The U.S. Government as Control Shareholder of the Financial and Automotive Sector: Implications and Analysis

6 Pages Posted: 26 Feb 2009 Last revised: 3 Mar 2009

J. W. Verret

George Mason University - Antonin Scalia Law School, Faculty

Date Written: February 23, 2009

Abstract

This essay considers the implications of Treasury holding common equity in banks participating in the federal government's bailout under the TARP program. The federal government's position as the dominant shareholder in the financial services and automotive sectors requires careful consideration of its shareholder rights. Governments are a very unique brand of shareholder. Without careful consideration and advance planning for how those shareholder rights and responsibilities will be managed, the unintended consequences to capital markets could be dramatic.

Keywords: AIG, Bank of America, Bank of New York, Chrysler, Citigroup, GMAC, General Motors, Goldman Sachs, JP Morgan Chase, Merrill Lynch, Morgan Stanley, Proxy Access Rule, SEC, State Street, Wells Fargo

JEL Classification: K22

Suggested Citation

Verret, J. W., The U.S. Government as Control Shareholder of the Financial and Automotive Sector: Implications and Analysis (February 23, 2009). George Mason Law & Economics Research Paper No. 09-13. Available at SSRN: https://ssrn.com/abstract=1348256 or http://dx.doi.org/10.2139/ssrn.1348256

J. W. Verret (Contact Author)

George Mason University - Antonin Scalia Law School, Faculty ( email )

3301 Fairfax Drive
Arlington, VA 22201
United States

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