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Corporate-Governance-Symposium

In: Business and Management

Submitted By Jgohyh
Words 22913
Pages 92
The Role of Corporate Law in Preventing a Financial
Crisis: Reflections on In re Citigroup Inc. Shareholder
Derivative Litigation
Franklin A. Gevurtz*
TABLE OF CONTENTS
I.

INTRODUCTION ..................................................................................................

II. CITIGROUP AS A CASE STUDY IN EXCESSIVE RISK-TAKING ..............................
III. TOOLS FOR CURBING EXCESSIVE RISK-TAKING AND THE ROLE OF
CORPORATE LAW ...............................................................................................
A. The Tools for Curbing Excessive Risk-taking .............................................
1. Regulation of Business Activities ..........................................................
2. Capital Requirements ...........................................................................
3. Compensation Rules .............................................................................
4. Liability for Unreasonable Risks ..........................................................
5. Selection of Management (Rules of Corporate Governance) ...............
B. Dividing the Tools Between Banking and Corporate Law ..........................
IV. WHY IT MATTERS: CITIGROUP AS AN ILLUSTRATION OF THE
LIMITATIONS OF STATE CORPORATE LAW ........................................................
A. Citigroup As a Case Study In Weak Corporate Law...................................
1. Overview ...............................................................................................
2. The Standard.........................................................................................
3. Application............................................................................................
4. The Waste Claim...................................................................................
B. The Structural Underpinnings...

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