending share buybacks in the Harvard Business Review, why companies weren't using the money to give employees raises, he scoffed. "The idea that a for-profit company shares the wealth with its workers is pretty far-fetched," he said.

  • America’s biggest companies are announcing buybacks. But whose cash is it, anyway?

    April 15, 2018

    America’s 500 biggest public companies in 2018 are expected to distribute up to $600 billion or more through stock buybacks...These companies and others find themselves sitting on an Everest of cash, thanks to profits pouring in faster than they can find productive ways to spend it. The profits have built up in recent years, aided by low borrowing costs, rapidly advancing technology that has reduced overhead and boosted margins, and international trade that has allowed offshore production of goods at bargain prices...“Public firms started with $3.3 trillion in cash in 2007 and accumulated 50 percent more cash over the next decade, ending with $4.9 trillion in the bank,” said Harvard law professor Jesse Fried, who is part of a team that has done extensive research on the subject and that supports buybacks. “Buybacks cannot be starving firms of cash for investment if cash stockpiles are huge and rising. If buyback alarmists were correct, investment by public firms should be declining.”

  • Email trail shows how anti-Israel zealots took over a mild-mannered scholarly organization

    March 26, 2018

    An op-ed by Jesse Fried and Steven Davidoff Solomon. In December 2013, the American Studies Association adopted a boycott of Israel. The organization, which says it “promote[s] the development and dissemination of interdisciplinary research on U.S. culture and history in a global context,” banned ties to Israeli educational institutions. The Israel boycott resolution was first approved by ASA’s leadership, known as the National Council. Then, due to low voter turnout, it was ratified by a mere 20 percent of the organization’s members. Four distinguished ASA members have since sued the group and certain ASA leaders, claiming that the small turnout invalidated the vote’s result under the ASA’s bylaws and the District of Columbia Nonprofit Corporation Act.

  • The Secret of Why Productivity Has Outstripped Wages for Seven Decades

    March 23, 2018

    An enigma baffling American economists for years has been solved, with a little help from outside. In a study published in January, professors Efraim Benmelech, Nittai Bergman and Hyunseob Kim explain why over the 68 years from 1948 to 2016 the productivity of the average American employee increased 242% while wages rose only 115%...One of the most important researchers in this respect is Lucian Arye Bebchuk, a professor at Harvard Law School. Fifteen years ago he published a book with Harvard Law colleague Jesse Fried, “Pay without Performance: The Unfulfilled Promise of Executive Compensation,” explaining why the correlation between executive pay on Wall Street and performance is so weak. It’s mainly because directors are captives of management, and the market for managers isn’t really a market, it’s more like a rigged game.

  • Harvard Law Professors Top Citation Rankings

    January 31, 2018

    Twelve of the top 100 most-cited law professors of all time teach at Harvard Law School, according to the Social Science Research Network—and professors Lucian A. Bebchuk and Steven Shavell took the first two spots. An electronic service that aims to make research papers and scholarly articles easily accessible, the SSRN contains over 650,000 documents by more than 360,000 authors...“The rankings reflect the significant impact that the Harvard Law School faculty has on policy research and the legal academy,” Bebchuk wrote in an email. Law Professor Cass R. Sunstein ’75, who ranks in fourth place with 1,484 citations, said he thinks there is a significant benefit to publishing work on SSRN. “I think it’s a good thing if you have a paper that’s published and that could benefit from the comments and criticisms of others,” Sunstein said...The list also includes Law professors Louis Kaplow, Reinier H. Kraakman ’71, Mark J. Roe, Jesse M. Fried ’86, Alma Cohen, Allen Ferrell, John Coates IV, Oren Bar-Gill, and J. Mark Ramseyer.

  • HLS faculty maintain top position in SSRN citation rankings

    HLS faculty maintain top position in SSRN citation rankings

    January 24, 2018

    Statistics released by the Social Science Research Network (SSRN) indicate that, as of the end of 2017, Harvard Law School faculty members have continued to feature prominently on SSRN’s list of the 100 most-cited law professors.

  • Anti-Israel Activists Subvert a Scholarly Group

    December 4, 2017

    An op-ed by Jesse Fried and Eugene Kontorovich. Emails unearthed in a federal lawsuit appear to show that the American Studies Association’s decision to boycott Israel was orchestrated by a small cadre of academics who infiltrated the ASA’s leadership to demonize the Jewish state. The ASA website says the scholarly group “promotes the development and dissemination of interdisciplinary research on U.S. culture and history in a global context,” but in December 2013 it endorsed an academic boycott of Israel. The ASA’s leadership, called the National Council, backed the boycott resolution and put it to a membership vote. A third of the members voted, and two-thirds of those endorsed the resolution.

  • Uber’s Ousted CEO Travis Kalanick Discovered the Limits of Founder Control-The Hard Way

    June 22, 2017

    ...But as Uber CEO Travis Kalanick learned this week, founder control is something of an illusion when a company needs constant infusions of investor cash in order to survive...But notably, Kalanick remains on Uber’s board of directors—an indicator that he and his shareholders are making an economic decision, and not a purely ethical one. “You can have the legal power to keep yourself king, but still voluntarily abdicate if that’s what it takes to obtain much-needed capital,” says Jesse Fried, a Harvard Law School professor who specializes in corporate governance. “Who wants to rule over a collapsing kingdom?”

  • Tanium’s Family Empire Is in Crisis

    April 13, 2017

    A predominant theme in Silicon Valley over the past year involves powerful founders behaving badly. Uber Technologies Inc. and Zenefits, a maker of human resources software, are two companies whose public reputations have been partly undone by such conduct. Now the same destructive dynamic appears to be playing out at Tanium Inc...The situation at Tanium underscores the risk of venture capitalists placing near-absolute power in the hands of a company’s creators. Orion Hindawi and his father David control more than 60 percent of votes on Tanium’s board. Similar structures have worked for Facebook Inc. and Snap Inc., but investors take on increased risk by ceding authority, said Jesse Fried, a professor of business law at Harvard University: “If you have a CEO who generally is doing a good job but is acting bad on the margins, you’re not going to get in their face.”

  • Federal Judge Advances Lawsuit Challenging Academia Boycotting Israel

    April 4, 2017

    The United States District Court for the District of Columbia has rejected efforts by the American Studies Association (ASA) to suppress a lawsuit filed against the Association by its own members challenging its boycott of all Israeli academic institutions. The judge ruled in favor of the ASA professors in four out of six claims, and authorized the case to go forward...“The circumstances of the ASA’s purported adoption of an anti-Israel BDS resolution are deeply shocking,” stated Harvard University Law Professor Jesse Fried who served as an expert adviser to the litigation team representing the plaintiffs.

  • Snap’s Concentrated Power Structure Takes a Page From Old Media

    February 3, 2017

    Snap Inc. often likens its app to a new form of television. It’s also borrowing from the playbook of traditional media companies to create a small circle of power in its top ranks...“Snap is doing something I have not seen before: creating and issuing non-voting shares at the IPO,” said Jesse Fried, a professor at Harvard Law School. “After the IPO, Snap can issue additional non-voting stock to employees or other parties without eroding the founders’ control rights.”

  • Jonathan Lovvorn appointed policy director of the HLS Animal Law and Policy Program

    HLS faculty maintain strong presence in SSRN rankings

    January 19, 2017

    Statistics released by the Social Science Research Network (SSRN) indicate that, as of the end of 2016, Harvard Law School faculty members have continued to feature prominently on SSRN’s list of the 100 most-cited law professors.

  • Wells Fargo may not be the end: Clawbacks expected to become a bigger issue

    September 29, 2016

    In seeking to defuse the firestorm over its sham accounts, Wells Fargo & Co.’s board turned to an old, but obscure gambit – getting its top leader to pay up. John Stumpf, the bank's chairman and CEO, will forfeit about $41 million of unvested stock awards and forgo his salary while the company investigates its retail banking sales practices...Companies’ general reluctance to claw back pay may stem from their desire to retain top executives, avoid litigation by departed executives, and minimize bad publicity, says Jesse Fried, professor of law at Harvard Law School. Some companies may choose to reduce a CEO’s current pay rather than claw back already-received pay. “It is much less embarrassing for the CEO,” Fried says. Dodd-Frank “will require companies to recoup excess pay arising in connection with a (financial) restatement. There will be a lot more clawbacks because companies will not have discretion to forgo recoupment when a covered executive has received excess pay,” Fried says.

  • Wells Fargo’s CEO Pay Clawback Puts Wall Street Executives on Notice

    September 29, 2016

    Wells Fargo & Co's unprecedented move to strip Chief Executive John Stumpf of $41 million in stock awards has sent a chill through Wall Street with bankers fearful that a hardening political climate against corporate wrongdoing will encourage boards to be more aggressive about making them forfeit pay...."The Wells Fargo board made a mistake by not recouping some of the CEO's pay until after the firestorm developed," said Harvard Law School professor Jesse Fried. "Other boards will learn from this mistake."

  • In Wells Fargo hearing, executive pay ‘clawbacks’ are likely to take center stage

    September 20, 2016

    Anyone paying attention to Tuesday's Senate Banking Committee hearing over Wells Fargo's sales tactics is likely to hear a lot about a single word: "Clawbacks." It's the practice of doing just what it sounds like: Taking money back from an executive for compensation they've already been paid for things such as misconduct, gross negligence or "material" errors...Jesse Fried, a professor at Harvard Law School who studies corporate governance, says "it's still extremely rare to hear of a public company using its own voluntarily adopted clawback provision" to go after their own executive's pay.

  • Lawsuit reveals disturbing tactics by BDS supporters

    May 31, 2016

    An op-ed by Jesse Fried and Steven Davidoff Solomon. The American Anthropological Association has been voting this entire month on a resolution calling for the boycott of Israeli academic institutions. Today marks the final day for members to cast their votes. Should the resolution pass, the anthropologists will be the largest US academic association to support an Israel boycott, joining a handful of smaller organizations such as the African Literature Association and the American Studies Association. These anti-Israel resolutions are being pushed by BDS (Boycott-Divest-Sanction) activists eager to demonize, demoralize and ultimately destroy the Jewish state. Academic BDS is widely and appropriately viewed as morally perverse. As the American Association of University Professors, the Association of American Universities and many of the country’s leading scholars have stressed, any academic boycott interferes with the commitment to the free exchange of ideas that is still shared by most academics.

  • HLS faculty maintain top position in SSRN citation rankings

    Bebchuk, Coates and Fried among top ten corporate and securities articles of 2015

    May 10, 2016

    The Corporate Practice Commentator recently announced the list of the Ten Best Corporate and Securities Articles selected by an annual poll of corporate and securities law academics. The list includes three articles from Harvard Law faculty associated with the Program on Corporate Governance, Professors Lucian Bebchuk, John Coates, and Jesse Fried.

  • Expanded student government cultivates change on campus

    May 4, 2016

    Harvard Law School Student Body President Kyle Strickland ’16 and Vice President Mavara Agha ’16 worked to enable more students to be involved in improving the student experience at HLS.

  • HLS faculty maintain top position in SSRN citation rankings

    Twelve Harvard Law School faculty among SSRN’s 100 most-cited law professors

    March 22, 2016

    Statistics released by the Social Science Research Network (SSRN) indicate that, as of the start of 2016, Harvard Law School faculty members featured prominently on SSRN’s list of the 100 most-cited law professors, capturing twelve slots among the top 100 law school professors (in all legal areas) in terms of citations to their work.

  • The Examiners: Insider Pay Disclosures Can Spark Troubling Unintended Consequences

    November 20, 2015

    Payments made to officers, directors and other “insiders” in control of a distressed corporate debtor are closely scrutinized by other stakeholders as well as the media in larger chapter 11 cases. Bankruptcy rules require companies to disclose insider payments during the 12-month period leading up to a bankruptcy filing. ...Whatever the merits of the disclosure debate may be, the debate is swept up in the larger controversy surrounding executive pay faced by healthy and distressed businesses alike. For example, in their controversial treatise on the unfulfilled promise of executive compensation, Lucian Bebchuk and Jesse Fried weave a detailed account of how structural flaws in corporate governance have enabled managers to influence their own pay and have produced widespread distortions in pay arrangements. They believe that directors must focus on shareholder interests and operate independently from the executives whose compensation they set by making directors more directly accountable to shareholders. In rebuttal, critics point to executive compensation practices of distressed businesses to demonstrate that reducing “agency costs”—the problem created by the separation of ownership and control in larger public companies which is mitigated in distressed situations through the consolidation of ownership interests and assertion of control by sophisticated investors—doesn’t lead to material changes in executive compensation arrangements.

  • Lucian Bebchuk

    All-Star Team on a Winning Streak

    October 5, 2015

    Corporate governance scholars at Harvard Law keep putting up great numbers.

  • Harvard Law faculty top list of best corporate and securities articles of 2014

    June 11, 2015

    The legal journal Corporate Practice Commentator recently announced the 10 Best Corporate and Securities Articles of 2014. Half of those selected this year were written by Harvard Law School faculty members.

  • What Courses Should Law Students Take? Harvard’s Largest Employers Weigh In

    March 13, 2015

    An article by John C. Coates, Jesse M. Fried, and Kathryn E. Spier. An online survey of 124 practicing attorneys at major law firms suggests possible new directions for educating and training Harvard Law School students. The most salient result from the survey is that students should learn accounting and financial statement analysis, as well as corporate finance. These two subject areas are viewed as particularly valuable both for lawyers in litigation and lawyers working in corporate/transactional practice areas.