Law Commons^™

Constructing The Yellow Brick Road: Preventing Discrimination In Financial Services Against The Lgbtq+ Community, Cyrus Mostaghim

Michigan Business & Entrepreneurial Law Review

The Lesbian, Gay, Bisexual, Transgender, Queer, and Questioning (“LGBTQ+”) community lacks explicit statutory protections from discrimination in financial services. After the Supreme Court held in Bostock that employment discrimination based on sexual orientation or gender identity was illegal, the Consumer Financial Protection Bureau (CFPB) issued an informal interpretive rule for the Equal Credit Opportunity Act (ECOA) and Regulation B that made discrimination in the access to credit based on sexual orientation or gender identity illegal.

However, this article argues that an informal interpretive rule is easily rescinded and does not provide sufficient protection. Thus, alternative action is needed to create …

Considering Sanctions Compliance In Light Of Ucc 4a, Michael Zytnick, Alaina Gimbert

Michigan Business & Entrepreneurial Law Review

As part of a bank’s financial crime compliance program, it is increasingly common to screen and halt the processing of a payment order for compliance investigation where reference is made to a potential, but unconfirmed, target of United States economic sanctions. This essay discusses challenges under Article 4A of the Uniform Commercial Code concerning the timing of such an investigation and the creation of potential liability where a bank wrongly accepts by execution a previously halted payment order received from a sender following five funds transfer business days after the relevant execution date or payment date of that order. In …

Libor Phaseout: Litigation Is Coming, John Michael Neubert

Michigan Business & Entrepreneurial Law Review

This paper will explore the different steps market participants should take to make sure they are prepared when LIBOR is phased out in December 2021. Part I will focus on the actions market participants should do before going into negotiations that can increase their potential to reach a consensual agreement. Part II will explore what financial firms should be prepared for during the negotiation process and what claims may arise when no agreement is reached. The decision for how to handle any LIBOR-linked financial instrument in their portfolio should be left to the discretion of market participants themselves. This paper …

Front Matter, Michigan Business & Entrepreneurial Law Review

Michigan Business & Entrepreneurial Law Review

Front matter for Volume 9, Issue 2 of the Michigan Business & Entrepreneurial Law Review.

Gatekeeping The Gatekeepers: The Need For A Licensing Requirement For Crowdfunding Portals In The Wake Of The Dreamfunded Decision, Nick Worden

Michigan Business & Entrepreneurial Law Review

Most people are familiar with crowdfunding sites such as Kickstarter and GoFundMe—sites that allow users to part with their money in exchange for products or donate their capital to organizations they believe in. However, these sites have one trait in common: they do not offer contributors equity or a promise for future profits. For a long time, selling equity meant complying with the costly requirements of federal securities laws, which was cost-prohibitive for many small businesses; it was illegal for businesses to offer equity over a site in the way businesses on Kickstarter offered products. The Jumpstart Our Business Startups …

The Siren Song Of Litigation Funding, J.B. Heaton

Michigan Business & Entrepreneurial Law Review

For an investor, litigation funding is too tempting to resist. Litigation funding promises that most elusive of investment returns: those uncorrelated with an investor’s other investment returns. Litigation funding also invests in a world that seems fraught with possible pricing inefficiencies. It seems plausible—even likely—that a team of smart lawyer-underwriters can identify high-value litigation investments to generate superior returns for litigation funding investors. But more than a decade of experience suggests the promise of litigation funding is a siren song. The promise draws investors into the water, but the payoffs may be meager and rare. While litigation funding has always …

Assessing The Evolution Of Cryptocurrency: Demand Factors, Latent Value, And Regulatory Developments, Ryan Clements

Michigan Business & Entrepreneurial Law Review

The purpose of this Comment is to analyze the roots of this fervor— including that which drove Bitcoin’s initial demand surge—and investigate whether cryptocurrency can survive a market bubble that experienced a significant correction in 2018.

Front Matter, Michigan Business & Entrepreneurial Law Review

Michigan Business & Entrepreneurial Law Review

Front matter for Volume 8, Issue 1 of the Michigan Business & Entrepreneurial Law Review.

Integrating Micro And Macro Policy Levers In Response To Financial Crises, Daniel A. Crane, Markus Kitzmuller, Graciela Miralles

Michigan Business & Entrepreneurial Law Review

The 2008–09 Global Financial Crisis originated from a poor incentive structure in the asset market derived from subprime mortgages. The ultimate bursting and unwinding of an asset bubble (here highly overvalued real estate prices woven into a complex multilayer network of securitization, so called collateralized debt obligations or CDOs) put enormous stress on the financial system, spreading through the global network economy and ultimately resulting in the worst economic crisis since the Great Depression. Economists today agree that the severe economic fallout can be largely attributed to the poor systemic performance of international financial markets. Global macroeconomic imbalances, as well …

The Rise-And-Fall Of Leading International Financial Centers: Factors And Application, Adam Church

Michigan Business & Entrepreneurial Law Review

This Note will look at the role of four broad factors that correspond with the rise-and-fall cycles among leading international financial centers. The four factors are: trust in a financial center’s abilities; the central banking and monetary policy systems of the center’s home nation; the home nation’s landscape of financial policy and regulation; and the overall stability of the financial center itself. First, this Note will undertake a broad historical survey of the shifts in prominence from Amsterdam to London, from London to New York, and from New York back to London to define the scope of these factors through …

Shock Therapy, Social Engineering, And Financial Discipline: What Does An Increasingly Financialized World Mean For Democratic Participation?, Layan Charara

Michigan Business & Entrepreneurial Law Review

Over the last several decades, the Bretton Woods Institutions have come to be drivers of policy in the realms of economic liberalization and development, exceeding their original mandates of fostering monetary cooperation and facilitating post-war reconstruction. The structural adjustment programs of the World Bank and the International Monetary Fund have engendered mixed results–delivering some countries from financial crises, while inciting riots and compounding state failure in others. Such varied experiences suggest there is some disconnect between the conditions to lending promulgated by these institutions and the realities on the ground. This Note will trace the evolution of high conditionality lending …

Evaluating Financial Integration And Cooperation In The Asean, Brendan Harvey

Michigan Business & Entrepreneurial Law Review

Financial integration is less pronounced in the ASEAN than other mea-sures of economic integration. This is particularly apparent when com-pared against other regions that have undergone similar integrative efforts, such as the European Union. Cross-border trade flows, foreign-direct in-vestment, and investment in capital goods outstrip other investment flows. Regional institutional and legal structures governing these investment flows, while limited, present marked achievements towards creating an ASEAN financial community. The gap persists despite suggestions that the Asian Financial Crisis and the Global Financial Crisis (or the North Atlan-tic Financial Crisis from the Asian and Stiglitz perspective) would acceler-ate financial regionalism as …

Front Matter

Michigan Business & Entrepreneurial Law Review

No abstract provided.

Finance And Growth: The Legal And Regulatory Implications Of The Role Of The Public Equity Market In The United States, Ezra Wasserman Mitchell

Michigan Business & Entrepreneurial Law Review

The important study of the relationship between finance and economic growth has exploded over the past two decades. One of the most significant open questions is the role of the public equity market in stimulating growth and the channels it follows if it does. This paper examines that question from an economic, legal, and historical perspective, especially with regard to its regulatory and corporate governance implications. The US market is my focus.

In contrast to most studies, I follow both economic history and the actual flow of funds in addition to empirics and theory to conclude that the public equity …

Bitcoin's Growing Pains: Intermediation And The Need For An Effective Loss Allocation Mechanism, Andrew Kang

Michigan Business & Entrepreneurial Law Review

This paper examines a phenomenon largely overlooked in existing literature: as Bitcoin matures into a mainstream consumer payments system with the rise of intermediation and hosted wallet services, it is slowly transforming from a purely decentralized peer-to-peer currency into something that (ironically) more closely resembles the bank-intermediated payment systems of the past. This paper explains how this transformation creates complicated issues of loss allocation not anticipated by Bitcoin’s founder. Further, it argues for the need of an effective legal mechanism to efficiently and fairly allocate losses between intermediaries and users. The first section of this paper will explain how Bitcoin …

Audience Participation: Crowdfunding Large Scale Theatrical Productions Through Regulation A+, Christopher Johnson

Michigan Business & Entrepreneurial Law Review

Theatrical financing has been conducted in much the same way for the better part of a century. This method, however, has consistently provided only the shows with access to the deepest of pockets a path to Broadway. The advent of Internet-based crowdfunding provides producers access to a potential source of capital that was previously unavailable. Prior to the promulgation of the SEC regulations regarding Title IV of the JOBS Act, this capital could only be accessed through donation or reward based financing campaigns, but with the introduction of Regulation A+, there is finally a practical method for the widespread solicitation …

Basel Iii And The Future Of Project Finance Funding, Tianze Ma

Michigan Business & Entrepreneurial Law Review

This paper seeks to analyze the new requirements in the Basel III banking regulatory framework and explore their impact on commercial banks’ project finance portfolio. The paper begins with a general introduction of the Basel Accords, followed by an analysis of the changes in the Basel III requirements and their potential impact on project finance, in particular the effects of the liquidity coverage ratio (LCR) and the net stable funding ratio (NSFR). The paper ends with a discussion of alternative sources of project finance funding that emerged as a result of the new regulatory regime.

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Michigan Business & Entrepreneurial Law Review

No abstract provided.

Front Matter

Michigan Business & Entrepreneurial Law Review

No abstract provided.

The Systematic Risk Of Private Funds After The Dodd-Frank Act, Wulf A. Kaal

Michigan Business & Entrepreneurial Law Review

The Financial Stability Oversight Council (FSOC) was created under the Dodd-Frank Act with the primary mandate of guarding against systemic risk and correcting perceived regulatory weaknesses that may have contributed to the financial crisis of 2008-2009. The Securities and Exchange Commission (SEC) collects data pertaining to private fund advisers in order to facilitate FSOC’s assessment of non-bank financial institutions’ potential systemic risks. Evidence that the SEC’s data collection encounters accuracy and consistency problems might hamper FSOC’s ability to evaluate the systemic risk of private fund advisers. The author shows that while the SEC’s data plays a crucial role in all …

Private Equity Investments In Microfinance In India, Hugh Manahan

Michigan Business & Entrepreneurial Law Review

A trail connects a skyscraper in Manhattan’s Financial District to a tiny food stand in a village in the southeast Indian state of Tamil Nadu. Initially wild and overgrown, the trail now resembles a well-developed road, cleared and shaped. The trail does not connect customers to call centers or raw materials to laborers; the path connects lenders seeking abnormal returns on their investments to borrowers living in poverty. This is the path of private equity investments in microfinance. Microfinance is a powerful financial innovation that has changed personal finance in many parts of the world. While microfinance began as non-profit …

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Michigan Business & Entrepreneurial Law Review

No abstract provided.

Trust And Control: The Value Effect Of Venture Capital Term Sheet Provisions As Risk Allocation Tools, Jason M. Gordon, David Orozco

Michigan Business & Entrepreneurial Law Review

The parties to a venture funding agreement are in a state of coopetition. The parties account for perceived risk in the entrepreneur-investor relationship through varying levels of control demanded from and trust afforded to the other party. The level of risk perceived by each party may differ along individual aspects of the prospective equity deal. The provisions of the term sheet delineate the subjective risk perceptions of each party to the transaction by allocating control or trusting a party with decision-making rights. When negotiating term sheet provisions, a party should seek to understand and recognize the risk perceived by the …

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Michigan Business & Entrepreneurial Law Review

No abstract provided.

The Risk Of Money Laundering Through Crowdfunding: A Funding Portal's Guide To Compliance And Crime Fighting, Zachary Robock

Michigan Business & Entrepreneurial Law Review

With the recent passage of the Jumpstart Our Business Startups Act (“JOBS Act”) and proposed regulations, equity crowdfunding is poised to play an important role in fundraising for many types of emerging growth companies. A fundamental purpose of crowdfunding is to reduce economic barriers to capital markets for emerging growth companies, in part by relaxing rigorous information disclosure requirements currently mandated by the Securities and Exchange Commission (“SEC”). Relaxed regulation should help reduce the cost of fundraising, but it will also present certain risks. Investor fraud is a common concern, which is addressed at length in the JOBS Act and …

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Michigan Business & Entrepreneurial Law Review

No abstract provided.

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Michigan Business & Entrepreneurial Law Review

No abstract provided.

Front Matter

Michigan Business & Entrepreneurial Law Review

No abstract provided.

Front Matter

Michigan Business & Entrepreneurial Law Review

No abstract provided.

Regulation Of Private Equity In Brazil: Policy Questions Presented And Critique, Shannon Guy

Michigan Business & Entrepreneurial Law Review

In this note, I explore some of the policy questions affecting Brazil’s private equity industry that the country must tackle. In Part II, Section A, I begin by asking the threshold question of whether the Brazilian government should play an active role in encouraging the growth of the private equity industry. I resolve that Brazil should play an active role in encouraging the industry’s growth to encourage several possible benefits to the real economy. Private equity may benefit the economy by providing job growth and job preservation, improved access to credit for firms that would not otherwise have funds, and …