Dropping Knowledge

What is a Hedge Fund?

February 17, 2011

Although hedge funds are in the news less than they were in the last couple of years, with the recent collapse of Level Global Investors, I thought it would be a good time to talk about “hedge funds.”  A hedge fund is a private company that pools cash for a group investment.  Sounds a lot […]

Share
Read the full article →

Dropping Knowledge: Demanding Corporate Documents

February 10, 2011

Under Delaware law, a shareholder can demand documents from a corporation if the stockholder complies with 8 Del. C. 220, and “[t]he inspection such stockholder seeks is for a proper purpose.”  There are a bunch of technical aspects of a 220 demand, but those are formulaic, and easy followed.  The real question is whether the stockholder can […]

Share
Read the full article →

Dropping Knowledge: Shareholder Derivative Cases

February 7, 2011

A derivative action is a useful device for shareholders of both private and public companies who believe that directors and officers are breaching fiduciary duties, approving wasteful transactions, or committing other torts that are harming the company, and therefore, stockholders’ investment.  It is a legal fiction, where shareholders sue on behalf of the company. Specifically, […]

Share
Read the full article →

Dropping Knowledge: Investment Suitability

February 3, 2011

In an earlier post, I promised that I would discuss investment suitability.  This is a common sense concept, but often overlooked by investors.  Under Financial Industry Regulatory Authority (FINRA) rules, your broker has an obligation to recommend suitable investments for you.  Specifically NASD Rule 2310 (which FINRA currently uses and will soon be updated): (a) […]

Share
Read the full article →

SEC Requires Issuers of Asset Backed Securities to Disclose Repurchases. This is a good thing.

January 21, 2011

On January 20, 2011, the SEC finalized a rule that requires issuers of asset-backed securities to disclose repurchases.  What the heck does that mean?   Well, asset-backed securities are securities made up of pooled together mortgages, car loans, etc.  For instance, once you give a mortgage to your house, it is packaged with other mortgages into […]

Share
Read the full article →

Is Apple and/or Steve Jobs Committing Securities Fraud?

January 20, 2011

Steve Jobs is probably the best known active Chief Executive Officer in America. He is Apple Inc.’s public face, a celebrity of sorts and is widely known as one of the creative forces of a large, popular company with over 920 million shares outstanding. Earlier this week Jobs announced that he would be taking his […]

Share
Read the full article →

Dropping Knowledge: What Exactly is Stock?

January 15, 2011

“Stock” is a general term that refers to some sort of equity interest in a company, public or private.  When organizing a corporation of any type, that corporation is financed by equity (stock), debt (bank loans, bonds, debentures) or, usually,  some combination of both.  We’ll get to the debt side later, so when we are […]

Share
Read the full article →

Next Entries →