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Articles 1 - 30 of 37
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10 Things Judges Should Know About Cryptocurrency, Lee Reiners
10 Things Judges Should Know About Cryptocurrency, Lee Reiners
Faculty Scholarship
No abstract provided.
The Law Of Corporate Investigations And The Global Expansion Of Corporate Criminal Enforcement, Jennifer Arlen, Samuel W. Buell
The Law Of Corporate Investigations And The Global Expansion Of Corporate Criminal Enforcement, Jennifer Arlen, Samuel W. Buell
Faculty Scholarship
The United States model of corporate crime control, developed over the last two decades, couples a broad rule of corporate criminal liability with a practice of reducing sanctions, and often withholding conviction, for firms that assist enforcement authorities by detecting, reporting, and helping prove criminal violations. This model, while subject to skepticism and critiques, has attracted interest among reformers in overseas nations that have sought to increase the frequency and size of their enforcement actions. In both the U.S. and abroad, insufficient attention has been paid to how laws controlling the conduct of corporate investigations are critical to regimes of …
More Meaningful Ethics, Veronica Root Martinez
More Meaningful Ethics, Veronica Root Martinez
Faculty Scholarship
Firms have exponentially increased their investment in the creation and implementation of ethics and compliance programs over the past fifteen years. The convergence of more robust corporate enforcement actions and more sophisticated industry standards and practices surrounding compliance efforts has created a booming compliance industry with commonly accepted standards and responsibilities. Within these efforts is a formal acknowledgment by the government, industry leaders, and academics that ethics has a role to play in helping to prevent misconduct within firms and that compliance without concern for ethics is insufficient. The reality, however, is that within firms’ efforts to implement effective ethics …
Declining Corporate Prosecutions, Brandon L. Garrett
Declining Corporate Prosecutions, Brandon L. Garrett
Faculty Scholarship
In the aftermath of the Global Financial Crisis, people across the United States protested that "too big to jail" banks were not held accountable after the financial crisis. Little has changed. Newly collected data concerning enforcement during the Trump Administration has made it possible to assess what impact a series of new policies has had on corporate enforcement. To provide a snapshot comparison, in its last twenty months, the Obama Administration levied $I4.15 billion in total corporate penalties by prosecuting seventy-one financial institutions and thirty-four public companies. During the first twenty months of the Trump Administration, corporate penalties declined to …
Fossil Fortunes: Regulating Commercial Paleontology & Incentivizing Fossil Discovery, Ashlee A. Paxton-Turner
Fossil Fortunes: Regulating Commercial Paleontology & Incentivizing Fossil Discovery, Ashlee A. Paxton-Turner
Faculty Scholarship
No abstract provided.
Empowering The Poor: Turning De Facto Rights Into Collateralized Credit, Steven L. Schwarcz
Empowering The Poor: Turning De Facto Rights Into Collateralized Credit, Steven L. Schwarcz
Faculty Scholarship
The shrinking middle class and the widening gap between the rich and the poor constitute significant threats to social and financial stability. One of the main impediments to upward mobility is the inability of economically disadvantaged people to use their property — in which they sometimes hold only de facto, not de jure, rights — as collateral to obtain credit. This Article argues that commercial law should recognize those de facto rights, enabling the poor to borrow to start businesses or otherwise create wealth. Recognition not only would provide benefits that exceed its costs; it also would be consistent with, …
Criminally Bad Management, Samuel W. Buell
Criminally Bad Management, Samuel W. Buell
Faculty Scholarship
Because of their leverage over employees, corporate managers are prime targets for incentives to control corporate crime, even when managers do not themselves commit crimes. Moreover, the collective actions of corporate management — producing what is sometimes referred to as corporate culture — can be the cause of corporate crime, not just a locus of the failure to control it. Because civil liability and private compensation arrangements have limited effects on management behavior — and because the problem is, after all, crime — criminal law is often expected to intervene. This handbook chapter offers a functional explanation for corporate criminal …
Delaware's Retreat: Exploring Developing Fissures And Tectonic Shifts In Delaware Corporate Law, James D. Cox, Randall S. Thomas
Delaware's Retreat: Exploring Developing Fissures And Tectonic Shifts In Delaware Corporate Law, James D. Cox, Randall S. Thomas
Faculty Scholarship
No abstract provided.
Does Contract Law Need Morality?, Kimberly D. Krawiec, Wenhao Liu
Does Contract Law Need Morality?, Kimberly D. Krawiec, Wenhao Liu
Faculty Scholarship
In The Dignity of Commerce, Nathan Oman sets out an ambitious market theory of contract, which he argues is a superior normative foundation for contract law than either the moralist or economic justifications that currently dominate contract theory. In doing so, he sets out a robust defense of commerce and the market-place as contributing to human flourishing that is a refreshing and welcome contribution in an era of market alarmism. But the mar-ket theory ultimately falls short as either a normative or prescriptive theory of contract. The extent to which law, public policy, and the-ory should account for values …
Why Do Prosecutors Say Anything? The Case Of Corporate Crime, Samuel W. Buell
Why Do Prosecutors Say Anything? The Case Of Corporate Crime, Samuel W. Buell
Faculty Scholarship
Criminal procedure law does not require prosecutors to speak outside of court. Professional regulations and norms discourage and sometimes prohibit prosecutors from doing so. Litigation often rewards strategic and tactical maintenance of the element of surprise. Institutional incentives encourage bureaucrats, especially those not bound by procedural requirements of administrative law, to decline to commit themselves to future action. In the always exceptional field of corporate crime, however, the Department of Justice and federal line prosecutors have developed practices of signaling and describing their exercise of discretion through detailed press releases, case filings, and policy documents. This contribution to a symposium …
The Role Of Social Enterprise And Hybrid Organizations, Ofer Eldar
The Role Of Social Enterprise And Hybrid Organizations, Ofer Eldar
Faculty Scholarship
Recent years have brought remarkable growth in hybrid organizations that combine profit-seeking and social missions. Despite popular enthusiasm for such organizations, legal reforms to facilitate their formation and growth—particularly, legal forms for hybrid firms—have largely been ineffective. This shortcoming stems in large part from the lack of a theory that identifies the structural and functional elements that make some types of hybrid organizations more effective than others. In pursuit of such a theory, this Article focuses on a large class of hybrid organizations that has been effective in addressing development problems, such as increasing access to capital and improving employment …
Corporate Officers As Agents, Deborah A. Demott
Corporate Officers As Agents, Deborah A. Demott
Faculty Scholarship
Although officers are crucial to corporate operations, scholarly and theoretical accounts tend to slight officers and amalgamate them with directors into a single category, "managers." This essay anchors officers within the common law of agency-as does black-letter law-which crisply differentiates officers from directors. Understanding that agency is central of the legal account of officers' positions and responsibilities is crucial to seeing why, like directors, officers are fiduciaries, but distinctively so, not as instances of generic "corporate fiduciaries." Officers, like directors, owe duties of loyalty, but also particularized duties of care, competence, and diligence. Additionally, officers' duties of performance encompass two …
Regulatory Competition And The Market For Corporate Law, Ofer Eldar, Lorenzo Magnolfi
Regulatory Competition And The Market For Corporate Law, Ofer Eldar, Lorenzo Magnolfi
Faculty Scholarship
This article develops an empirical model of firms’ choice of corporate laws under inertia. Delaware dominates the incorporation market, though recently Nevada, a state whose laws are highly protective of managers, has acquired a sizable market share. Using a novel database of incorporation decisions from 1995- 2013, we show that most firms dislike protectionist laws, such as anti-takeover statutes and liability protections for officers, and that Nevada’s rise is due to the preferences of small firms.Our estimates indicate that despite inertia, Delaware would lose significant market share and revenues if it adopted protectionist laws. Our findings support the hypothesis that …
Controlling Systemic Risk Through Corporate Governance, Steven L. Schwarcz
Controlling Systemic Risk Through Corporate Governance, Steven L. Schwarcz
Faculty Scholarship
Most of the regulatory measures to control excessive risk taking by systemically important firms are designed to reduce moral hazard and to align the interests of managers and investors. These measures may be flawed because they are based on questionable assumptions. Excessive corporate risk taking is, at its core, a corporate governance problem. Shareholder primacy requires managers to view the consequences of their firm’s risk taking only from the standpoint of the firm and its shareholders, ignoring harm to the public. In governing, managers of systemically important firms should also consider public harm. This proposal engages the long-standing debate whether …
Market Information And The Elite Law Firm, Elisabeth De Fontenay
Market Information And The Elite Law Firm, Elisabeth De Fontenay
Faculty Scholarship
As a subcategory of contract negotiations, corporate transactions present information problems that have not been fully analyzed. In particular, the literature does not address the possibility that parties may simply be unaware of value-increasing transaction terms or their outside option. Such unawareness can arise even for transactions that attract many competing parties, if the bargaining process is such that (1) the price terms are negotiated and fixed prior to the non-price terms, contrary to the standard assumption; and (2) some of the non-price terms remain private for some period of time.
A simple bargaining model shows that, when such unawareness …
Brief Of Professors At Law And Business Schools As Amicus Curiae In Support Of Respondents, James D. Cox, J. Robert Brown Jr., Lyman Johnson, Lawrence W. Treece, Joan Macleod Heminway
Brief Of Professors At Law And Business Schools As Amicus Curiae In Support Of Respondents, James D. Cox, J. Robert Brown Jr., Lyman Johnson, Lawrence W. Treece, Joan Macleod Heminway
Faculty Scholarship
This Amicus Brief was filed with the U.S. Supreme Court on behalf of nearly 50 law and business faculty in the United States and Canada who have a common interest in ensuring a proper interpretation of the statutory securities regulation framework put in place by the U.S. Congress. Specifically, all amici agree that Item 303 of the Securities and Exchange Commission's Regulation S-K creates a duty to disclose for purposes of Rule 10b-5(b) under the Securities Exchange Act of 1934.
The Court’s affirmation of a duty to disclose would have little effect on existing practice. Under the current state of …
The Responsibility Gap In Corporate Crime, Samuel W. Buell
The Responsibility Gap In Corporate Crime, Samuel W. Buell
Faculty Scholarship
In many cases of criminality within large corporations, senior management does not commit the operative offense — or conspire or assist in it — but nonetheless bears serious responsibility for the crime. That responsibility can derive from, among other things, management’s role in cultivating corporate culture, in failing to police effectively within the firm, and in accepting lavish compensation for taking the firm’s reins. Criminal law does not include any doctrinal means for transposing that form of responsibility into punishment. Arguments for expanding doctrine — including broadening of the presently narrow “responsible corporate officer” doctrine — so as to authorize …
Modern-Day Monitorships, Veronica Root
Modern-Day Monitorships, Veronica Root
Faculty Scholarship
When a sexual abuse scandal rocked Penn State, when Apple was found to have engaged in anticompetitive behavior, and when servicers like Bank of America improperly foreclosed upon hundreds of thousands of homeowners, each organization entered into a "Modern-Day Monitorship”. Modern-day monitorships are utilized in an array of contexts to assist in widely varying remediation efforts. This is because they provide outsiders with a unique source of information about the efficacy of the tarnished organization's efforts to resolve misconduct. Yet, despite their use in high profile and serious matters of organizational wrongdoing, they are not an outgrowth of careful study …
Defining Agency And Its Scope (Ii), Deborah A. Demott
Defining Agency And Its Scope (Ii), Deborah A. Demott
Faculty Scholarship
Fiduciary law necessarily raises issues of delineation and demarcation, which this paper demonstrates through examples involving common-law agents. Serving as an agent, and thus as a fiduciary, does not necessarily mean that agency law prescribes all duties that the agent owes the principal. The agent may have rights external to the relationship that the agent may exercise, distinct from the duty of loyalty owed the principal. When an agent acts outside the bounds of an agency relationship, the principal’s consent is not requisite to conduct that would constitute disloyalty within the bounds of the agency relationship. The paper illustrates the …
Fiduciary Breach, Once Removed, Deborah A. Demott
Fiduciary Breach, Once Removed, Deborah A. Demott
Faculty Scholarship
No abstract provided.
The Governance Structure Of Shadow Banking, Steven L. Schwarcz
The Governance Structure Of Shadow Banking, Steven L. Schwarcz
Faculty Scholarship
No abstract provided.
The Fiduciary Character Of Agency And The Interpretation Of Instructions, Deborah A. Demott
The Fiduciary Character Of Agency And The Interpretation Of Instructions, Deborah A. Demott
Faculty Scholarship
This chapter in a forthcoming book justifies the conventional characterization of common-law agency as a fiduciary relationship. An agent serves as the principal’s representative in dealings with third parties and facts about the world, situating the agent as an extension of the principal for legally-salient purposes. A principal’s power to furnish instructions to the agent is the fundamental mechanism through which the principal exercises control over the agent, a requisite for an agency relationship. The agent’s fiduciary duty to the principal provides a benchmark for the agent’s interpretation of those instructions. The chapter draws on philosophical literature on the identity …
Towards More Sustainable And Less Crisis-Driven Financial Regulation, Steven L. Schwarcz
Towards More Sustainable And Less Crisis-Driven Financial Regulation, Steven L. Schwarcz
Faculty Scholarship
No abstract provided.
Legal Medievalism In Lex Mercatoria Scholarship, Ralf Michaels
Legal Medievalism In Lex Mercatoria Scholarship, Ralf Michaels
Faculty Scholarship
This short reaction piece to an article by Emily Kadens asks why a long-refuted story of an alleged uniform medieval lex mercatoria is still being maintained. The answer is that the story serves not as an actual history but instead as a foundation myth. Attempts to falsify the myth with historical data are therefore futile: the myth derives its value not from its truth value but from its symbolic power.
Somebody's Watching Me: Fcpa Monitorships And How They Can Work Better, F. Joseph Warin, Michael S. Diamant, Veronica S. Root
Somebody's Watching Me: Fcpa Monitorships And How They Can Work Better, F. Joseph Warin, Michael S. Diamant, Veronica S. Root
Faculty Scholarship
This article explores the rise of the corporate compliance monitor as a condition for settling violations of the U.S. Foreign Corrupt Practices Act (“FCPA”) — a setting in which federal prosecutors routinely impose monitors. If U.S. enforcement authorities maintain their current approach, the reality is that companies facing liability for violating the FCPA are likely to have a monitor imposed on them as part of a settlement agreement. From the U.S. government’s perspective, monitorships make sense for companies that violate anti-bribery laws, making it important for offending corporations to learn how to deal with monitors. Pulling from the authors’ extensive …
Distorting Legal Principles, Steven L. Schwarcz
Distorting Legal Principles, Steven L. Schwarcz
Faculty Scholarship
Legal principles enable society to order itself by preserving broadly based expectations. Sometimes, however, parties transact in ways that are so inconsistent with generally accepted principles as to create uncertainty or confusion that undermines the basis for reasoning afforded by the principles. Such a distortion might occur, for example, if a normally mandatory legal rule were unexpectedly treated as a default rule. This article explores the problem of distorting legal principles, initially focusing on rehypothecation, a distortion whose uncertainty and confusion contributed to the downfall of Lehman Brothers and the resulting global financial crisis. But not all distortions are, on …
Preamble I: Purposes, Legal Nature, And Scope Of The Picc; Applicability By Courts; Use Of The Picc For The Purpose Of Interpretation And Supplementation And As A Model, Ralf Michaels
Faculty Scholarship
Professor Michael's chapter provides commentary on Preamble I of the UNIDROIT Principles of International Commercial Contracts. Areas covered include purposes, legal nature and scope of the PICC; applicability by courts; use of the PICC for the purpose of interpretation and supplementation and as a model.
Altruism And Intermediation In The Market For Babies, Kimberly D. Krawiec
Altruism And Intermediation In The Market For Babies, Kimberly D. Krawiec
Faculty Scholarship
Central to every legal system is the principle that certain items are off-limits to commercial exchange. In theory, babies are one such sacred object. This supposed ban on baby selling has been lamented by those who view commercial markets as the most efficient means of allocating resources, and defended by those who contend that commercial markets in parental rights commodify human beings, compromise individual dignity, or jeopardize fundamental values. However, the supposed and much-discussed baby selling ban does not, and is not intended to, eliminate commercial transactions in children. Instead, it is an asymmetric legal restriction that limits the ability …
Introduction: Beyond The State? Rethinking Private Law, Ralf Michaels, Nils Jansen
Introduction: Beyond The State? Rethinking Private Law, Ralf Michaels, Nils Jansen
Faculty Scholarship
Introduction to an issue of the journal that brings together the papers presented, as revised by the participants, at a conference held at the Max Planck Institute for Comparative and International Private Law in Hamburg, Germany in the summer of 2007.
Classified Boards And Firm Value, Michael D. Frakes
Classified Boards And Firm Value, Michael D. Frakes
Faculty Scholarship
Classified boards constitute one of the most potent takeover defenses for U.S. firms today. However, as with takeover defenses more generally, economic theory offers an ambiguous prediction as to the effect that classified boards have on bottom-line firm value. A resolution of this ambiguity will require sound and convincing empirical methodology. In an effort to address limitations in the existing empirical literature, this article approaches the relationship between corporate governance and firm value while taking various measures to account for unobserved sources of heterogeneity across firms. Using the instrumental variables model developed by Hausman and Taylor, I find evidence of …