Law Commons^™

How Algorithmic Trading Undermines Efficiency In Capital Markets, Yesha Yadav

Vanderbilt Law Review

This Article argues that the rise of algorithmic trading undermines efficient capital allocation in securities markets. It is a bedrock assumption in theory that securities prices reveal how effectively public companies utilize capital. This conventional wisdom rests on the straightforward premise that prices reflect available information about a security and that investors look to prices to decide where to invest and whether their capital is being productively used. Unsurprisingly, regulation relies pervasively on prices as a proxy for the allocative efficiency of investor capital. Algorithmic trading weakens the ability of prices to function as a window into allocative efficiency.

This …

Empowering Shareholders, Or Overburdening Companies? Analyzing The Potential Use Of Instant Runoff Voting In Corporate Elections, G. Scott Edwards

Vanderbilt Law Review

Although hotly debated today, one of the prevailing theories in the mind of the public as to why the shareholders of a corporation possess the right to vote in corporate elections is the fact that shareholders "own" the corporation. Even though one academic has written that this theory is the "worst" argument for shareholder primacy, the notion that shareholders should vote in corporations because the corporation "belongs" to them is strongly entrenched in the minds of the general public; in fact, this theory of shareholder primacy often creeps into judicial opinions, showing that even judges are influenced by the theory. …

Human Equity? Regulating The New Income Share Agreements, Shu-Yi Oei, Diane Ring

Vanderbilt Law Review

A controversial new financing phenomenon has recently emerged. New "income share agreements" ("ISAs") enable an individual to raise funds by pledging a percentage of her future earnings to investors for a certain number of years. These contracts, which have been offered by entities such as Fantex, Upstart, Pave, and Lumni, raise important questions for the legal system: Are they a form of modern-day indentured servitude or an innovative breakthrough in human financing? How should they be treated under the law? This Article comprehensively addresses the public policy and legal issues raised by ISAs and articulates an analytical approach to evaluating …