Mirror SceneI continue my Marx Brothers’ themed week by today looking at what I and many others believe to be their most cherished routine: the Mirror Scene. Danny Leigh, in his article in the Financial Times (FT), entitled “Souped-up comedy”, wrote, “The set-up is deathlessly simple. Fredonia’s President, Groucho in nightgown and cap finds Harpo, a spy from neighboring Sylvania, in his bedroom. They chase each other down some stairs and face off in front of each other, dressed identically. Harpo, the spy and intruder pretends to be Groucho’s reflection, and the two brothers spend the next three minutes locked in a mad dance of mimicry. The result is flawless, the kind of ecstatic comedy in which the world outside the cinema simply falls away. Variations on the skit had been performed by others before but the brothers raised it to undreamt absurdist heights, claiming it for ever as their own.” So you have Pinky (Harpo), dressed as Firefly (Groucho), pretending to be Firefly’s reflection in a missing mirror, matching his every move—including absurd ones that begin out of sight—to near perfection. In one particularly surreal moment, the two men swap positions, and thus the idea of which is a reflection of the other. The scene is absolutely silent until Chicolini (Chico), also disguised as Firefly, enters the scene and collides with both of them and sound resumes.

Although its appearance in Duck Soup is the best-known instance, the concept of the mirror scene did not originate in this film. Max Linder included it in Seven Years Bad Luck (1921), where a man’s servants have accidentally broken a mirror and attempt to hide the fact by imitating his actions in the mirror’s frame. Charlie Chaplin used a similar joke in The Floorwalker (1916), though it didn’t involve a mirror. This scene has been recreated many times from entertainment as diverse as Bugs Bunny cartoons, to the televisions series Gilligan’s Island and even in a The X-Files episode. Harpo himself did a reprise of this scene, dressed in his usual costume, with Lucille Ball also donning the fright wig and trench coat, in the I Love Lucy episode “Lucy and Harpo Marx”.

I find it to be absurdist comedy at its ultimate height. To this day, I almost cry I laugh so hard when I see that scene. While you may not find it quite as funny as I did, most probably one thing you will also not find funny is an ongoing debate in both academia and in legal circles involving a question on corporate governance as reported in the New York Times (NYT) in the Dealbook column by Andrew Ross Sorkin, in an article entitled “An Unusual Boardroom Battle, in Academia”. The question staggered elections of corporate board members or whether the entire slate of Board members be elected, up or down, each year.

On the side of full Board, up or down voting is Professor Lucian A. Bebchuk, a Harvard Law School professor who has long researched corporate governance issues and has been an outspoken advocate for increased democracy in corporate America’s boardrooms and his group, the Harvard’s Shareholder Rights Project. Professor Bebchuk believes staggered election of Board members “silences shareholders, entrenches management and makes it less likely that suitors or activists will emerge, depressing valuations.”

On the other side of the dispute are Daniel M. Gallagher, a member of the Securities and Exchange Commission (SEC), and Joseph A. Grundfest, a professor at Stanford Law School and a former SEC commissioner, who co-authored a paper entitled “Did Harvard Violate Federal Securities Law? The Campaign Against Classified Boards of Directors.” The paper is in opposition to Bebchuk’s position. Sorkin observed that “Mr. Gallagher and Mr. Grundfest suggest that companies are dropping their staggered board structures — and shareholders are voting to eliminate them — based, in part, on faulty research by Harvard’s Shareholder Rights Project. Worse.” But here is the kicker and what moves this rather arcane academic debate into the realm of the absurd. “They suggest, Mr. Bebchuk’s project committed fraud by not fully disclosing the extent of contradictory research, which they say is a “material omission” by S.E.C. standards.” Yes sports fans, a sitting SEC commissioner suggested in writing that Harvard had engaged in a securities law violation.

As Sorkin noted, “there’s the fundamental issue of whether a sitting member of the S.E.C. should be writing such an incendiary paper in the first place.” Sorkin quoted an email comment made by Professor Robert J. Jackson Jr., from Columbia Law School. Jackson wrote to Sorkin in an email “All should agree that it is wildly inappropriate for a sitting S.E.C. commissioner to issue a law review paper accusing a private party of violating federal securities law without any investigation or due process of any kind. This is a striking, and as far as I know unprecedented, departure from longstanding S.E.C. practice.” Jackson went on to say “Imagine if a sitting S.E.C. commissioner wrote a law review article accusing Goldman Sachs of violating federal law without any S.E.C. investigation of the matter — Goldman and their counsel would quite rightly be outraged.”

Near the end of his article, Sorkin stated, “There are many opposing views on the paper. But here’s one way to think about it: It was a bad precedent for Mr. Gallagher to involve himself in a paper that raises the possibility of fraud in the field he regulates without the due process of a legal complaint. Mr. Grundfest could have written this provocative paper on his own, though it might not have attracted the same amount of attention within the industry.”

I would ask you to imagine if any of the Department of Justice (DOJ) attorneys who work in the Foreign Corrupt Practices Act (FCPA) area were to write an article, law review or other, that said not only is an entity’s position on interpretation of the FCPA wrong, its interpretation in practice is a FCPA violation. Do you think such corporation or entity would feel like they would get a fair shake from such prosecutors? Think any bias might exist going forward? While I have been one of the loudest advocates for the DOJ making more information on its FCPA declinations more public, SEC Commissioner Gallagher’s paper, demonstrates a very good reason for the DOJ not making any such information public: i.e. due process and fairness. Just as bad facts can certainly lead to bad law, this action by a sitting SEC Commissioner to even imply that an entity violated US Securities Laws in an article is not a road that we want to begin to go down.

For a clip of the famous Mirror Scene, click here.

This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. The author can be reached at tfox@tfoxlaw.com.

© Thomas R. Fox, 2015

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