A board of directors is the first line of defense for protecting shareholder rights within a public company. These boards have a duty to ensure that those who run the company are doing so in the best interest of its owners — the shareholders. However, in modern public companies, where there can be thousands of owners, it is sometimes difficult to ensure that boards are acting in shareholders’ interests. That’s why it’s sometimes necessary to involve a securities attorney. We profiled the work of Juan Monteverde, a well-known attorney in New York City, to better educate our readers as to how this process can work.
We’ll begin by conducting a brief overview of how modern public companies are set up and how that connects to the voting rights of shareholders. A company goes public when it is in need of capital to further its mission. In the process of going public, the company sells ownership to members of the public by issuing shares that normally give voting rights to shareholders. The company gets capital, and shareholders get a say in how the company is run through a voting process. Oftentimes the setup for such voting adheres to the “one share, one vote” principle. This ensures that a shareholder’s ability to shape company actions is in proportion to their percentage ownership of the company.
Oftentimes, however, the shareholder voting structure for a public company is not set up according to the method outlined above. Multi-class structures may be established, which offer differential voting rights to different shareholders. These structures often favor company insiders and can sometimes have the effect of making company management less receptive to the views of public shareholders. This can erode the power that shareholders have over the direction a company takes and can sometimes lead to situations where companies are taking actions in direct opposition to shareholder wishes. When such events occur, litigation may follow.
As a leading securities attorney, Juan Monteverde has extensive experience with protecting shareholder rights in an array of different contexts. His firm, Monteverde & Associates, is a class action law firm working on the national level. It is committed to protecting both investors and consumers from the misconduct of corporations. The firm often represents shareholders who have incurred financial losses as a result of corporate fraud and consumers who have been the victim of false advertising. The firm has a successful track record at many different levels of trial and appellate courts, including the U.S. Supreme Court.
Monteverde himself often handles cases dealing with high profile mergers. In these instances, he works to help maximize shareholder value and recover damages. While conducting this work, he also makes efforts to improve the merger transaction itself. Beyond his work in direct litigation, he also helps to spread information related to the field by writing articles and speaking publicly. His speaking engagements have included talks before the ABA, ACI, and other conferences.
Understanding shareholder rights from both a voting perspective and elsewhere are important for anyone seeking to purchase shares in a public company. Work by securities lawyers, such as Juan Monteverde, can be a critical part of this process, helping to ensure such actions are properly conducted in light of current regulations.