NYU Journal of Law and Business hosts symposium on legal aftershocks of the global financial crisis

NYU Journal of Law and Business hosts symposium on legal aftershocks of the global financial crisis

On Friday, January 22nd, the NYU Journal of Law and Business hosted its fifth annual symposium, “Legal Aftershocks of the Global Financial Crisis.” Continuing the Journal’s tradition of addressing timely issues at the intersection of law and business, the day-long event brought together three all-star panels of legal scholars and practitioners to discuss the aftermath of the 2008-2009 financial crisis.
The symposium drew approximately 330 guests to listen to and interact with panels moderated by William Allen, director of NYU Pollack Center for Law & Business; Geoffrey Miller, director the Center for the Study of Central Banks and Financial Institutions; and Barry Adler, Bernard Petrie Professor of Law and Business. Professor Jesse Fried of Harvard Law School was Friday’s keynote speaker; Fried’s colleague and co-author of Pay Without Performance, Professor Lucian Bebchuk, addressed an audience the previous evening. Both Fried and Bebchuk discussed issues of executive compensation, its role in the financial crisis, and the need to align compensation with long-term incentives.

Fried and Bebchuk argued that the cability of executives to reap large amounts of compensation based on short term results created perverse incentives that helped drive financial firms to the brink of collapse. “When we wrote our book five years ago, we warned that executive pay arrangements were excessively pegged to short term gains,” said Fried, “After the crisis of 2008-2009 there is now a more widespread recognition that there are large costs associated with pay structures that are too focused on the short term.”

The first panel, moderated by Allen, addressed corporate governance after the financial crisis, its relationship to the crisis, and the prospects of enhanced shareholder power. Panelists included Carol Bowie, head of RiskMetrics Group‘s Governance Institute; John Coates, professor of law and economics at Harvard Law School; Justice Jack Jacobs of the Delaware Supreme Court; Vice Chancellor Stephen Lamb, partner at Paul, Weiss, Rifkind, Wharton & Garrison and retired vice chancellor of the Delaware Court of Chancery; and Theodore N. Mirvis, partner at Wachtell, Lipton, Rosen & Katz.

The second panel, moderated by Miller, addressed reform of the financial industry, including Congressional legislation and the actions of the Federal Reserve. Panelists included Joyce Hansen, deputy general counsel and senior vice president of the Federal Reserve Bank of New York; John Coffee, professor and director of the Center on Corporate Governance at Columbia Law School; H. Rodgin Cohen, senior chairman of Sullivan & Cromwell; Annette Nazareth, partner at Davis Polk & Wardwell; and Bradley Sabel, partner at Shearman & Sterling.

The third and final panel was moderated by Adler and focused on bankruptcy and restructuring of financial institutions as well as issues surrounding the concept of “too big to fail.” Panelists included William Ackman, founder and CEO of Pershing Square Capital Management; Marcia Goldstein, partner and chair of the Business, Finance & Restructuring Department of Weil, Gotshal & Manges; the Honorable Arthur Gonzalez, Judge of the United States Bankruptcy Court of the Southern District of New York; Michael Krimminger, special advisor for policy to the chairman of FDIC; and Edward Morrison, professor of law and economics at Columbia Law School.

Posted February 5, 2010