Law Commons^™

Dialectical Regulation, Robert B. Ahdieh

Robert B. Ahdieh

While theories of regulation abound, woefully inadequate attention has been given to growing patterns of "intersystemic" and "dialectical" regulation in the world today. In this rapidly expanding universe of interactions, independent regulatory agencies, born of autonomous jurisdictions, nonetheless face a combination of jurisdictional overlap with, and regulatory dependence on, one another. Here, the cross-jurisdictional interaction of regulators is no longer the voluntary interaction embraced by transnationalists; it is, instead, an unavoidable reality of acknowledgement and engagement, potentially culminating in the integration of discrete sets of regulatory rules into a collective whole.

Such patterns of regulatory engagement are increasingly evident, across …

From Federal Rules To Intersystemic Governance In Securities Regulation, Robert B. Ahdieh

Robert B. Ahdieh

In this brief essay, prepared as part of a symposium on The New Federalism: Plural Governance in a Decentered World, I explore the regulatory dynamics at work: (1) in the operation of Securities Exchange Act Rule 14a-8, (2) in the interventions of then-Attorney General Eliot Spitzer in the national securities markets, and (3) in recent steps by the Securities and Exchange Commission to reconcile U.S. and international accounting standards. In each case, a distinct dynamic of regulatory interaction - what I term intersystemic governance - can be observed. In such cases, overlapping jurisdiction combines with various sources of interdependence to …

Comment On Whistling Loud And Clear: Applying Chevron To Subsection 21f Of Dodd–Frank, Sarah C. Haan

Sarah Haan

No abstract provided.

Is Say On Pay All About Pay? The Impact Of Firm Performance, Jill E. Fisch, Darius Palia, Steven Davidoff Solomon

Steven M. Davidoff Solomon

The Dodd-Frank Act of 2010 mandated a number of regulatory reforms including a requirement that large U.S. public companies provide their shareholders with the opportunity to cast a non-binding vote on executive compensation. The “say on pay” vote was designed to rein in excessive levels of executive compensation and to encourage boards to adopt compensation structures that tie executive pay more closely to performance. Although the literature is mixed, many studies question whether the statute has had the desired effect. Shareholders at most companies overwhelmingly approve the compensation packages, and pay levels continue to be high. Although a lack of …

Confronting The Peppercorn Settlement In Merger Litigation: An Empirical Analysis And A Proposal For Reform, Sean J. Griffith, Steven D. Solomon, Jill E. Fisch

Steven Davidoff Solomon

Shareholder litigation challenging corporate mergers is ubiquitous, with the likelihood of a shareholder suit exceeding 90%. The value of this litigation, however, is questionable. The vast majority of merger cases settle for nothing more than supplemental disclosures in the merger proxy statement. The attorneys that bring these lawsuits are compensated for their efforts with a court-awarded fee. This leads critics to charge that merger litigation benefits only the lawyers who bring the claims, not the shareholders they represent. In response, defenders of merger litigation argue that the lawsuits serve a useful oversight function and that the improved disclosures that result …

Introduction To 'New Governance And The Business Organization', Cristie Ford, Mary Condon

Mary G. Condon

In the fall of 2010, the University of British Columbia Faculty of Law welcomed a group of scholars from around the world to consider the state, and evolution, of responsive regulation, in both theory and practice. The occasion was the presence of Dr. John Braithwaite as UBC Law’s inaugural Fasken Martineau Senior Visiting Scholar. This paper is an introductory essay to the special edition of the UBC Law Review devoted to the workshop’s resulting work products. The volume begins with John Braithwaite’s own reflections on the responsive regulation project. On one level, the set of essays that follows his can …

A New Coalescence In The Housing Finance Reform Debate?, Patricia Mccoy, Susan Wachter

Patricia A. McCoy

This policy brief examines recent proposals for reform of the housing finance system.

Representations And Warranties: Why They Did Not Stop The Crisis, Patricia Mccoy, Susan Wachter

Patricia A. McCoy

During the run-up to the 2008 financial crisis, representations and warranties (contractual statements enforceable through legal action) may have given investors false assurance that mortgage loans were being properly underwritten. This assurance in turn may have contributed to overinvestment in mortgage-backed securities in two ways. First, the assumption that legally enforceable penalties associated with reps and warranties would deter lax underwriting may have led to less monitoring of these contracts than would otherwise have occurred. In turn, the lack of monitoring of actual underwriting practices enabled the spread of lax lending practices. The existence of these reps and warranties and …

Investment Treaties Are About Justice, Frank J. Garcia

Frank J. Garcia

This Perspective argues that investment law is ripe for a paradigm shift away from pure capital protection. Rather, investment law should be recognized as part of a comprehensive global economic governance system for ensuring justice and the rule of law, in this case in the allocation of investment capital.

Integration Of Securities Offerings: Obstacles To Capital Formation Remain For Small Businesses, Perry E. Wallace, Jr.

Perry Wallace

No abstract provided.

Integration Of Securities Offerings: Obstacles To Capital Formation Remain For Small Businesses, Perry E. Wallace, Jr.

Perry Wallace

No abstract provided.

Shareholder Exit Signs On Us And Eu Highways, Raluca Papadima

Raluca Papadima

The Rise Of Risk-Based Regulatory Capital: Liquidity And Solvency Standards For Financial Intermediaries, Jose Gabilondo

José Gabilondo

In a capitalist economy, a private firm seeking finance must negotiate with prospective investors in the open market, which establishes standards about the terms on which debt and equity investment will be forthcoming. In addition to these market-financing standards, the capital structure of some financial firms—particularly broker-dealers, federally insured depository institutions, and insurance companies—must satisfy other requirements imposed by federal or state regulators to promote liquidity and solvency. Regulators take a heightened interest in these firms because they serve a public function in providing credit and other financial services. To grasp what regulatory capital rules try to accomplish, the reader …

Financial Hospitals: Defending The Fed’S Role As A Market Maker Of Last Resort, José Gabilondo

José Gabilondo

During the last financial crisis, what should the Federal Reserve (the Fed) have done when lenders stopped making loans, even to borrowers with sterling credit and strong collateral? Because the central bank is the last resort for funding, the conventional answer had been to lend freely at a penalty rate against good collateral, as Walter Bagehot suggested in 1873 about the Bank of England. Acting thus as a lender of last resort, the central bank will keep solvent banks liquid but let insolvent banks go out of business, as they should. The Fed tried this, but when the conventional wisdom …

The Role Of Corporate Governance In Curbing Foreign Corrupt Business Practices, Poonam Puri, Andrew Nichol

Poonam Puri

The role of corporate and securities laws in addressing foreign corrupt business practices has, to date, received limited consideration. Departing from the substantial literature on the criminal and public law response to international corruption, the authors analyze Canada’s Corruption of Foreign Public Officials Act in comparison with British and American legislation and conclude that the Canadian regime relies too heavily on the use of criminal sanctions and fails to contemplate the role of behaviour modification in its legislative structure. Recognizing that multinational corporations are well placed to identify, expose and prevent corrupt business practices, the authors propose a private law …

Single-Firm Event Studies, Securities Fraud, And Financial Crisis: Problems Of Inference, Andrew Baker

Andrew Baker

Lawsuits brought pursuant to section 10(b) of the Securities and Exchange Actdepend on the reliability of a statistical tool called an event study to adjudicate issues ofreliance, materiality, loss causation, and damages. Although judicial acceptance of theevent study technique is pervasive, there has been little empirical analysis of the ability ofevent studies to produce reliable results when applied to a single company’s security.
Using data from the recent financial crisis, this Note demonstrates that the standardmodelevent study used in most court proceedings can lead to biased inferences sanctionedthrough the Daubert standard of admissibility for expert testimony. In particular, in thepresence …

Keep Securities Reform Moving: Eliminate The Sec's Integration Doctrine, Stuart R. Cohn

Stuart R. Cohn

Small and developing companies raising capital under the federal securities laws often face the considerable barrier imposed by the SEC's integration doctrine. Despite recent reforms in registration exemptions the integration doctrine has remained untouched and continues to be a significant problem for many companies needing multiple infusions of capital. This article examines and recommends that the integration doctrine be eliminated nearly in its entirety.

Like Moths To A Flame - International Securities Litigation After Morrison: Correcting The Supreme Court's Transactional Test, Marco Ventoruzzo

Marco Ventoruzzo

Because of the broad jurisdiction American courts have asserted in cases arising under the Securities Exchange Act of 1934, they have been called a Shangri-la for “foreign-cubed” class actions with little connection to the United States. Over the past forty years, the standards used by American courts to determine their jurisdiction in international securities disputes have evolved, culminating in the U.S. Supreme Court’s Morrison decision of 2010. The new transactional test promulgated in Morrison replaced all of its predecessor tests, from a test measuring whether the conduct in question took place in the United States to a test measuring whether …

Takeover Regulation As A Wolf In Sheep's Clothing: Taking U.K Rules To Continental Europe, Marco Ventoruzzo

Marco Ventoruzzo

Aesop was an optimist. In his cautionary fable that inspired the famous admonition about wolves in sheep's clothing, the predator intentionally dons a sheep's fleece in order to sneak up on a lamb. His disguise, it turns out, is so effective that he ends up being mistaken for the real thing and killed by another wolf. According to Aesop, even the most effective fraud can turn against its perpetrator, and justice be done. The results are not always so salutary with other clandestine predators, including legal rules that appear aimed at protecting vulnerable groups, but instead provide valuable tools to …

Cost-Based And Rules-Based Regulatory Competition: Markets For Corporate Charters In The U.S. And The E.U., Marco Ventoruzzo

Marco Ventoruzzo

Regulatory competition in corporate law is increasing in Europe and, not differently from what happens in the US, a market for corporate charters is developing in Europe. This article examines the differences between the US corporate law market, and the European one - to the extent that one exists. The basic idea is that, in Europe, there is a stronger competition for the (first) incorporation of rather small, closely-held corporations; while in the US a small closely-held corporation usually incorporates locally, where its shareholders and directors are located, and reincorporates - often in Delaware - when it is growing and, …

Do Conservative Justices Favor Wall Street: Ideology And The Supreme Court's Securities Regulation Decisions, Marco Ventoruzzo, Johannes W. Fedderke

Marco Ventoruzzo

The appointment of Supreme Court justices is a politically-charged process and the "ideology" (or "judicial philosophy") of the nominees is perceived as playing a potentially relevant role in their future decision-making. It is fairly easy to intuit that ideology somehow enters the analysis with respect to politically divisive issues such as abortion and procreative rights, sexual conduct, freedom of speech, separation of church and state, gun control, procedural protections for the accused in criminal cases, governmental powers. Many studies have tackled the question of the relevance of the ideology of the justices or appellate judges on these issues, often finding …

The Role Of Comparative Law In Shaping Corporate Statutory Reforms, Marco Ventoruzzo

Marco Ventoruzzo

This Essay discusses how comparative law played and plays a role in the statutory development of corporate laws. The influence of laws of other systems on the development of statutory law is common, explicit, and represents a tradition that accompanied legal reforms since the very beginning of the development of legislation. Focusing on modern corporate law, I argue (but the argument could be extended to many other legal fields) that it is necessary to distinguish two basic ways in which comparative law influences legal reforms in one particular jurisdiction. The first one is through regulatory competition among different systems. In …

Issuing New Shares And Preemptive Rights: A Comparative Analysis, Marco Ventoruzzo

Marco Ventoruzzo

The question of whether the corporate law of Europe and America are converging is still largely unanswered. One fundamental area in which the two systems diverge concerns how they regulate the issuing of new shares, in particular preemptive rights, a problem rarely addressed by comparative corporate law scholars. This essay fills that gap by examining the major comparative differences between the approaches followed on the two sides of the Atlantic, and offers some possible explanations for this divergence.

Experiments In Comparative Corporate Law: The Recent Italian Reform And The Dubious Virtues Of A Market For Rules In The Absence Of Effective Regulatory Competition, Marco Ventoruzzo

Marco Ventoruzzo

The article addresses a sweeping Reform of corporate law which was enacted by the Italian government in 2003 and came into effect on January 1, 2004. The new statutory regulation significantly increases freedom of contract in corporate law, relying on the idea that the development of an efficient market for rules will allow the "natural selection" of the rules that better suit the need of the different stakeholders. Together - and to some extent to compensate for - this greater freedom of contract, new protections for minority shareholders have also been implemented. The reform also imports into the Italian legal …

Cost-Based And Rules-Based Regulatory Competition: Markets For Corporate Charters In The U.S. And The E.U., Marco Ventoruzzo

Marco Ventoruzzo

Regulatory competition in corporate law is increasing in Europe and, not differently from what happens in the US, a market for corporate charters is developing in Europe. This article examines the differences between the US corporate law market, and the European one - to the extent that one exists. The basic idea is that, in Europe, there is a stronger competition for the (first) incorporation of rather small, closely-held corporations; while in the US a small closely-held corporation usually incorporates locally, where its shareholders and directors are located, and reincorporates - often in Delaware - when it is growing and, …

Europe's Thirteenth Directive And U.S. Takeover Regulation: Regulatory Means And Political Economic Ends, Marco Ventoruzzo

Marco Ventoruzzo

Cross-border acquisitions, especially through hostile takeovers, represent one of the most dramatic consequences of the growing integration, both within Europe, and when considering the economic balance of power between the US and the European industries. This Article focuses on the single most important piece of legislation on European takeover law, the Thirteenth Directive of the European Union on Takeover Regulation, which was approved on April, 21 2004 and must be implemented by Member States before the end of 2006. Passage of the Thirteenth Directive is no minor event. Earlier versions were embroiled in arresting political controversies that generated significant Member …

New Kids On The Blockchain: How Bitcoin's Technology Could Reinvent The Stock Market, Larissa Lee

Larissa Lee

Bitcoin is the first and most successful digital currency in the world. It is polarized in the news almost daily, with either glowing reviews of the many benefits of an alternative and international currency, or doomsday predictions of anarchy, deflation, and another tulip bubble.This Article focuses on the truly innovative aspect of Bitcoin—and that which has gone mostly unnoticed since its inception—the technological platform used to transfer Bitcoin from one party to another. This technology is called the Blockchain. The Blockchain eschews a bank or other middleman and allows parties to transfer funds directly to one another, using a peer-to-peer …

Legal Transplantation Or Legal Innovation? Equity-Crowdfunding Regulation In Taiwan After Title Iii Of The U.S. Jobs Act, Chang-Hsien Tsai

Chang-hsien (Robert) TSAI

Securities -- Insiders' Liability Under Section 16(B) Of The Securities Exchange Act For Stock Transfer After Corporate Merger -- Kern County Land Co. V. Occidental Petroleum Corp., John Olson

John Olson

No abstract provided.

Locked In: The Competitive Disadvantage Of Citizen Shareholders, Anne M. Tucker

Anne Tucker

In this Essay, I challenge the conventional corporate law wisdom that unhappy mutual fund investors paying high fees don’t need litigation or regulation to protect their interests because they should simply exit a fund and reinvest elsewhere. The exit solution, advanced by Professors John Morley and Quinn Curtis in Taking Exit Rights Seriously provided an elegantly simply solution to the problem of unhappy indirect investors (e.g., mutual fund investors) given that they are often low-dollar, low-incentive, rationally-apathetic investors facing enormous information asymmetries and collective action problems. According to their view, competition produced by exit, or the threat of exit, is …