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Full-Text Articles in Law
A Cautionary Look At A Cautionary Doctrine, Andrew W. Fine
A Cautionary Look At A Cautionary Doctrine, Andrew W. Fine
Brooklyn Journal of Corporate, Financial & Commercial Law
Optimism is an indispensable element of effective salesmanship. It is therefore quite natural for the directors of public companies to want to optimistically tout the potential long-term benefits of investing in their companies. After all, directors of public companies must be empowered to attract the attention and money of American investors. But what happens if these long-term projections fail to come true? Who is to blame for long-term projections that are simply unrealistic? A doctrine called the “bespeaks caution” doctrine has emerged in order to govern these inquiries, and holds that these optimistic forward-looking statements are legally immunized provided that …
Predicting A Heart Attack: The Fundamental Opacity Of Extreme Liquidity Risk, William O. Fisher
Predicting A Heart Attack: The Fundamental Opacity Of Extreme Liquidity Risk, William O. Fisher
Law Faculty Publications
After 150 years of business, Lehman Brothers ran out of cash and credit and filed for bankruptcy on September 15, 2008. As a publicly traded company, Lehman had filed all the reports required by U.S. securities law. But the hundreds of pages of words and numbers provided no timely warning of lurking liquidity death. The risks of triparty repurchase financing and the endgame Lehman would have to play if a selfmagnifying credit drain hit were, as it turned out, inherently opaque. Disclosure, the traditional securities law “fix,” was destined to fail in this case, raising the question of whether it …
Rethinking Disclosure In A World Of Risk-Based Pricing
Rethinking Disclosure In A World Of Risk-Based Pricing
Patricia A. McCoy
The residential mortgage market in the United States has changed significantly since the passage of current federal mortgage disclosure laws in the 1960s and 1970s. In this Article, Professor Patricia McCoy advocates for the reform of these traditional disclosure rules. After describing the evolution of the subprime mortgage market and providing a description of current federal disclosure laws, she explores how these new market dynamics cause the traditional disclosure rules to break down in the subprime market. Professor McCoy concludes with proposals to counteract false advertising practices, facilitate "meaningful comparison-shopping, and formulate streamlined disclosures addressing loan applicants' greatest concerns in …