Law Commons^™

The Howey Test: Are Crypto-Assets Investment Contracts?, Justin Henning

University of Miami Business Law Review

With innovation always comes unknowns. Blockchain technology and crypto–assets are no different. Often times, innovators are so worried about getting their product to market or scaling at mass that they overlook the legal ramifications of their innovations. As Mark Zuckerberg infamously said, “move fast and break things.” Facebook was in no way alone in this style of innovation. However, with respect to crypto–assets, the SEC has stepped in and is attempting to prevent the “break things” aspect. One of the major issues relating to crypto–assets is that many people still do not understand what they are, or how the underlying …

Are Passive Index Funds Active Owners? Corporate Governance Consequences Of Passive Investing, Giovanni Strampelli

San Diego Law Review

The exponential rise of mutual funds designed to track stock indices has been one of the drivers behind the re-concentration of ownership of listed companies in the United States. Because of the high concentration of the passive index funds industry, the three leading passive fund managers—BlackRock, Vanguard, and State Street—make up an increasingly important component of the shareholder base of listed companies. In spite of this however, it remains questionable whether they are actually interested in playing an active role in the corporate governance of investee companies. In fact, although passive investors are, by definition, focused on the long term …

The Renewable Power Of The Mine, Nicolas Maennling, Perrine Toledano

Columbia Center on Sustainable Investment Staff Publications

Access to affordable and reliable energy is key for the mining sector and with rising demand for minerals and falling ore grades, energy demand is estimated to increase by 36% by 2035. Today, energy produced and procured by mining companies is mostly fossil fuel based. This will have to change if the sector is to contribute to the decarbonization of the world economy, needed for countries to meet the target adopted at the Paris Agreement of keeping global temperatures from rising more than 1.5-2 degrees Celsius.

At the same time, the costs of solar, wind and battery storage systems have …

“I’Ll Know It When I See It”: Defending The Consumer Financial Protection Bureau’S Approach Of Interpreting The Scope Of Unfair, Deceptive, Or Abusive Acts Or Practices (“Udapp”) Through Enforcement Actions, Stephen J. Canzona

Journal of Legislation

No abstract provided.

A Critical Review Of U.S. Securities Laws And The Status Of Initial Coin Offerings: Potential Solutions For Issuers, Muhammed Kus

Maurer Theses and Dissertations

Securities law in the United States has a unique approach to defining what is a security and what is not a security. It includes broadly defined terminology and describes several investment instruments that may be considered a security. Courts use one of two methods to determine whether an investment contract is a security: the Howey Test and the Risk Capital Test.

Initial Coin Offerings are one of the most recent instruments that courts and other governmental organizations need to examine in order to answer whether they meet the criteria of being a security. Depending on the result, the issuers may …

Class Actions, Statutes Of Limitations And Repose, And Federal Common Law, Stephen B. Burbank, Tobias Barrington Wolff

All Faculty Scholarship

After more than three decades during which it gave the issue scant attention, the Supreme Court has again made the American Pipe doctrine an active part of its docket. American Pipe addresses the tolling of statutes of limitations in federal class action litigation. When plaintiffs file a putative class action in federal court and class certification is denied, absent members of the putative class may wish to pursue their claims in some kind of further proceeding. If the statute of limitations would otherwise have expired while the class certification issue was being resolved, these claimants may need the benefit of …

Updates To The Uncitral Legislative Guide On Privately Financed Infrastructure Projects, Brooke Guven, Motoko Aizawa

Columbia Center on Sustainable Investment Staff Publications

CCSI, jointly with The Observatory for Sustainable Infrastructure, submitted comments to the UNCITRAL Secretariat regarding updates to the UNCITRAL Legislative Guide on Privately Financed Infrastructure Projects. CCSI’s comments focused on the need for an updated guide, which will now refer to Public Private Partnerships, to holistically and systematically incorporate considerations of: (1) sustainable development and the SDGs, (2) rebalancing of the public versus private nature of PPPs, (3) transparency, participation, accountability, and remedy, (4) empirical evidence-based assessments of contexts in which PPPs may be desirable, (5) objectives of investment and PPPs, (6) human rights, (7) labor, (8) climate change, …

Securities Law In The Sixties: The Supreme Court, The Second Circuit, And The Triumph Of Purpose Over Text, A.C. Pritchard, Robert B. Thompson

Notre Dame Law Review

This Article analyzes the Supreme Court’s leading securities cases from 1962 to 1972—SEC v. Capital Gains Research Bureau, Inc.; J.I. Case Co. v. Borak; Mills v. Electric Auto-Lite Co.; Superintendent of Insurance v. Bankers Life & Casualty Co.; and Affiliated Ute of Utah v. United States—relying not just on the published opinions, but also the Justices’ internal letters, memos, and conference notes. The Sixties Court did not simply apply the text as enacted by Congress, but instead invoked the securities laws’ purposes as a guide to interpretation. The Court became a partner of Congress …

Law Library Blog (November 2018): Legal Beagle's Blog Archive, Roger Williams University School Of Law

Law Library Newsletters/Blog

No abstract provided.

Unravelling Civil Conspiracy, Pey Woan Lee

Research Collection Yong Pung How School Of Law

This article seeks to understand civil conspiracy through the lens of its historical rationale. It identifies that purpose to be the protection of public interests as the tort was originally fashioned as an extension of criminal conspiracy to counter serious social ills. For lawful means conspiracy, this rationale is exemplified by the requirement for improper or illegitimate motive whilst “unlawful means” serves the same function in the context of unlawful means conspiracy. Counter-intuitively, understanding the tort in this way provides a means of restricting the tort and reigning in its “revolutionary” tendencies. Recognising the tort’s policy-based foundation would, it is …

Private Ordering In The Old Dominion: A Solution To Frivolous Litigation Or The Elimination Of A Fundamental Shareholder Right?, Rebekah Biggs

University of Richmond Law Review

No abstract provided.

Corporate And Business Law, Christopher L. Mclean

University of Richmond Law Review

The past two years have produced a number of pieces of legislation from the Virginia General Assembly that serve to bring the set of Virginia business entity statutes up to date with its peers around the country. Part I highlights changes to the Virginia Stock Corporation Act (“VSCA”) and the Virginia Nonstock Corporation Act (“VNSCA”). Part II highlights changes to the Virginia Securities Act (“VSA”) and other statutes affecting Virginia business entities. Part III reviews two significant cases that the Supreme Court of Virginia decided over the past two years with respect to Virginia corporate law. Those decisions provided guidance …

Securities Law In The Sixties: The Supreme Court, The Second Circuit, And The Triumph Of Purpose Over Text, Adam C. Pritchard, Robert B. Thompson

Articles

This Article analyzes the Supreme Court’s leading securities cases from 1962 to 1972—SEC v. Capital Gains Research Bureau, Inc.; J.I. Case Co. v. Borak; Mills v. Electric Auto-Lite Co.; Superintendent of Insurance v. Bankers Life & Casualty Co.; and Affiliated Ute of Utah v. United States—relying not just on the published opinions, but also the Justices’ internal letters, memos, and conference notes. The Sixties Court did not simply apply the text as enacted by Congress, but instead invoked the securities laws’ purposes as a guide to interpretation. The Court became a partner of Congress in shaping the securities laws, rather …

Texas Gulf Sulphur And The Genesis Of Corporate Liability Under Rule 10b-5, Adam C. Pritchard, Robert B. Thompson

Articles

This Essay explores the seminal role played by SEC v. Texas Gulf Sulphur Co. in establishing Rule 10b-5’s use to create a remedy against corporations for misstatements made by their officers. The question of the corporation’s liability for private damages loomed large for the Second Circuit judges in Texas Gulf Sulphur, even though that question was not directly at issue in an SEC action for injunctive relief. The judges considered both, construing narrowly “in connection with the purchase or sale of any security,” and the requisite state of mind required for violating Rule 10b-5. We explore the choices of the …

The Elephant In The Room: Helping Delaware Courts Develop Law To End Systemic Short-Term Bias In Corporate Decision-Making, Kenneth Mcneil, Keith Johnson

Michigan Business & Entrepreneurial Law Review

Short-termism in corporate decision-making is as problematic for long-term investors as relying on a three-mile radar on a supertanker. It is totally inadequate for handling the long-term risks and opportunities faced by the modern corporation. Yet recent empirical research shows that up to 85% of the S&P 1500 have no long-term planning. This is costing pension funds and other long-term investors dearly. For instance, the small minority of companies that do long-term planning and risk management had a long-term profitability that was 81% higher than their peers during the 2001–2014 period—with less stock volatility that costs investors dearly as well. …

Agricultural Investments Under International Investment Law, Jesse Coleman, Sarah Brewin, Thierry Berger

Columbia Center on Sustainable Investment Staff Publications

International investment law, based primarily on international investment treaties, plays an important role in the governance of investment in agriculture, forestry, and fishing. The obligations established by these treaties, and enforced by means of investor–state arbitration, can present challenges for policy-makers and others seeking to ensure that investments are sustainable, including by affecting the ways in which the costs and benefits of investments are distributed among different actors.

CCSI partnered with the International Institute for Environment and Development (IIED) and the International Institute for Sustainable Development (IISD) to produce a briefing note on agricultural investments under international investment law. The …

The Market For Corporate Control In The Zone Of Insolvency: Symposium Introduction, Edward J. Janger

Brooklyn Journal of Corporate, Financial & Commercial Law

No abstract provided.

Corporate Distress, Credit Default Swaps, And Defaults: Information And Traditional, Contingent, And Empty Creditors, Henry T. C. Hu

Brooklyn Journal of Corporate, Financial & Commercial Law

Federal securities law seeks to ensure the quality and quantity of information that corporations make publicly available. Informational asymmetries associated with companies in financial distress, but not in bankruptcy, have received little attention. This Article explores some important asymmetries in this context that are curious in their origin, nature, and impact. The asymmetries are especially curious because of the impact of a world with credit default swaps (CDS) and CDS-driven debt “decoupling.” The Article explores two categories of asymmetries. The first relates to information on the company itself. Here, the Article suggests there is fresh evidence for the belief that …

Insider Trading: Are Insolvent Firms Different?, Andrew Verstein

Brooklyn Journal of Corporate, Financial & Commercial Law

Federal law restricts insider trading. Yet these restrictions operate differently on insolvent or bankrupt firms. The law is more constraining in some respects: federal law extensively regulates the trading of residual claims in solvent firms but not insolvent firms. However, the law is more constraining in other respects: insider trading law does little to limit debt-trading at solvent firms, but a bankruptcy enmeshes all creditors in a web of insider trading rules. This Article identifies insolvency’s economic and legal influence on insider trading law and then normatively evaluates this transformation.

Badges Of Opportunism: Principles For Policing Restructuring Support Agreements, Edward J. Janger, Adam J. Levitin

Brooklyn Journal of Corporate, Financial & Commercial Law

Bankruptcy is a market for corporate control. Current bankruptcy practice offers two alternative mechanisms for effectuating changes in control of a firm: (1) a pre-plan all-asset sale under section 363(b) of the Bankruptcy Code; or (2) an asset sale or recapitalization pursuant to a plan of reorganization under section 1129 of the Code. Pre-plan sales under section 363(b) are fast, but lack the procedural protections associated with a restructuring or sale pursuant to a plan. Plan confirmation can be costly and uncertain, however. Restructuring support agreements (“RSAs”)—contractual agreements to support a future restructuring that has certain agreed-upon characteristics—appear to offer …

Backstop, Not Bailout: The Case For Preserving The Orderly Liquidation Authority Under Dodd-Frank, Mark R. Maciuch

Brooklyn Journal of Corporate, Financial & Commercial Law

The Trump Administration and Republicans have initiated efforts to repeal certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), one of which is the Orderly Liquidation Authority (OLA) under Title II of Dodd-Frank. Critics of the OLA argue that it enables, rather than prevents, future bailouts funded by taxpayers. These critics are concerned with the Federal Deposit Insurance Corporation’s (FDIC) discretion to decide when and how to resolve distressed financial firms, as well as the FDIC’s access to large amounts of funds from the U.S. Department of the Treasury to carry out these functions. Proponents of …

A New Market-Based Approach To Securities Law, Kevin S. Haeberle

Faculty Publications

Modern securities regulation has three main areas, each of which is plagued by a core problem. Mandatory disclosure law leaves society with suboptimal disclosure, as the government calls for too little of some information (for example, management analysis of company prospects) and too much of other information (for example, data about trivial executive perks). Securities fraud law (specifically, its central fraud-on-the-market theory of reliance) yields damages at odds with any reasonable theory of compensation and deterrence. And insider trading law fails to achieve its ends because incentives to police illegal trading and tipping by executives are currently weak.

In this …

The Securities Law Implications Of Financial Illiteracy, Lisa Fairfax

All Faculty Scholarship

Every financial literacy study conducted over the last few decades concurs: Americans, including American investors, are financially illiterate. This Article argues that America’s financial illiteracy poses a significant, widespread, and long-term challenge for our federal securities regime because that regime is premised almost entirely on disclosure as the best form of investor protection and, by extension, on investors’ ability to understand disclosure. By advancing a typology of investors and their disclosure needs, this Article further argues that we may have significantly underestimated the extent of the financial illiteracy problem based on at least two flawed assumptions. First, we have presumed …

Accusers As Adjudicators In Agency Enforcement Proceedings, Andrew N. Vollmer

University of Michigan Journal of Law Reform

Largely because of the Supreme Court’s 1975 decision in Withrow v. Larkin, the accepted view for decades has been that a federal administrative agency does not violate the Due Process Clause by combining the functions of investigating, charging, and then resolving allegations that a person violated the law. Many federal agencies have this structure, such as the Securities and Exchange Commission (SEC) and the Federal Trade Commission.

In 2016, the Supreme Court decided Williams v. Pennsylvania, a judicial disqualification case that, without addressing administrative agencies, nonetheless raises a substantial question about one aspect of the combination of functions at agencies. …

The Meaning Of Capital In The Twenty-First Century, Edward J. Mccaffery

Edward J McCaffery

America is on a path towards a level of both wealth and income inequality unparalleled in recorded history. Thomas Piketty’s Capital in the Twenty-First Century summarizes and conveys the work of Piketty and many co-authors, over many decades, looking at the structure of income and wealth inequality across many nations and centuries. This review essay builds on Piketty’s ambitions as well as his data, in order to put forth a better solution: one that accepts and even embraces the facts of unequal ownership of capital, but changes the social meaning of those facts to avoid the social harms that follow …

Taxing Wealth Seriously, Edward J. Mccaffery

Edward J McCaffery

The social and political problems of wealth inequality in America are severe and getting worse. A surprise is that the U.S. tax system, as is, is a significant cause of these problems, not a cure for them. The tax-law doctrines that allow those who already have financial wealth to live, luxuriously and tax-free, or to pass on their wealth tax-free to heirs, are simple. The applicable legal doctrines have been in place for nearly a century under the income tax, the primary social tool for addressing matters of economic inequality. The analytic pathways to reform are easy to see once …

Sec Disgorgement Actions: Equitable Remedy Or Penalty?, Armando Lopez

Journal of the National Association of Administrative Law Judiciary

No abstract provided.

Sg’S Brief In Lucia Could Portend The End Of The Alj Program As We Have Known It, Jeffrey S. Lubbers

Journal of the National Association of Administrative Law Judiciary

No abstract provided.

Lucia Et Al. V. Securities And Exchange Commission: Opinion Of The Court, Elena Kagan

Journal of the National Association of Administrative Law Judiciary

No abstract provided.

Lucia Et Al. V. Securities And Exchange Commission: Brief Amicus Curiae Of Administrative Law Scholars In Support Of Neither Party, Richard J. Pierce Jr.

Journal of the National Association of Administrative Law Judiciary

No abstract provided.