Director’s liability and investor protection: a law and finance perspective

This article conducts an analysis of director’s liability in listed firms using modern finance theory. The paper describes how the use of special general clauses in Danish law regulates director’s liability. It is shown how risk and return combinations may assist in determining whether management has violated the business judgment rule. The analysis shows that this legal doctrine is optimal from an economic perspective. The article introduces the concept of “temporal relatively of the shareholder equality principle” which can be used to determine whether the interests of minority shareholders have been set aside. It is shown that the principle of shareholder equality must be subjected to both an ex ante, as well as an ex post assessment. Moreover, courts should be reluctant to interfere in situations where there has been an unequal distribution of gain (or loss) ex post. The theoretical arguments are illustrated by analyzing a leading Danish court case that involved the squeeze out of minority shareholders in the Danish telecom company. The paper also analyzes the incentive effects of derivate suits and suits commenced by individual shareholders. It is shown that the former creates a free rider problem whereas in the latter situation, shareholders are not fully able to internalize their externalities.     

Pubertal Development Moderates the Importance of Environmental Influences on Depressive Symptoms in Adolescent Girls and Boys

Prevalence differences in depressive symptoms between the sexes typically emerge in adolescence, with symptoms more prevalent among girls. Some evidence suggests that variation in onset and progression of puberty might contribute to these differences. This study used a genetically informative, longitudinal (assessed at ages 12, 14, and 17) sample of Finnish adolescent twins (N = 1214, 51.6% female) to test whether etiological influences on depressive symptoms differ as a function of pubertal status. These tests were conducted separately by sex, and explored longitudinal relationships. Results indicated that pubertal development moderates environmental influences on depressive symptoms. These factors are more important on age 14 depressive symptoms among more developed girls relative to their less developed peers, but decrease in influence on age 17 depressive symptoms. The same effects are observed in boys, but are delayed, paralleling the delay in pubertal development in boys compared to girls. Thus, the importance of environmental influences on depressive symptoms during adolescence changes as a function of pubertal development, and the timing of this effect differs across the sexes.     

Why is it taking so long to move down the road?: Creating a regional border agreement in the DMV as an alternative for the Interstate Compact on the Placement of Children

The Interstate Compact on the Placement of Children (ICPC) is an agreement between all 50 states and the District of Columbia governing the process of placing a foster child out of state. Notorious for its long wait times and system backlog, the ICPC presents a host of problems for children attempting to move mere minutes across state lines to be with a relative or kin placement instead of state foster care. In an effort to make this process smoother, 18 different “border agreements” have been adopted by several neighboring states across the U.S. Such border agreements give temporary placement licenses to relatives and kin while the ICPC process is ongoing. While this is a good start towards a solution, the ICPC could be further streamlined if border agreements were used more widely, especially in regional contexts. This article considers the possibility of such a regional agreement between the District of Columbia, Maryland, and Northern Virginia (known as the “DMV”). By comparing and contrasting two existing border agreements in these three jurisdictions, a regional DMV border agreement can be created implementing the best terms of both agreements.     

Choosing Transformation over Crisis in the Levant

A brief window of opportunity for an Israeli-Palestinian peace process has opened up since the Hamas-Fatah confrontation in Gaza in June. Yet the governments of both Israel and Palestine are weak, and if they fall, this could cause further instability and violence. More robust international involvement is required, including closer coordination and consultation between the Quartet and the Arab Quartet. A comprehensive process towards a final-status deal must be undertaken. This would include a new timetable for implementation of existing framework agreements, an international implementation and enforcement mechanism with close monitoring and compliance facilities, and a built-in conflict resolution mechanism to help the parties overcome disagreements in the process. Once serious progress is made on the peace front with the current Palestinian government, a concerted effort will have to be made to promote Fatah-Hamas reconciliation with a view to reintegrating Hamas into the political process.