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Articles 1 - 4 of 4
Full-Text Articles in Law
Sec Investigations And Securities Class Actions: An Empirical Comparison, Stephen Choi, Adam Pritchard
Sec Investigations And Securities Class Actions: An Empirical Comparison, Stephen Choi, Adam Pritchard
Law & Economics Working Papers
We compare investigations by the SEC with securities fraud class action filings involving public companies. Using actions with both an SEC investigation and a class action as our baseline, we compare SEC-only investigations with class action-only lawsuits. We find evidence that the stock market reacts more negatively to the class actions relative to SEC investigations. We also find that institutional ownership and stock turnover decline more for class actions compared with SEC investigations. Lastly, the incidence and magnitude of settlements, as well as the incidence of top officer resignation, are greater for class actions relative to SEC investigations. This evidence …
Facebook, The Jobs Act, And Abolishing Ipos, Adam C. Pritchard
Facebook, The Jobs Act, And Abolishing Ipos, Adam C. Pritchard
Law & Economics Working Papers
The market for initial public offerings (IPOs) — the first sale of private firms’ stock to the public — is notorious for its swings from peaks to valleys. This paper argues that these swings reflect serious flaws in the IPO scheme, and that U.S. capital markets should move toward a more stable alternative. Specifically, this paper argues for a two-tier market system in which new stock issuers initially participate in a less-regulated private capital market of accredited investors and then, if they choose, they can move to a more regulated, broader public market. Likewise, firms currently participating in the public …
Facebook, The Jobs Act, And Abolishing Ipos, Adam C. Pritchard
Facebook, The Jobs Act, And Abolishing Ipos, Adam C. Pritchard
Articles
Initial public offerings (IPOs)-the first sale of private firms' stock to the public-are a bellwether of investor sentiment. Investors must be bullish if they are putting their money into untested start-ups. IPOs are frequently cited in the business press as a key barometer of the health of financial markets. Politicians, too, see a steady flow of IPOs as an indicator that capital is fueling the entrepreneurial initiative that sustains the growth of new businesses. Growing businesses create jobs, so Republicans and Democrats can find common ground on the importance of promoting IPOs. That bipartisan consensus was on display this spring …
Enforcement Without Foundation? Insider Trading And China's Administrative Law Crisis, Nicholas C. Howson
Enforcement Without Foundation? Insider Trading And China's Administrative Law Crisis, Nicholas C. Howson
Articles
China's securities regulator enforces insider trading prohibitions pursuant to non-legal and non-regulatory internal "guidance." Reported agency decisions indicate that enforcement against insider trading is often possible only pursuant to this guidance, as the behavior identified is far outside of the scope of insider trading liability provided for in statute or regulation. I argue that the agency guidance is itself unlawful and unenforceable, because: (i) the guidance is not the regulatory norm required by the statutory delegation of power; and (ii) the guidance is ultra vires because (a) it addresses something substantively different from what is authorized under the statutory delegation, …