Shareholder proposals attract attention from scholars in finance and economics because they present an opportunity to study both quasidemocratic decision-making at the corporate level and the impact of this decision-making on firm outcomes. These studies capture the effect of various proposals but rarely address whether regulations should allow many of them in the first place due to the possibility of stock price manipulation. Recent changes to shareholder proposal rules, adopted in September 2020, sought to address the potential for exploitation that some proposals create (but ultimately failed to do so). This Article shows the potential for apparently legal stock price manipulation if shareholder proposals remain relatively unregulated. We propose improvements to decrease this risk of stock price manipulation, which should help the government prosecute the offenders.
Artem M. Joukov and Samantha M. Caspar, The Alarming Legality of Security Manipulation Through Shareholder Proposals, 44 SEATTLE U. L. REV. 707 (2021).
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