Digital Commons Network^™

E-Commerce, Cyber, And Electronic Payment System Risks: Lessons From Paypal, Lawrence J. Trautman

Lawrence J. Trautman Sr.

By now, almost without exception, every business has an internet presence, and is likely engaged in e-commerce. What are the major risks perceived by those engaged in e-commerce and electronic payment systems? What potential risks, if they become reality, may cause substantial increases in operating costs or threaten the very survival of the enterprise? This article utilizes the relevant annual report disclosures from eBay (parent of PayPal), along with other eBay and PayPal documents, as a potentially powerful teaching device. Most of the descriptive language to follow is excerpted directly from eBay’s regulatory filings. My additions include weaving these materials …

The Bankruptcy Of The Securities Market Paradigm, Stephen P. Wink

Stephen P Wink

The current paradigm of securities market regulation in the United States rests on the Efficient Market Hypothesis, a theory that has been largely discredited by modern economics and behavioral finance. The Efficient Market Hypothesis assumes that the price of securities in the market accurately incorporates and reflects all available material information. Building on this notion, regulators have assumed that better information leads to healthier markets—and therefore regulation that enhances disclosure and transparency leads to healthier markets. Over time, this reasoning has elevated these tools, disclosure and transparency, to ends in themselves, despite the flaws in the Efficient Market Hypothesis. Although …

Hiv Disclosure As Practice And Public Policy, Barry D. Adam

Barry D Adam

Responses to the largest surveys of HIV-positive people in Ontario show that most either disclose to or do not have partners who are HIV-negative or of unknown status. Non-disclosure strategies and assumptions are reported by relatively small sets of people with some variation according to employment status, sexual orientation, gender, ethnicity, and having had a casual partner. Interviews with 122 people living with HIV show that disclosure is an undertaking fraught with emotional pitfalls complicated by personal histories of having misread cues or having felt deceived leading up to their own sero-conversion, then having to negotiate a stigmatized status with …

E-Commerce And Electronic Payment System Risks: Lessons From Paypal, Lawrence J. Trautman

Lawrence J. Trautman Sr.

What are the major risks perceived by those engaged in e-commerce and electronic payment systems? What development risks, if they become reality, may cause substantial increases in operating costs or threaten the very survival of the enterprise? This article utilizes the relevant annual report disclosures from eBay (parent of PayPal), along with other eBay and PayPal documents, as a potentially powerful teaching device. Most of the descriptive language to follow is excerpted directly from eBay’s regulatory filings. My additions include weaving these materials into a logical presentation and providing supplemental sources for those who desire a deeper look (usually in …

The Infringement Continuum, Bernard H. Chao

Bernard H Chao

For many years, patent law has struggled with the issue of permissible claim scope. A patent’s specification and its claims often suffer from a surprising disconnect. The specification generally describes an invention in terms of one or more specific implementations; suggesting a relatively narrow invention. But claims are drafted far more broadly. They frequently encompass unforeseen variations and even cover after arising technology.

Although there are numerous existing doctrines that try to prevent claims from straying too far from their specification, these doctrines offer binary outcomes ill-suited for patent law. Under these doctrines, as a claim encompasses subject matter further …

E-Commerce And Electronic Payment System Risks: Lessons From Paypal, Lawrence J. Trautman

Lawrence J. Trautman Sr.

What are the major risks perceived by those engaged in e-commerce and electronic payment systems? What development risks, if they become reality, may cause substantial increases in operating costs or threaten the very survival of the enterprise? This article utilizes the relevant annual report disclosures from eBay (parent of PayPal), along with other eBay and PayPal documents, as a potentially powerful teaching device. Most of the descriptive language to follow is excerpted directly from eBay’s regulatory filings. My additions include weaving these materials into a logical presentation and providing supplemental sources for those who desire a deeper look (usually in …

Is The Prototypical Small Inventor At Risk Of Inadvertently Eliminating Their Traditional One-Year Grace Period Under The America Invents Act?, Eric A. Kelly

Eric A Kelly

This Comment interprets new statutory language appearing in the Leahy-Smith America Invents Act, effective March 16, 2013, regarding what may constitute prior art and how prior art triggers the new one-year grace period. If this interpretation is followed, the vitally necessary grace period will continue to be accessible to inventors, especially small inventors. Specifically, this Comment recommends interpreting “or otherwise available to the public” as a public accessibility condition precedent that must be satisfied in order for public use and on sale events to constitute prior art; which as prior art then triggers the one-year grace period in which to …

Informazione, Adeguatezza E Rimedi Nelle Operazioni Di Investimento, Valerio Sangiovanni

Valerio Sangiovanni

No abstract provided.

Direct And Enhanced Disclosure Of Researcher Financial Conflicts, Roy G. Spece Jr.

Roy G Spece Jr.

Abstract of DIRECT AND ENHANCED DISCLOSURE OF RESEARCHER FINANCIAL CONFLICTS OF INTEREST: THE ROLE OF TRUST In earlier writing I recommended direct disclosure of a major researcher financial conflict of interest, per capita funding—i.e., providing a fixed sum per subject recruited and enrolled in a study. This article adds a recommendation for enhanced direct disclosure. The enhancement in the disclosure is a summary of why per capita and excess payments are being discussed. The reason they are being discussed is because of their risk of introducing bias into researchers’ decisions regarding study design, implementation, and interpretation as well as concerning …

Congressional Disclosure Of Time Spent Fundraising, Robert Brent Ferguson

Robert Brent Ferguson

This Article advocates passage of a law requiring members of Congress to disclose the amount of time they spend fundraising.

In the wake of Citizens United and other court decisions severely limiting lawmakers’ ability to regulate campaign spending, many scholars have turned their focus to campaign finance disclosure laws. According to some, laws requiring campaigns and donors to reveal the source of contributions and expenditures are the last bastion of federal campaign finance law. Yet despite a history of broad acceptance, disclosure laws rest on an increasingly shaky foundation.

The most troubling aspect of current disclosure law is that it …

Private Lawmaking And The Architecture Of Confidentiality In Nonprofit Boardrooms, Norman I. Silber

Norman I. Silber

Abstract

Placement of the boundary line between transparent and confidential deliberation inside a boardroom affects the quality, efficiency, and fairness of corporate decision making. Policies which do not insist upon confidentiality can improve the perceived legitimacy of decisions and of those who make them; confidentiality can improve the ability to implement decisions effectively. The degree of transparency facilitated by these policies affects the volume and quality of available information. In the nonprofit boardroom, the boundaries that are set by governance rules also reflect and give shape to institutional structures and cultural norms.

This article explores justifications for changing from a …

A Turbulent Adolescence Ahead: The Icc’S Insistence On Disclosure In The Lubanga Trial, Christodoulos Kaoutzanis

Christodoulos Kaoutzanis

The completion of the first trial at the International Criminal Court (‘ICC’), against Thomas Lubanga Dyilo, was a great milestone for international criminal justice. Despite this obvious accomplishment, this paper argues that the Trial Chamber’s solutions to two evidentiary problems will restrict the ICC’s potential to effectively hear future cases. First, this paper presents the details behind the two evidentiary problems of disclosure, that of exculpatory confidential information and that of the identities of the Prosecutor’s intermediaries. This analysis is undertaken in an exhaustive manner, in order to highlight the challenges that the Prosecutor faced and the manner in which …

Dual Real Estate Agents And The Double Duty Of Loyalty, Mary Szto

Mary Szto

Our present housing crisis is related in part to practices of real estate agents. This article addresses the top three issues that cause the most disputes for agents. They are dual agency, disclosure, and breach of fiduciary duty. Despite legislative efforts in the past two decades to clarify and reduce the duties of dual agents, agents and consumers are still confused about agents who represent both sellers and buyers. They owe double, not half the loyalty owed to one principal.

The stakes are high because home ownership is critical to our economic recovery and the chief source of wealth for …

Consumer Protection Out Of The Shadows Of Shadow Banking: The Role Of The Consumer Financial Protection Bureau, David J. Reiss

David J Reiss

Consumer protection remains the stepchild of financial regulation. Notwithstanding the fact that the economic doldrums we find ourselves in originated in the under-regulated subprime mortgage sector, relatively few academic commentators focus on the role that consumer protection can play in reducing such risks as well as in restoring the balance between consumer and producer in the financial markets. This essay suggests that consumer protection regulation has an important role to play in the regulatory structure of the shadow banking sector.

This essay does four things. First, it describes the role of shadow banking in the residential mortgage market—the shadow mortgage …

Did Learned Hand Get It Wrong?: The Questionable Patent Forfeiture Rule Of Metallizing Engineering Co. V. Kenyon Bearing & Auto Parts Co., Dmitry Karshtedt

Dmitry Karshtedt

As Congress stands on the verge of passing patent reform legislation that will grant patent priority to those who are first to file rather than first to invent, an old chestnut of a case penned by Judge Learned Hand some 65 years ago has attracted the attention of lawmakers and commentators. The case of Metallizing Engineering Co. v. Kenyon Bearing & Auto Parts Co. dealt with the thorny problem of granting patents those who have, for some time before patenting, practiced their inventions in secret. The Second Circuit held that one who competitively exploits a secret invention at a time …

Absolute Immunity: A License To Rape Justice At Will, Prentice L. White

Prentice L White

ABSOLUTE IMMUNITY: A LICENSE TO RAPE JUSTICE AT WILL BY PRENTICE L. WHITE We are all acquainted with the phrase the sanctity of marriage. We understand that the vows made by a couple at the wedding ceremony is sacrosanct, and if those vows are not taken seriously, or abused in any way, then the offending spouse will be penalized and evicted from the marital relationship. Likewise, justice should be handled in the same manner and with the same intensity. America prides itself on having the best legal system in the world. It broadcasts to all the surrounding nations that its …

"Enlightened Shareholder Value": Corporate Governance Beyond The Shareholder-Stakeholder Divide, Virginia E. Ho

Virginia E Ho

The global financial crisis has led to calls for greater corporate accountability and heightened controls over public corporations. As a result, the past year has seen a marked increase in regulatory initiatives that give shareholders a greater voice in corporate affairs. While debate continues to rage in the academy and beyond over the promise and pitfalls of shareholder empowerment, an important undercurrent in the controversy is the potential impact of "shareholder democracy" on corporate stakeholders.

This Article urges a vision of the corporation and its purpose that transcends the shareholder-stakeholder divide. Under this "enlightened shareholder value" approach, which has been …

Placebo Ethics, Usha Rodrigues, Mike Stegemoller

Usha Rodrigues

While there are innumerable theories on the best remedy for the current financial crisis, there is agreement on one point, at least: increased transparency is good. We look at a provision from the last round of financial regulation, the Sarbanes Oxley Act of 2002 (“SOX”), which imposed disclosure requirements tailored to prevent some of the kinds of abuses that led to the downfall of Enron. In response to Enron’s self-dealing transactions, Section 406 of SOX required a public company to disclose its code of ethics and to disclose immediately any waivers from that code the company grants to its top …

Secret Liens And The Financial Crisis Of 2008, Michael N. Simkovic

Michael N Simkovic

This article explains the roots of financial crises in one of the oldest and most fundamental problems of commercial law: hidden leverage. Common law courts wrestled with this problem for centuries and developed a time-tested solution: the doctrine of secret liens. If the debtor becomes insolvent, the doctrine of secret liens punishes secret lien holders by subordinating their claims to those of other creditors. In other words, by overriding privately negotiated payment priorities, the doctrine of secret liens creates incentives for transparency. This article argues that legal changes over the last 80 years eroded the doctrine of secret liens, and …

Warming Up To Climate Change Risk Disclosure, Jeffrey M. Mcfarland

Jeffrey M McFarland

No abstract provided.

Hedge Funds’ Empty Voting In Mergers And Acquisitions: A Fiduciary Duties Perspective, Andrea Zanoni

Andrea Zanoni

Hedge funds have become lately active also in the market for corporate control. Their active involvement has been propelled by a tactic allowing them to decouple voting rights from economic ownership and labelled in the literature as “encumbered shares” or “empty voting”.

The aim of this Article is twofold. On the one hand, I address the impact of hedge funds’ activism on the financial markets and on the portfolio companies. In general terms, hedge funds’ activism should be seen as a neutral element. After a cost-benefit analysis, I show that the costs implied by hedge funds’ activism are at least …

Interpretation And Disclosure In Insurance Contracts, David Schwartz

David Schwartz

This Essay has two goals: one descriptive and one normative. Descriptively, it explicates the connection between interpretation of insurance contracts and the Insurer’s disclosure duty. Disclosure duties and interpretation rules constitute a two way street. The interpretation of insurance contracts by courts, ex post, influences the incentives of insurance companies to disclose information consumers, ex ante. Correspondingly, the scope of ex ante disclosure by insurance companies impacts the willingness of courts to use overwrite insurance contracts by broadly interpreting provision to increase the liability of insurance companies. To illustrate this claim, the Essay discusses the two principal interpretive tools used …

No More Secret Laws: How Transparency Of Executive Branch Legal Policy Doesn't Let The Terrorists Win, Sudha Setty

Sudha Setty

The rule of law in a democratic nation demands that the laws governing people are not secret. Yet parts of the executive branch’s legal policy that govern aspects of the current war on terror are laid out in non-public opinions issued the Department of Justice’s Office of Legal Counsel. Many of those opinions, which are almost always binding on the executive branch and are used to provide legal comfort to government officials in the form of protection against future investigation or prosecution, are still secret or were kept secret for years before being leaked or disseminated to Congress and the …

The Effect Of 2005 Bankruptcy Reform On Credit Card Industry Profits And Prices, Michael N. Simkovic

Michael N Simkovic

The U.S. Bankruptcy code changed dramatically with the passage of The Bankruptcy Abuse Prevention and Consumer Protection Act Of 2005. This act increased the costs and decreased the benefits of bankruptcy to consumers. Supporters of the law claimed that it would benefit consumers as well as creditors, because reducing the losses faced by creditors would lower the cost of credit to consumers. Critics of the law depicted it as special interest legislation designed to profit credit card companies at the expense of consumers. This study tests whether the 2005 Bankruptcy Reform: (1) reduced the number of bankruptcies; (2) reduced credit …

The Effect Of Enhanced Disclosure On Open Market Stock Repurchases, Michael N. Simkovic

Michael N Simkovic

Publicly traded companies distribute cash to shareholders either through dividends or through anonymous repurchases of the companies’ own stock on the open market. Companies must announce a repurchase authorization, but do not actually have to repurchase any stock, and until recently did not have to disclose whether or not they were in fact repurchasing any stock. Scholars and regulators noticed that companies frequently announced repurchases but then appeared not to complete them. They feared that such announcements might be used by insiders to exploit public investors. To reduce opportunities for exploitive behavior, the SEC required that companies disclose their repurchase …

Mutual Fund Investors: Divergent Profiles, Alan R. Palmiter, Ahmed E. Taha

Ahmed E Taha

Mutual funds are owned by almost half of all U.S. households, manage over $12 trillion dollars in assets, and have become a primary vehicle for retirement and investment savings in the United States. Who are mutual fund investors? The answer is critical to regulatory policy for the mutual fund industry. Fund investors, by selecting the funds in which they invest, play a central role in determining asset allocation and in controlling the fees and expenses that funds charge. Thus, the functioning of the mutual fund market turns on the knowledge and financial sophistication of fund investors.

This article examines the …

The "Duty" To Be A Rational Shareholder, David A. Hoffman

David A Hoffman

How and when do courts determine that corporate disclosures are actionable under the federal securities laws? The applicable standard is materiality: would a (mythical) reasonable investor have considered a given disclosure important. As I establish through empirical and statistical testing of approximately 500 cases analyzing the materiality standard, judicial findings of immateriality are remarkably common, and have been stable over time. Materiality's scope results in the dismissal of a large number of claims, and creates a set of cases in which courts attempt to explain and defend their vision of who is, and is not, a reasonable investor. Thus, materiality …

Disclosure Of Hiv Infection: How Do Women Decide To Tell?, R.L. Sowell, B.F. Seals, Kenneth D. Phillips, C.H. Julious

Kenneth D. Phillips

This descriptive study explores the phenomenon of disclosure of HIV infection by women. Specifically, we examined women’s level of disclosure to various groups and how these disclosure decisions are made. The sample consisted of 322 HIV-infected women residing in the southern US. Participants were predominantly African-American, single women of reproductive age with yearly incomes less than $10 000. Data were collected at the first interview of a longitudinal study of reproductive decision making. Findings showed that the majority of the women had disclosed to some sex partners, close family and friends, and health care professionals. However, for a group of …