Republicans say retail investors are missing out on the ‘lottery tickets’ of private firms going public

Congressional Republicans believe the cost of going public, and being a public company, is too darn high. That means retail investors are missing out on huge gains, since private company “unicorns” are avoiding public markets and the “unnecessary regulatory burdens” imposed by the 2002 Sarbanes-Oxley Act.

In a hearing on Tuesday of the House Financial Services subcommittee on capital markets, Rep. Warren Davidson, a Republican from Ohio, compared the stock market to buying a ticket to the lottery. “We don’t stop people from spending money on lottery tickets and clearly the risk of losing your capital in the lottery is much greater.”

Rep. Bill Huizenga of Michigan, the subcommittee chairman led the full court press on his fellow lawmakers, and regulators like the Securities and Exchange Commission and the Public Company Accounting Oversight Board—created by Sarbanes-Oxley—to expand investing options for mom and pop investors and remove more obstacles to more capital formation.

Huizenga said businesses that stay private can’t “reward hardworking Americans.”

Michael Piwowar, a Republican appointee at the Securities and Exchange Commission , agrees with Huizenga and Davidson. At an event at the Heritage Foundation on Monday, Piwowar told the audience he’s questioned the premise of having accredited versus nonaccredited investor categories. An accredited investor is one with a net worth of at least $1 million, not including a house, or with income at least $200,000 each year for the last two years.

“We are protecting investors by prohibiting them from investing in certain high-risk securities,” Piwowar told the Heritage Foundation audience. “We know high risk equals higher expected returns, so we are protecting investors form higher expected returns. Mom-and-pop investors are not sharing in the return because these companies are taking longer to go public.”

New York Stock Exchange President Tom Farley, who also testified Tuesday, went a few steps further. He’s calling for an expansion of the Emerging Growth Company classification created by the Jumpstart Our Business Startups, or JOBS, Act signed into law by President Obama. He wants to raise the annual gross revenue threshold ceiling for companies to remain an EGC to above $1 billion from the current $1 billion level. NYSE also supports eliminating the requirement for EGCs and companies with less than $250 million in gross revenue from “the SEC’s costly financial statement format requirements known as XBRL format.”

Farley also said lawmakers should strip the PCAOB of authority over the external auditor’s review of internal controls at companies. In his opening statement Farley said that “listed companies are increasingly concerned that the PCAOB’s regulatory agenda is expanding the organization’s footprint beyond the originally intended scope by virtue of the PCAOB inspection process and corresponding changes to issuer internal control systems.”

“Sarbox, or just simply SOX as the law is colloquially known,” said witness John Berlau, a fellow at the conservative Competitive Enterprise Institute and a contributor to Newsmax, “has caused auditing costs to double, triple, and even quadruple for many firms.” Section 404 of the law requires an auditor to give an opinion on management’s assessment of its internal controls over financial reporting has been interpreted too broadly by interpreted broadly by the PCAOB, according to its critics.

Don Whalen, general counsel & director of research at Audit Analytics told MarketWatch, “The PCAOB’s decision beginning in 2010 to more thoroughly review the auditor attestation work during audit inspections would have caused audit firms to increase efforts during the audit of certain clients. Nevertheless, the increases from year to year are not that high.”

Audit Analytics figures show modest increases in audit fees from year to year that could also be explained by more work required because of more risk at certain clients.

Year Growth in audit fees
2015 1.57%
2014 3.20%
2013 2.88%
2012 3.45%
2011 3.18

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Firms ordered to end £500m credit card fee racket

  • Stealth charges are believed to cost customers half a billion pounds a year
  • The government will announce today that all such fees will be banned
  • The ban will be policed by trading standards units and the Competition and Markets Authority 

James Salmon Business Correspondent For The Daily Mail

Rip-off card fees imposed by airlines, shops and town halls are to be outlawed.

Customers are thought to fork out half a billion pounds a year for the stealth charges.

Airlines can add up to 3 per cent for credit card bookings while local councils often impose a levy of 2.5 per cent.

But the Government will announce today that all such fees will be banned from January.

‘Rip-off charges have no place in a modern Britain and that’s why card charging is about to come to an end,’ said Stephen Barclay, economic secretary to the Treasury.

‘This is about fairness and transparency, and so from next year there will be no more nasty surprises for people at the check-out just for using a card.

‘These small charges can really add up and this change will mean shoppers across the country have that bit of extra cash to spend on the things that matter to them.’

The ban will be policed by trading standards units and the Competition and Markets Authority. The clampdown stems from Brussels, with governments across Europe forced to implement the EU Payment Services 2 directive.

The Treasury says it has gone further by applying it to American Express, Apple Pay and Paypal.

Although Monarch and Virgin Atlantic have ditched their card fees, others continue to levy hefty charges. They include Flybe which charges 3 per cent, Ryanair which charges 2 per cent, and Swinton Insurance which charges 2.5 per cent

Although Monarch and Virgin Atlantic have ditched their card fees, others continue to levy hefty charges. They include Flybe which charges 3 per cent, Ryanair which charges 2 per cent, and Swinton Insurance which charges 2.5 per cent

Although Monarch and Virgin Atlantic have ditched their card fees, others continue to levy hefty charges. They include Flybe which charges 3 per cent, Ryanair which charges 2 per cent, and Swinton Insurance which charges 2.5 per cent

James Daley of the consumer website Fairer Finance, which has campaigned for a crackdown on rip-off card fees, said: ‘It is a bit cheeky of the Treasury to take credit for implementing a European directive.

‘Firms have exploited customers for years by charging them way over the odds. The big question now is whether the authorities will enforce this, as they have failed to enforce previous legislation.’

Guy Anker of MoneySavingExpert.com said: ‘Scrapping card surcharges is good news for the millions of consumers who would otherwise have been milked by companies who whack on unexpected charges at the end of the process – something that has been happening for years.’

But he warned: ‘While it will make it easier for consumers to compare prices we expect some companies will raise prices for all to compensate for the loss, which could hit those who currently pay in cash or by debit card.’

‘Rip-off charges have no place in a modern Britain and that’s why card charging is about to come to an end,’ said Stephen Barclay, economic secretary to the Treasury

‘Rip-off charges have no place in a modern Britain and that’s why card charging is about to come to an end,’ said Stephen Barclay, economic secretary to the Treasury

‘Rip-off charges have no place in a modern Britain and that’s why card charging is about to come to an end,’ said Stephen Barclay, economic secretary to the Treasury

The Treasury said firms caught breaking the law would be forced to reimburse customers and face fines. The fee ban will also apply to local authorities and agencies such as the DVLA.

Town halls rake in millions with card fees on council tax and parking permit payments. The DVLA charges a £2.50 flat fee to motorists using a credit card.

Figures from HM Revenue & Customs showed the card fees generated an estimated £473million back in 2010.

New laws were introduced in 2013 making it illegal for firms to profit from card charges.

Now they are allowed only to pass on ‘interchange’ fees they are charged by their bank.

But consumer campaigners say this has been openly flouted.

A 0.3 per cent cap on interchange fees has also had a limited impact since it was introduced back in December 2015.

Although Monarch and Virgin Atlantic have ditched their card fees, others continue to levy hefty charges. They include Flybe which charges 3 per cent, Ryanair which charges 2 per cent, and Swinton Insurance which charges 2.5 per cent.

British Airways still charges 1 per cent on credit card purchases, having dropped a flat fee of £5 per booking last year.

Experts say large companies should incur costs of no more than 0.6 per cent on a credit card purchase. Although some firms could increase their prices as a result of the ban, the Treasury hopes they will take the hit in order to remain competitive.

Officials said that an outright ban would be easier to police than a series of caps and other failed measures. 

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‘Mining firms should finance share trusts’

Business Reporter
A parliamentary committee has recommended the amendment of Zimbabwe’s indigenisation law to insert a requirement that compels mining firms to contribute at least 25 percent of pledges to community share trusts to facilitate their speedy set up.

The Parliamentary Portfolio Committee on Indigenisation and Empowerment has also recommended inclusion of statutory provisions for application of punitive measures against mining houses that fail to meet the legislation by December.

“The Ministry of Youth, Indigenisation and Economic Empowerment must immediately review the Indigenisation and Economic Empowerment Act to include a requirement of a minimum of 25 percent of the amount pledged by the qualifying companies towards the seed capital of the Community Share Ownership Trusts,” the committee said after reviewing progress in Mudzi and Mutoko.

The Indigenisation and Economic Empowerment Act compels foreign owned companies to sell at least 51 percent to locals and makes provisions for foreign companies to contribute towards the establishment of community share schemes.

The committee on Indigenisation and Empowerment enquired into the operations of community share ownership trusts and employee share ownership schemes to assess progress made towards the implementation of these trust schemes in accordance with the requirements of the indigenisation law.

The owner of Kilwright Mine in Mudzi, which has not been operational due to lack of funding after foreign partners in the venture pulled out, assured the committee that he would comply with the indigenisation Act once operations commence.

The Deed of Trust for Mudzi district’s share ownership trust was produced in 2010. However, there is no compliance to the requirements of the Indigenisation and Economic Empowerment Act from any company operating in this district.

Among the local authority and Government officials who presented evidence to the committee were Mutoko District chief executive Peter Sigauke, District Administrator Kutamahufa Tavadira, former Mines and Mining Development secretary Professor Francis Gudyanga and deputy indigenisation minister Mathias Tongofa.

Mashonaland East Provincial Minister Retired Brigadier General Ambrose Mutinhiri, also appeared before the Committee on the endeavours that his office had undertaken to engage the mining companies in Mudzi and Mutoko districts

Part of the major findings of the Parliamentary committee were that the local communities were not benefiting from the mining activities in Mutoko and Mudzi, as there was no tangible development due to the rampant illegal mining activities.

This was further, compounded by the non-compliance to the requirements of the indigenisation law by the four qualifying companies that are operating in this district. Traditional leaders were not involved in the regulation of mining activities, yet they were the custodians of the areas in which the mining takes place.

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Multi-national firms in breach of local content law, says Senate

The Senate said Tuesday that most multi-national companies operating in the country have failed to substantially comply with the provisions of the Local Content Act.

Senate President, Abubakar Bukola Saraki, stated this as upper chamber began the investigation of the implementation of local content in the country’s oil and gas industry.

Senate joint Committee on Petroleum Resources (Upstream) and Gas Resources was saddled with the responsibility of the probe.

Saraki,  who inaugurated the investigation said that the National Assembly was concerned with the poor level of implementation of local content in the country.

Represented by the Senate Leader, Senator Ahmed Lawan, Saraki said that “most multi nationals are yet to substantially comply with the provisions of the law.’’

The Senate President noted that under the Nigeria oil and gas Industry Content Development Act, investors were mandated to consider Nigerian companies as an important element in their project development and management.

He said, “The Nigeria content in this context refers to firms registered in Nigeria in accordance with the provisions of the Companies and other Allied Matters Act.

“The National Assembly is challenged to ensure that the oil and gas industry provides an avenue where more jobs and opportunities are given to qualified local experts in the industry.

“We are here to discuss to know where we are today in the implementation of the Nigeria Oil and Gas Industry Content Development Act since it was enacted in 2010.

“We are also here to know where we have made progress and identify the gaps and where we need help to up the game.’’

Saraki said that it was obvious a rich local content was one of the most efficient ways to stimulate the economy for a multiplier effect in different sectors.

He noted that to achieve that, a full implementation of the act was necessary, stressing that it would help in creating employment among other benefits.

Chairman, Senate on Petroleum (Upstream) Senator Omotayo Alasoadura, assured that the joint committee was determined to finding a lasting solution to the problem.

Alasoadura said that the Senate at its sitting on September 27, 2016, mandated the joint committee to carry out an extensive investigation into the level of compliance by multi- national companies in the industry.

He said, “The senate arising from a debate on the need to ascertain the degree of local content in Nigeria oil and gas industry, mandated the committee to determine compliance with the  Act by industry operators.’’

Engr. Simbi Wabote, Executive Secretary of the Nigerian Content Development & Monitoring Board (NCDMB), Engr. Simbi Wabote, told the committee that the board had made tremendous progress since enactment of the Act in 2010.

Wabote said the board was currently implementing a 10 year strategic roadmap anchored on delivering five pillars of sustainable local content.

He noted that the board had a target of achieving 70 per cent local content in the next ten years.

He said, “A lot has been achieved in terms of local content development. It is a key pillar for our nation’s development. A lot has also been done to get the agency to its enviable position.

“Part of it is to develop the required technical capability and also to ensure strict compliance and enforcement of the provisions of the act.

“The other pillar is to enable business environment in order that investors will be attracted to Nigeria to invest.

`”Then most importantly is to enhance the organisational capability of the board to carry out its mandate and ultimately create sectorial and regional market,’’ he said.

He added that the board has set up the Nigeria Content Development Fund Account and has mobilised stakeholders towards remittance of one per cent of contracts awarded.

He said that the agency monitored Nigeria content compliance and applied sanctions to defaulting companies in line with Section 68 of the Act, among other achievements.

“Nigeria content has recorded 6 million training man hours since the inception of the act.

`”Out of 20 billion dollars spent in the industry from five percent participation, we have been able get back 5 billion dollars into the country and we desire to increase sales to 15 billion dollars in 2027.

“Before the act, all marine activities in the industry were in the hands of experts outside this country.

“Today we have been able to get back 36 per cent of those marine activities for equitable participation of Nigerians and established about six world class fabrication facilities.

“So, today Nigeria is able to handle 60,000 metric tonnes of fabrication capacity in the country. This was at zero level before the enactment of the act.

“All electrical cables used in the oil and gas operations are manufactured in Nigeria and we are able to manufacture 670,000 of metric tonnes of pipes today,’’ he said.

The executive secretary said before the act came into being seven years ago, all fabrications, engineering and procurement activities were done outside the country.

He further said the development had resulted in a capital flight of 380 billion dollars from Nigeria in the past fifty years.

He added that the capital flight necessitated the exporting of jobs that would have been made available for Nigerians, leading to loss of 2 million jobs.

“There was high unemployment rate due to the dearth of skills and the total local content utilisation before the enactment of the act was put at just five per cent.

“That was when the government decided to intervene seeing the way the industry was going and it culminated in putting in place the Nigerian Content Act of 2010.

“The main goal of the act is to develop the capacity of local supply chain for effective and efficient service within the oil and gas industry without compromising standards.

“It is also aimed at enhancing development and inclusion of Nigerian services and manpower,’’ he said.


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Sudan denies hiring U.S. firms to lobby for lifting of sanctions

July 17, 2017 (KHARTOUM) – State Minister for Foreign Affairs, Hamid Mumtaz, Monday denied Khartoum’s hiring of an American law firm to lobby for ensuring the permanent lift of economic sanctions on Sudan.

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Hamid Mumtaz (Photo NCP website)

Last June, Bloomberg disclosed that Sudanese government through its embassy in Washington hired a law firm, Squire Patton Boggs LLP, at a cost of $40,000 a month to lobby on its behalf to ensure that President Donald Trump permanently lifts sanctions against the east African country

The report was based on a letter, since seen by Sudan Tribune, included with a required filing with the Justice Department on June 1 under the Foreign Agent Registration Act.

This contract was not the first one with a lobbying firm. In February 2017, Sudan hired Cooke Robotham LLC to help advise Sudan as it restructures its debt after the decision of former President Barak Obama to cancel the economic embargo last January. The contract was signed at a fixed fee of $300,000.

“We are a responsible country that does not work through (lobbying) companies, but through the official institutions to end the (economic) embargo imposed on Sudan,” said the junior minister in press statements following a meeting in the Sudanese parliament.

“We have worked with the official channels in the previous period, we will continue to work in the coming period,” he further emphasised.

Washington on 12 July decided to postpone its decision on the relief of sanction for additional three months, pointing to the need to consider human rights, religious freedom and Sudan’s commitment to sanctions on North Korea.

In response, President Omer al-Bashir decided to suspend a joint committee on the sanctions lift until 12 October 2017.

However, Mumtaz reiterated that Bashir’s decision does not mean to suspend contacts and communications with Washington.

“The suspension of the negotiating committee with Washington on lifting sanctions does not mean ending communication,” he said, adding that contacts will continue through diplomatic and political channels as well as popular efforts and efforts of civil society groups, friends and partners.

He further said he called on the foreign affairs committee at the parliament to contribute to repeal the economic embargo on Sudan.

“In my meeting with the National Assembly Foreign Affairs Committee, I answered the MPs’ questions with all transparency and clarity about the consequences of the postponement, its negative and positive aspects,” he said, pointing out that efforts will be coordinated among all relevant parties during the next stage.

(ST)

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Mattel : Pomerantz Law Firm Reminds Shareholders with Losses on their Investment in Mattel, Inc. of Class Action Lawsuit and Upcoming Deadline – MAT

NEW YORK, NY / ACCESSWIRE / July 18, 2017 / Pomerantz LLP announces that a class action lawsuit has been filed against Mattel, Inc. (“Mattel” or the “Company”) (NASDAQ: MAT) and certain of its officers. The class action, filed in United States District Court, Central District of California, Western Division, and docketed under 17-cv-04953, is on behalf of a class consisting of investors who purchased or otherwise acquired Mattel securities, seeking to recover compensable damages caused by defendants’ violations of the Securities Exchange Act of 1934.

If you are a shareholder who purchased Mattel securities between October 20, 2016 and April 20, 2017, both dates inclusive, you have until August 26, 2017 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at rswilloughby@pomlaw.com or 888.476.6529 (or 888.4-POMLAW),
toll free, ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and
number of shares purchased.

[Click here to join this class action]

Mattel, Inc. designs,
manufactures, and markets a broad variety of children’s toy products on a worldwide basis. The Company sells its products to retailers and directly to consumers. Mattel’s products include branded fashion dolls, infant and preschool products, toy cars, and electrical vehicles.

Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) prior to and during the Class Period, Mattel’s retail customers were loaded with extremely high levels of unsold Mattel product; (ii) as a result of Mattel’s unusually high levels of unsold inventory at its retailers, Mattel was exposed to the heightened risk that it would have to issue its retailers financial concessions (in the form of sales adjustments, discounts and promotions) to remove such excess inventory, as well as the heightened risk that Mattel would experience slower sales growth in future periods; and (iii) as a result of the foregoing, Mattel’s public statements were materially false and misleading at all relevant times.

On April 20, 2017, post-market, Mattel issued a press release announcing its Q1 2017 financial results for the period ending March 31, 2017. For the quarter, the Company reported that, on a year-over-year basis, worldwide net sales and gross margins each declined by more than 15%, and its operating loss increased by more than 158% to $127.0 million from $49.1 million.

Mattel’s Q1 2017 results took securities analysts by surprise and were significantly below Wall Street consensus estimates. In fact, Mattel’s 15% net sales decline during the quarter was twice the 7.8% decline expected by Wall Street analysts and its reported Q1 2017 gross margins were 520 basis points less than expected Wall Street consensus estimates.

After the issuance of the Q1 2017 earnings release, Mattel held a conference call with securities analysts and investors. During the conference call, Mattel’s Chief Financial Officer stated, in pertinent part, that “[w]hat we didn’t expect was the prolonged impact from the retail inventory overhang and the resulting slower pace of reorders by retailers, with sales in North America and Europe particularly impacted.”

Upon these revelations, the price of Mattel stock fell nearly 14%, or $3.42 per share, on heavy trading volume to close at $21.79 per share on April 21, 2017.

The Pomerantz Firm, with offices in New York, Chicago, Florida, and Los Angeles, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com

SOURCE: Pomerantz LLP


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Enact tough tobacco law

The new push for tougher laws to curb the use of tobacco and save the millions of lives lost to cancer, heart disease and related non-communicable diseases every year in Tanzania should be supported. There are many reasons why policymakers must seriously consider the latest proposals by the Tanzania Tobacco Control Forum (TTCF).

The anti-tobacco campaigners want Tanzania to enact new laws that prohibit firms from advertising tobacco products, and also to increase taxes on cigarettes – make them more expensive and out of reach for the country’s youth.

Considering that at least 14.1 per cent of Tanzanians smoke every day, exposing themselves to life-threatening diseases, according to information from the ministry of Health, these are choices worth pursuing. The World Bank reports that increasing the real price of cigarettes by 10 per cent can save 10 million tobacco-related deaths worldwide and 700,000 in sub Saharan Africa.

There is reason to believe that Tanzania can also save a significant number of lives by taking that route. More so, in countries where such proposals have been adopted, there is proof of significant economic benefits of raising taxes on tobacco.

Globally, the golden leaf, as tobacco is known, is a multi-billion dollar business, which paradoxically, thrives at the expense of precious life.     

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Chambliss Law Firm Ranked In BTI Industry Power Rankings 2017

Chambliss, Bahner & Stophel, P.C. has been recognized by clients for its client relationships in the national law firm ranking BTI Industry Power Rankings 2017: The Law Firms with the Best Client Relationships in 18 Industries.

The Chattanooga-based law firm is listed as a “Clientopia Standout” for the second year in a row and is one of only five other law firms with Clientopia relationships in the food industry.

Chambliss is proud to be placed among top firms across the nation for client relationships.

“Our team deeply values each and every relationship with our clients,” said Mike St. Charles, managing shareholder of Chambliss. “To be recognized for these relationships by a national organization means a great deal to our firm. It validates the extra effort we put forth in making client service our top priority.”

Clientopia is the ideal state of a client relationship, occurring when a client views a law firm as a core, go-to firm and one that is most recommended to peers. BTI explains that the perfect client relationship exhibits two critical elements at the same time: money and growth.

“The client spends the bulk of their legal dollars with [the] firm and [the firm is] considered their core, primary legal provider… The client recommends [the] firm first to peers—in an unprompted manner.”

BTI Power Rankings is the only law firm ranking based solely on direct, unprompted feedback from in-depth interviews with more than 950 corporate counsel at the world’s leading organizations in 18 industries.

BTI conducts annual, in-depth interviews with leading corporate counsel to determine which law firms are achieving superior results in terms of client relationship success. Its research team includes legal industry experts and analysts who specialize in statistics, survey technique and analytical methodologies.

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Law schools are filled with Asian Americans. So why aren’t there more Asian judges?

(c) 2017, The Washington Post.

The question arose for California Supreme Court Justice Goodwin Liu when his court granted posthumous bar admission to Hong Yen Chang, a Chinese immigrant denied a law license more than a century ago because of his race: how are Asian Americans faring in the legal profession today?

Asian Americans are no longer subject to exclusion laws, but they have hit a legal glass ceiling in private practice, academia and public service.

While Asian Americans are the fastest growing minority group in law, and are overrepresented in the country’s top law schools as well as at major law firms, they lag behind all other racial groups when it comes to attaining leadership roles in the legal profession, according to a study released Tuesday by Yale Law School and the National Asian Pacific American Bar Association.

“Asian American growth in the legal profession has been impressive but penetration into leadership ranks has been slow,” said Liu, who co-authored the study with a group of students at Yale Law School, his alma mater.

Asian Americans comprise 10 percent of graduates at the country’s top law schools although they make up just 6 percent of the U.S. population. But only 3 percent of the federal judiciary and 3 percent of state judges are Asian American, the study found.

Of the 94 U.S. attorneys, only three are Asian American. And only four of the 2,437 elected prosecutors are Asian American.

In the private sector, Asian Americans have been the largest minority group in major law firms for nearly two decades, making up 7 percent of attorneys. But they have the highest attrition rates and the lowest ratio of partners to associates of any racial group.

And in academia, Asian made up only 3 out of 202 law school deans in the country in 2013, and 18 out of 709 associate or vice deans.

“Asian Americans do well when it comes to competition and selection with objective metrics” such as LSAT scores and grades, Liu said. “But when the selection begins to involve things that are intangible for promotions, they kind of flip off the radar.”

The disparities become evident straight out of law school. Asian Americans make up just 6.5 percent of federal judicial law clerks and 4.6 percent of state law clerks, despite their heavy presence at the top 30 law schools.

In contrast, while whites make up 58.2 percent of students at top law schools, they landed 82.4 percent of all federal clerkships and 80.2 percent of state clerkships.

This could be because professors often serve as the gateway to such opportunities, Liu said, and Asian American students may not have cultivated as strong ties with faculty given that most of them are white.

“Who do they think of as their proteges? Who do they mentor and decide to encourage?” Liu said. “In this very discretionary subjective selection process that involves having contacts, Asian Americans don’t do as well.”

Other students, though, simply know what to do. “They knew what a clerkship was — that it was something to go for and could open more doors for you later on in life,” Liu said. “They know how to seek out the professors who know the judges. You have to be part of that conversation and that network to know these things. There is no published manual.”

Eric Chung, a 24-year-old Yale Law graduate who co-authored the study, is clerking for Liu, having gotten to know him through their work in the report.

“For many Asian Americans, the traditional dynamic is just put your head down, do the good work, and it’s not who you know but how hard you work and what you do,” said Chung, 24, who is clerking for Liu. “But in a society where a lot depends on these informal networks, that may not be sufficient.”

Similar patterns turn up in law firms when it comes to promotions, and candidates are evaluated on criteria like leadership, likability, sociability, gravitas and access to contacts, Liu said.

Implicit biases contribute to firms’ decisions about placing lawyers with clients and on the management committee, or naming as general counsel, he said.

“You hear a lot of recruiters talk about how we are one of the top two candidates but ultimately we weren’t the right ‘fit,‘ “ said Jean Lee, president and chief executive of the Minority Corporate Counsel Association and a former vice president and assistant general counsel at JP Morgan Chase. “One of the primary factors is we’re not seen as leaders.”

Liu said the report, based on a survey, focus groups, and an analysis of publicly available data, is the first comprehensive look at Asian Americans in law.

He said he hopes the legal community will use the results to stimulate conversations about improving mentorship of law students and law firm associates, as well as to make people aware of existing biases.

“You have to give people hard numbers to show people that this is an issue,” Liu said.

The report’s findings, he said, turns the Asian “model minority” myth on its head. “People think Asian Americans are doing so well. But when you look at the top rungs, Asian Americans aren’t doing well at all.”

asian-lawyers

Keywords: minority, Asian American, law, legal, Yale, Bar Association, Goodwin Liu

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SAP names acting executive team, law firm for SA probe

Germany’s SAP named a new executive team in South Africa on Friday, two days after the software giant put four senior managers on leave, pending its investigations into allegations that it was involved in a government bribery scheme.

SAP said 25-year company veteran Claas Kuehnemann will step into the role of acting managing director for Africa, in charge of the company’s business in 51 countries, and that Peter David, its finance chief for Europe, Middle East and Africa, will become acting chief financial officer, SAP Africa.

Europe’s largest software company also said it had hired Chicago-based international law firm Baker McKenzie to conduct an external investigation. SAP said on Wednesday it would run its own, internal probe using its own compliance organisation.

Read SAP opens probe into SA unit kickback reports

Baker McKenzie will work with various experts, including forensic firm FTI Consulting, the company said.

“My interim role is to support our employees, customers and partners across all our business sectors while the due diligence process is conducted,” Kuehnemann said in a statement. Two decades ago, he set up the new SAP subsidiary in South Africa.

South African media reported on Tuesday that SAP paid alleged kickbacks in the form of sales commissions to a firm linked to the politically connected Gupta family, who are known to be close friends of President Jacob Zuma.

Read: SAP paid firm linked to Zuma’s son for deals

AmaBhungane, an investigative reporting group, together with the Daily Maverick‘s Scorpio investigative team, reported that the alleged kickbacks were to clinch a deal with rail and logistics company Transnet and other state-owned firms worth R1 billion ($76.7 million).

The AmaPhungane report was based on leaked emails and documents that they say show how the powerful Gupta family unduly influenced the awarding of government contracts worth hundreds of millions of dollars.

Read SAP must open itself to independent probe

SAP has not named the four senior executives it put on administrative leave while investigating the company’s actions.

Reuters has not been able to independently verify the allegations.

The Guptas, Indian-born South Africans, and Zuma have denied wrongdoing. A Gupta family spokesman and Zuma’s spokesman did not respond to calls and emails for comment on the SAP story.

Transnet said in a statement that it has been an SAP customer since 2000 but that it was unaware of the parties reportedly involved in SAP sales to the company. It referred queries to SAP and its sales partners.

Baker McKenzie advises a wide range of African companies, multinationals and financial institutions and employs 60 attorneys from its offices in Johannesburg. 

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