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On Leaving Corporate Executives "Naked, Homeless And Without Wheels": Corporate Fraud, Equitable Remedies, And The Debate Over Entity Versus Individual Liability, Donald C. Langevoort

Georgetown Law Faculty Publications and Other Works

There is a lively debate about the relative merits of entity versus individual liability in cases involving securities fraud. After reviewing this debate in the context of both private securities litigation and SEC enforcement, this paper considers whether the legal tools available against individual executives are adequate, and if not, what changes might be made. The main focus is on equitable remedies, especially rescission and restitution, under both state and federal law. As to the former, Vice Chancellor Strine’s opinion in In re Healthsouth offers an interesting template, although there are limits on the usefulness of derivative suits to police …