BUSINESS LAW CONCEPTS

Transcription

1 DISCOVER YOUR TALENT SUMMER WEEK: LAW INTRODUCTION TO GLOBAL BUSINESS LAW CONCEPTS Universita Commerciale Luigi Bocconi Patrick J. O Malley, Esq. June Patrick O Malley

2 A bit about me -US attorney-at-law (NY, FL, MA) & Solicitor in England & Wales -Focus on international capital markets work (IPOs) -Also, corporate and VC investments -Work in Providence, Spain, Boston, Palm Beach, London and Milan -Now, independent int l legal consultant & law prof: -To date, 13 countries on 4 continents for universities, professional training bodies and corporations

3 A bit about you Who here is considering majoring in law / legal studies? Who is considering other disciplines? Be forewarned, one way or another, you cannot escape the law.

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5 Study of the Law: GOALS Gives you sense of importance of law and how it permeates contemporary life on all levels l (directly & indirectly business) Do you recognize the saying, Ignorance of the law is no excuse? Gives a chance to reflect on how law has developed and how it affects public life (e.g. political, economic, cultural) and private life (e.g. contracts) Gives you sense of the extensive legal universe (very useful for future, both in business and other spheres)

6 Comparative Law Methodology Beware of comparing specific points (i.e. Consumer or investor protections, creditors rights) without taking into account whole legal system Realise various legal systems have base/radical philosophical differences (e.g. France vs UK/US re: freedom ) Legal systems stems also result from local history, culture, politics and language Often, false friends or different terminology: notary, liability, responsibility, public, sentence, doctrine etc. This even affects the Anglo-American A law world

7 The Law That which is laid down, ordained or established. Generically, a body of rules of action or conduct prescribed by controlling authority, and having binding legal force. That which must be obeyed & followed by citizens subject to sanctions or legal consequences is a law.

8 The Law (cont d) Law is a solemn expression of the will of the supreme power of the State Law of a state is found in its statutory & constitutional enactments, as interpreted by its courts and, in absence of statutory law, in the rulings of its courts. Comprises both statutory & case law (jurisprudence)

9 The Law (cont d) Body of principles, standards & rules promulgated by government or authority of some sort (positive law v. natural law: inherent rights, conferred not by act of legislation but by "God, nature or reason.") Command which obliges a person or persons & obliges generally to acts (e.g. Duties- taxes) or forbearance of a class (e.g. Crimes, torts) Includes body of recognized rights which can be enjoyed and enforced in some way (e.g. civil rights, contracts)

10 The Law (cont d) General rule of human action (cognizance of only external acts), enforced by a determinate authority which authority is human, and among human authorities that which is paramount in a political society (as opposed to idea of natural or divine law) With reference to its origin, it is derived either from judicial precedents, from legislation or from custom

11 The Rule of Law Definitions: a state of order in which events conform to the law the doctrine that no individual is above the law and that everyone must answer to it principle that every member of a society, even a ruler, must follow the law one of the cornerstones of democratic society, meaning that everyone is subject to the law

12 Rule of Law cont d A legal system in which rules are clear, wellunderstood, and fairly enforced, including property rights and enforcement of contracts t The extent to which agents have confidence in and abide by the rules of society, and in particular the quality of contract enforcement, the police, and the courts, a well as the likelihood of crime and violence

13 The Rule of Law is a sine qua non to the ability of a given society to properly do business, trade, commerce In its absence, chaos and lack of due human development If interested, see what Transarency International says about this: transparency.org

14 The Why? of studying law You may be future lawyers, business managers, directors, entrepreneurs & professional investors - who will regularly l make key legal &/or business decisions on many matters or you may be gov t officials or working in organisations (incl. NGOs) dealing with law in some way To make good decisions, you need to be familiar & feel comfortable with business legal framework (laws & regulations) applicable to your situation, whether in Europe, the US or elsewhere globally Globalization has also led to extensive legal convergence*

15 The Why of studying law You need not always be the specialized legal expert, but you do need to be proactive in ISSUE SPOTTING & seeking good legal counsel/advice depending on the facts of your situation Explosion of legal risk : both US & EU legal frameworks constantly changing, more complicated than ever; thus more difficult than ever to be a lawyer, manager, director, entrepreneur or professional investor Most of you will see this further complicated by extensive US & EU company laws applicable to your multinational li i l or subsidiaries (ergo comparative viewpoints- convergence & coordination*) )

16 Globalized business laws: today ultimately a question of good corporate governance All those considerations that a company and its agents need to actively consider on an ongoing basis as they involve exposure, both on a personal/individual and a corporate level, to either civil, administrative or criminal liability, or administrative, regulator, stock market or private party enforcement action (in addition to serious reputational damage)...

17 Key areas of business law Basis: idea about both US & EU company/securities laws a good start However, need to be attentive to related areas, such as: Intellectual Property Law (EU & national, US) Tax Law Labour/Employment Law (US, EU & national) Antitrust/Competition Law (M&A, JVs, pricing, contracts/sales distribution, etc.) Contract law Commercial Law (including nat l/regional sanctions & import/export p restrictions, sanctions, anti-bribery/corruption)

18 A few key areas of business law Tort Law (multi-jurisdictional: plaintiff & defendent): consumers, investors & competitors Environmental/Health-safety Laws Banking laws Money laundering Insurance laws Anything else?

19 Defining the Legal Aspects of Corporate Law- a few select SOURCES Laws ( hard and soft )- national (French, Italian, UK), transnational (EU Directives & Regulations), sometimes international (OECD, WTO, UN, other treaties), sometimes local (autonomous regions, federal states- länder, etc.) Regulations (i.e. those enacted pursuant to national or EU laws) Listing Rules (i.e. NYSE Euronext [Paris], Deutsche Börse or AIM listing rules) Contractual (i.e. List of limitations, reporting obligations imposed on distressed company pursuant to a high-yield bond offering).

20 Deputization

21 Key point: DEPUTIZATION - Interplay btw EU & national company laws, as well as federal/state rules in US Idea is for law & regulations to strengthen national company law systems as well (US originated deputization, self-reporting, etc.): US & EU sense of subsidiarity : 4 lines of defense against corporate malpractice that destroys wealth (1st internal company controls, 2d independent third parties, 3d Supervision, 4th law enforcement) In US coordination btw state & federal officials, key roles assigned to various Gatekeepers later in course will look at federal reform of fin. law & impact on CO GO 3-pronged approach

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23 Current global llegal lapproach (e.g. bribery, insider trading) Prevention Remedying (internal) Self-reporting & Cooperation Monitoring & Control ( top down ) Deputization Whistleblowing i ( bottom up )

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25 4 corporate governance lines of defense 1 st line: insiders & monitoring/controls 2d line: independent professional gatekeepers 3d line: external supervisory bodies 4 th line: law enforcement & regulators

26 Why do we need laws & regulations? i.e., Why do they exist? Let s s discuss this point. Are there legal principles that transcend individual legal systems?

27 Natural law Or jus naturale, originally posited by Roman jurists Oi Originally i denoted tda system of rules & principles to guide human conduct which, apart from any enacted law or legal systems particular to one people, p might be discovered by rational intelligence of man/woman

28 Natural law Law that grows out of and conforms to his/her nature (whole mental, moral & physical constitution) In the ethical realm, consists in practical universal judgments- express necessary & obligatory rules of human conduct promulgated through hhuman reason by author of human nature Rules applicable to all women/men in all times periods, everywhere, regardless of culture, religion or other specific status**

29 Ultimate rationale of the law capital markets example Since people/companies imperfect, dishonest, prone to error, etc., the law / regulations try to bridge the gap to ensure a level of trust for investors, lenders and working capital markets (based on disclosure, accounting & auditing\ Co Go ); thus ensuring access to needed finance for businesses to grow & operate

30 Law applied: in the news Insider Trading: t-gupta-convicted-of-insider-trading/ g html#a rticletabs_video Corruption: com/watch?v=g1n0kat_i 4s&feature=related

31 THE END Thank you Patrick J. O Malley 2013