Category:Finance & Banking
The Cash Crop King: How U.S. Federalism Makes It Difficult to Insure the World’s Most Lucrative Crop
On June 25, 2019, Governor Pritzker signed the Illinois Cannabis Regulation and Tax Act, legalizing cannabis for adult use in Illinois. Cannabis is the most lucrative crop globally and the cash-making abilities of cannabis have been proven true in Illinois. Sales in the state exceeded $1 billion in the first full year of legalization, resulting in a $205.4 million tax windfall for Illinois. This success, however, is no small feat for cannabis companies considering the banking and insurance obstacles they must overcome to start this type of business. Federalism is at the heart of many of these hurdles.
McKinsey Reveals Management Issues in Rejecting Top Partner’s Bid for Reelection
In February 2021, McKinsey and Company’s 650 global partners turned down Kevin Sneader’s bid for a second three-year term as the firm’s lead partner. The rejection marked the first time in 40 years the storied consulting firm has opted not to offer its leader a second term. The vote came as McKinsey struggles to reconcile its lucrative business model with a series of ethical lapses that have been widely reported in the press, litigated in the courts, and questioned by some of the firm’s next generation of leaders.
An Update on the Gamestop Frenzy: Calls for Regulation and a Congressional Hearing
Cora Leeuwenburg Associate Editor Loyola University of Chicago School of Law, JD 2022 The controversy surrounding the unprecedented movement by retail investors and Gamestop has not died down in the last month following the stock’s meteoric rise in price and dramatic fall. The wildly volatile stock has lost hedge funds millions and resulted in …
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In the Aftermath of Identity Theft: What You Need to Know About the Fair Credit Reporting Act
For me, it started with a phone call. Normally I do not answer calls from unknown numbers. But that day I did. The woman on the other end of the line informed me that she was calling on behalf of a debt collection agency. Sensing my confusion, she explained, “We’ve been trying to reach you regarding your outstanding balance with Sprint.” That did not make sense, I insisted. I had never been a Sprint customer in my life. After a brief pause, she asked, “Have you ever been the victim of identity theft?”
One of Wall Street’s Hottest Trends: The SPAC
SPACs have been around for decades and often existed as last resorts for small companies that would have otherwise had trouble raising money on the open market. But they’ve recently become more prevalent because of the extreme market volatility caused, in part, by the global pandemic.
While many companies chose to postpone their IPOs due to the pandemic, others chose the alternate route to an IPO by merging with a SPAC. A SPAC merger allows a company to go public and get a capital influx more quickly than it would have with a conventional IPO.
Market Regulation Issues Raised by the Gamestop Buying Frenzy
The regulation of hedge funds has largely been unchecked allowing big Wall Street players to manipulate the market for the benefit and at the detriment of other investors. But forced by an unprecedented movement of retail investors, Wall Street is being forced to reckon with the hypocrisy of their practices.
Bitcoin, Tesla, and GameStop: Regulatory Challenges Posed by the New Retail Investor
GameStop started 2021 with a stock price below $20 but saw its stock price skyrocket to well above $300 a share towards the end of January. The rally would be hard to explain by solely relying on the company’s financial reports or underlying fundamentals. Instead, the rally has to be explained through a combination of external factors involving a popular fintech company’s app, manic speculation by retail investors, and Reddit. Although at first glance this may seem like a new phenomenon, the same factors have been at play for years with a huge interest in Tesla and Bitcoin – and they pose a risk to the markets that regulators and Wall Street together can’t ignore.
Investing in Income Sharing: Why Regulators Should Pay Attention to the Innovative Set Up Now
As of November 8, 2020, the student debt crisis reached $1,769,280,155,524. There’s no easy way to address a $1.7 trillion problem and the increasing cost of higher education, coupled with the necessity of a four-year degree, will only exacerbate the issue. From 2000 to 2016, the average annual cost of college more than doubled, from around $15,000 a year to nearly $32,000. The New York Fed most recently identified a phenomenon acknowledging that when you flood the marketplace with subsidies, like grants, loans, etc., it enables higher education to continue to raise prices. For every dollar of new public subsidy, prices for college have risen between 60 and 70 cents. There are a number of proposals as to how to address this crisis – from federal statutes to private intervention – but income sharing agreements (ISAs) have largely been left out of the conversation. ISAs are not without criticism, particularly because of concerns about excessive interest. However, many of the criticisms could and should be addressed by comprehensive regulation, as any other type of lending has been. ISAs will likely be part of the future solutions of financing education and, as a result, regulators need to pay attention.
Feeling Lucky (or Manipulated)?
Sports betting is now just as easy as opening up an app and playing a game on your phone. But should it?
Of course not. Sports gambling, with the potential to waste away thousands of dollars, should feel more like gambling at a casino than making a few clicks on a phone.
The Professional and Amateur Sports Protection Act of 1992 (PASPA) effectively outlawed sports betting nationwide. However, in Murphy v. National Collegiate Athletic Association, the Supreme Court struct down PASPA, launching the phrenzy towards nationwide legalization. Sports betting is fully legal and operational in 18 states in addition to Washington D.C. with the possibility of 13 more states joining the national trend by the end of 2021.
In June 2019, Governor Pritzker signed the Sports Wagering Act into law, ushering in legal sports gambling in Illinois. The law initially required users to submit applications for sports wagering services in person. However, due to the pandemic Governor Pritzker issued several Executive Orders suspending this requirement through at least November 14. With the pandemic still in full swing, there is little reason why this suspension will not be extended again.
How Proxy Access for Shareholders Can Hold Corporations Accountable
Proxy access is not about giving shareholder’s rights, it is about checking C-suite power so that everyone wins instead of just the CEOs. Proxy access has the potential to address some of the pressing issues with corporate power. Corporate power and influence are concentrated in the board of directors, proxy access gives shareholders the opportunity to infiltrate this exclusive “inner circle” of power. Shareholder access to the board can push change towards greater diversity in the boardroom and demand greater transparency and compliance.