Law Commons^™

A Comparative Assessment Of Eu, Uk, French, Australian And Japanese Responses To Auditor Independence: The Case Of Non-Audit Tax Services, Richard Thompson Ainsworth

Faculty Scholarship

Auditor independence was a global concern of financial regulators in the 1990's. Some observers saw this in a positive light, a natural development. Adjusting auditor independence rules was a manifestation of global convergence in corporate governance structures. New rules, especially rules leaning toward a harmonized system were welcome.

There was a more sobering view. This view held that global regulators were less concerned with convergence than they were with a sense of impending disaster. Things had gone too far. Significant, maybe even radical change was needed. The independence of corporate auditors had eroded; trust had been fundamentally compromised in the …

The Securities And Exchange Commission Goes Abroad To Regulate Corporate Governance, Roberta S. Karmel

Faculty Scholarship

No abstract provided.

Role Of The Bank For International Settlements In Shaping The World Financial System, The , Carl Felsenfeld, Genci Bilali

Faculty Scholarship

The Bank for International Settlements ("BIS") was set up in Basel, Switzerland in 1923 to handle remaining financial issues from World War II largely having to do with German reparation payments. It was the first of the semi-public international banks. Over the years its functions have changed and, largely since the late 1970's, it has served as the situs for the world's central banks and financial regulators to pool ideas and deal with international financial issues. A group of committees, com- posed largely of representatives of central bankers, now meets at BIS and has been issuing memoranda and drafts of …

The Muddled Duty To Disclose Under Rule 10b-5, Donald C. Langevoort, G. Mitu Gulati

Faculty Scholarship

No abstract provided.

Vultures Or Vanguards: The Role Of Litigation In Sovereign Debt Restructuring Conference On Sovereign Debt Restructuring: The View From The Legal Academy, Jill E. Fisch, Caroline M. Gentile

Faculty Scholarship

The market for sovereign debt differs from the market for corporate debt in several important ways including the risk of opportunistic default by sovereign debtors, the importance of political pressures, and the presence of international development organizations. Moreover, countries are subject to neither liquidation nor standardized processes of debt reorganization. Instead, negotiations between a sovereign debtor and its creditors lead to a voluntary restructuring of the sovereign's debt. One of the greatest difficulties in restructuring claims against sovereign debtors is balancing the interests of the majority of the creditors with those of minority creditors. Holdout creditors serve as a check …

Sovereign Debt Reform And The Best Interest Of Creditors, William W. Bratton, G. Mitu Gulati

Faculty Scholarship

In April 2002 the International Monetary Fund introduced a sovereign bankruptcy proposal only to be rebuffed by the United States Treasury. Where the IMF wanted a mandatory bankruptcy regime, the Treasury wanted to solve distress problems with contractual devices. Sovereign bondholders and sovereign issuers themselves flatly rejected both proposals, even though they were nominally the beneficiaries of both proponents. This Article addresses and explains this bondholder reaction. In so doing, it takes a highly skeptical view of the IMF's proposal even as it shows that the incentive structure surrounding sovereign lending renders untenable the Treasury's contractarian proposal. The Article's analysis …

Speculation On The Future Of The Bank For International Settlements, A , Carl Felsenfeld, Genci Bilali

Faculty Scholarship

Financial crises around the globe place countries at risk. Not only do less developed countries like Mexico and Argentina tremble from the inadequacies of their banking systems, but large and developed economies such as Japan suffer similar apprehension. As a result, national financial authorities find themselves looking for a type of international financial entity that can coordinate the efforts of these authorities in maintaining safety and soundness in their respective financial and banking sectors. This being the case, financial markets need the assistance of an international institution that can regulate national banking systems and, in return, can avoid any future …

Mome In Hindsight, Ronald J. Gilson, Reinier Kraakman

Faculty Scholarship

Two decades ago, the Virginia Law Review published our article “The Mechanisms of Market Efficiency” (MOME), in which we tried to discern the institutional underpinnings of financial market efficiency. We concluded that the level of market efficiency with respect to a particular fact depends on which of several market mechanisms — universally informed trading, professionally informed trading, derivatively informed trading, and uninformed trading (each of which we explain below) — operates to reflect that fact in market price. Which mechanism is operative, in turn, depends on how widely the fact is distributed among traders, which, I turn, depends on the …

Regulating Internet Payment Intermediaries, Ronald J. Mann

Faculty Scholarship

The Internet has produced significant changes in many aspects of commercial interaction. The rise of Internet retailers is one of the most obvious changes, but oddly enough the overwhelming majority of commercial transactions facilitated by the Internet use a conventional payment system. Thus, even in 2002, shoppers made at least eighty percent of Internet purchases with credit cards. To many observers, this figure has come as a surprise. The early days of the Internet heralded a variety of proposals for entirely new payment systems – generically described as electronic money – that would use wholly electronic tokens that consumers could …

What Caused Enron? A Capsule Social And Economic History Of The 1990s, John C. Coffee Jr.

Faculty Scholarship

The sudden explosion of corporate accounting scandals and related financial irregularities that burst over the financial markets between late 2001 and the first half of 2002 – Enron, WorldCom, Tyco, Adelphia and others – raises an obvious question: Why now? What explains the concentration of financial scandals at this moment in time? Much commentary has rounded up the usual suspects and placed the blame on a decline in business morality, an increase in "infectious greed," or other similarly subjective trends that cannot be reliably measured. Although none of these possibilities can be dismissed out of hand, approaches that simply reason …

Gatekeeper Failure And Reform: The Challenge Of Fashioning Relevant Reforms, John C. Coffee Jr.

Faculty Scholarship

Securities markets have long employed "gatekeepers" – independent professionals who pledge their reputational capital – to protect the interests of dispersed investors who cannot easily take collective action. The clearest examples of such reputational intermediaries are auditors and securities analysts, who verify or assess corporate disclosures in order to advise investors in different ways. But during the late 1990s, these protections seemingly failed, and a unique concentration of financial scandals followed, all involving the common denominator .of accounting irregularities. What caused this sudden outburst of scandals, involving an apparent epidemic of accounting and related financial irregularities, that broke over the …

Is Equity Compensation Tax Advantaged?, David I. Walker

Faculty Scholarship

Employees who receive stock options and other forms of equity compensation generally are able to defer paying tax on this compensation for years, sometimes decades. In a rising market this deferral results in a tax benefit at the employee level. This article asks whether the employee-level tax benefit in a rising market results in a global tax advantage for companies that rely heavily on equity compensation and their employees. There are two primary issues. First, on initial inspection one might conclude that the employee-level benefit in a rising market is offset by a disadvantage in a stagnant or declining market. …