Zalak Raval

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Emory Corp. Governance & Accountability Rev. Perspectives

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Using various law journal studies, newspaper articles, Congress's bill and a recent DOJ Settlement, Zalak Raval examines wolf-pack activism in recent years. The perspective begins by addressing how wolf packs exploit targeted industries. It explains how a wolf pack's investment strategy has a detrimental effect on target companies. Specially because the SEC shareholder disclosure rules are uncertain pertaining to the formation of a group, i.e. for shareholders who own less than five percent stock in the company. This in turn opens up loopholes for activists to exploit. The perspective specifically discusses the loopholes used by activists pertaining to Section 13(d) of the Williams Act. It then discusses the U.S. Congress's commitment to curb uncertainty surrounding wolf pack investment strategy, specifically via the Brokaw bill. This perspective advocates for the bill to be signed into law to provide clear enforceable law for shareholders and courts. It also brings to forefront the recent ValueAct settlement, which has closed yet another loophole used by activists, specifically the 13(d)-one narrow exemption for passive investors. Finally, the perspective suggests additional factors that might be helpful in curbing the unchecked wolf packs investment strategy.

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