[In]Securities Guest Blog: What's My Name? by Aegis Frumento Esq

November 14, 2019

What's My Name?

"What's in a name?" lamented Juliet. "That which we call a rose, by any other name would smell as sweet." It is a common failing to confuse what we call things for what they are. It is a failing that often results in fights. 

One such fight is now playing out in Philadelphia, where the University of Pennsylvania recently announced it would rename its law school the Carey School of Law.  A $125 million gift from the W.P. Carey Foundation bought it the naming rights. https://www.thedp.com/article/2019/11/penn-law-carey-ruger-rename-town-hall. The Carey family gets that a lot. In addition to the newly named law school (named after W.P. Carey's brother), there's a Carey Business School at Johns Hopkins (named after his great-great-great grandfather); a Carey School of Business at Arizona State (named after himself); and even another Carey School of Law, at the University of Maryland (named after his grandfather).

Of course, there's nothing unusual about naming a thing after a benefactor. It's given a measure of immortality to John Harvard, Elihu Yale, Leland Stanford Jr., Ezra Cornell, and St. Aloysius Gonzaga (though he, being a saint, arguably doesn't need it). Why shouldn't the Careys, too, live forever in academia? And yet, it doesn't seem right. Having two business schools and two law schools named after your family seems a bit presumptuous. Some of us think it's just gross to hang your name in too many places.

You are excused for thinking I have a dim view of the W.P. Carey company and foundation, but you would be wrong. W.P. Carey & Co. is one of the country's most innovative real estate financing firms, and now operates the largest publicly traded net-lease REIT, and a very successful one at that. By all accounts, the company's dedication to being a good corporate citizen is commendable. It publishes a very informative annual report of its environmental, social and governance activities. https://www.wpcarey.com/~/media/Files/WPC/WPC_ESG_Program_2019_July.ashx. It has even registered its slogans "Investing for the Long Run," and "Doing Good While Doing Well" as service marks. I would not have thought slogans like that could be protected. It seems odd that no one else could assert their aspirations in so many words. But there you have it. And I certainly have no qualms with the level of philanthropy practiced by the W.P. Carey Foundation. I'd feel a lot better about a lot of the super-rich if they followed Carey's example.

Still, many in the Penn Law/Carey Law community are up in arms about the renaming. To be a graduate of Penn Law carries a certain cachet that Carey Law lacks, they say. As reported in the campus newspaper, "More than 500 students and alumni have signed a petition demanding the school revert its short-form name from ‘Carey Law' back to ‘Penn Law,' arguing that employers will not recognize the new name, and the prestige of the ‘Penn Law' name will help them with their careers." https://www.thedp.com/article/2019/11/penn-carey-law-school-ruger-donation-renaming.

But surely law firms won't be deceived. The scuffle over the "short-form" of the name seems more likely to be over whether "Carey" or "Penn" will appear on the sweatshirts and coffee mugs sold at the campus bookstore. The fight is entirely about branding, and the battle is being waged across the pages of the newly published Carey Law Branding and Style Guide. You can get a sense of that battle from this small fact: When I started writing it was available online, and it dictated all the various ways and colors one could say "Carey Law" And now, a few short hours later, it's been taken down. Click on this now-deactivated link: 
Since academic tchotchkes inevitably end up on some flea market table, it seems like the typical campus fracas, where the amount of passion is inversely proportional to the stakes.

I think the students and alums of Carey Law, f/k/a Penn Law, will do just fine. What, after all, is in a name? Names come and go. Shea Stadium vanishes and Citi Field emerges. I look out my window at the MetLife building and can barely remember when it was more elegantly emblazoned the PanAm building. Who cares? This is not about the name. Carey's $125 million will allow Penn -- er, I mean Carey -- Law to maintain its place in the law school league tables. It's not even about the money; it's about the rankings.

For better or for worse, we live in a world where everything is measured. It is a management mantra that one cannot manage what one cannot measure. For schools, law schools included, the purportedly manageable measures are the annual rankings, of which those published by U.S. News & World Report appear preeminent. U.S. News & World Report used to be a competitive news mag alongside Time and Newsweek. One can wonder what has or will become of Time and Newsweek, but really does US News do anything these days except publish school rankings?

Anyway, back when I went to law school in the mid-1970s, my alma mater, NYU Law, was ranked 10th or 11th in the country. In those days Columbia Law was generally ranked fourth or fifth, and Penn just below it at sixth or seventh. But the latest US News law school survey ranks Columbia fifth, NYU sixth, and Penn (or Carey) seventh. https://www.usnews.com/best-graduate-schools/top-law-schools/law-rankings. How and when NYU leapfrogged Penn is a tale of -- well, there's no point trying to be poetic because really it's all about the money.

Except that NYU did not have a benefactor like WP Carey. Instead, in one of the luckiest investments of all time, in 1947 NYU Law School borrowed $3.5 million from The Prudential Insurance Company to buy the C.F. Mueller Company. Mueller made, and still makes, macaroni and pasta products. Whatever possessed a law school to acquire a pasta company? Primarily the fact that it threw off dividends that NYU law could use fund its academics. NYU's annual profits from Mueller were never less than $150,000, and by the early 1970s had grown to about $2.25 million.

By the time I got there in 1976, the law school was considered pretty wealthy, but the rest of the University was running unsustainable $10 million annual deficits. The University, not to put too fine a point on it, wanted desperately to get its hands on the law school's pasta company. And, just as desperately, the law school wanted to make sure that the University didn't get its grubby hands on it. And yet, NYU Law couldn't really be a prestigious national law school if it was affiliated with a failing university. One solution floated for a while had the law school seceding from NYU to become Princeton's law school. I don't think anyone would have objected to being a student or graduate of Princeton Law, but it never happened.

Instead, the law school sold the Mueller Company for $115 million, split the proceeds with the University, and kept $67.5 million for its own use in perpetuity.  Read the whole story in the December 26, 1977, issue of the New Yorker, which you can find at https://archives.newyorker.com/newyorker/1977-12-26/flipbook/048/?i=1977-12-26. This was in 1977; in today's dollars, that would be over $390 million. My point is that NYU leapfrogged Penn in the rankings by becoming flush with that which the Carey Foundation just gave to Penn, only three times over. By 1983, NYU was considered "roughly comparable" to Columbia, and that's the way it's been ever since. https://www.nytimes.com/1983/10/09/weekinreview/two-schools-of-thought-divide-two-schools-of-law.html . And that is why Penn -- which, after all, is not destitute -- will even change its name to get its hands on a big pile of scratch. That's what it takes to play the ratings game. Good luck to it.

What's in a name, then? Not really very much. Had the name on my diploma read Mueller Spaghetti Law School, not much would have changed. So, Penn Law, be some other name! Carey Law alums will come in time to understand it doesn't matter a damn.

The ratings don't really matter either, but don't even get me started on that one.

Aegis J. Frumento
Stern Tannenbaum & Bell
Co-Head, Financial Markets Practice

380 Lexington Avenue
New York, NY 10168

Aegis Frumento is a partner of Stern Tannenbaum & Bell, and co-heads the firm's Financial Markets Practice. Mr. Frumento represents persons and businesses in all aspects of commercial, corporate and securities matters and dispute resolution (including trials and arbitrations); SEC and FINRA regulated firms and persons on regulatory compliance issues and in SEC and FINRA enforcement investigations and proceedings; and senior executives of public corporations personal securities law and corporate governance matters.  Mr. Frumento also represents clients in forming and registering broker-dealers and registered investment advisers, in developing compliance policies, procedures and controls, and in adopting proper disclosure documents. Those now include industry professionals looking to adapt blockchain technologies to finance and financial market enterprises.

Prior to joining the firm, Mr. Frumento was a managing director of Citigroup and Morgan Stanley, a partner and the head of the financial markets group of Duane Morris LLP, and the managing partner of Singer Frumento LLP.

He graduated from Harvard College in 1976 and New York University School of Law in 1979. Mr. Frumento is a frequent author and speaker on securities law issues, and is often quoted in the media on current securities law developments.

NOTE: The views expressed in this Guest Blog are those of the author and do not necessarily reflect those of BrokeAndBroker.com Blog. 

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