New Standards of Director Loyalty and Care in the Post-Enron Era: Are Some Shareholders More Equal than Others?

Abstract

This Article examines how the legal frameworks that protect shareholders and employees interact in light of the corporate wrongdoing that has come to light over the past few years. Our research finds that legal rights vary significantly depending on whether claims are founded in federal securities law, state corporate law, or ERISA. This Article discusses the resulting anomalies that occur depending on whether the plaintiff is an employee or nonemployee. Even among employees, legal rights and obligations differ depending on whether the employee purchased company securities through a company-sponsored plan versus through a standard brokerage account. This Article addresses these issues and proposes an analytical approach consistent with underlying policy implications.

Keywords: Corporate governance, corporate law, employee benefits, securities law, ERISA

JEL Classification: K20, K22, K10