Law Commons^™

Reconsidering Disclosure And Liability In The Transatlantic Capital Markets, Mark Brewer, Orla Gough, Neeta Shah

Mark Brewer

In response to the current global financial crisis, governments around the world are introducing some of the most significant changes financial regulation since the Great Depression. However, these efforts fail to fundamentally alter the current overreliance on disclosure and fail to achieve international cooperation in deterring the next financial crisis. The article explores some of the limits of disclosure as a basis for financial regulation and to suggest international regulatory coordination of liability standards to help curtail the risky behavior that often leads to the pattern of boom and bust in the global financial markets. The purpose of this article …

Assessing The Applicability Of The Business Judgment Rule And The “Defensive” Business Judgment Rule In The Chinese Judiciary: A Perspective On Takeover Dispute Adjudication, Xiao-Chuan Charlie Weng

Xiao-chuan Charlie Weng

With the surge of takeovers in China, many issues regarding takeover adjudication and legislation have increasingly received academic attention. The issues of the independence and professionalization of the judiciary and the scarcity of legislation on duty of care are the major predicaments facing corporate China. Massive legislative and judicial reform of takeover adjudication is not viable in the near future. However, U.S. common law standards of review, including the business judgment rule and serial rules against hostile takeover, with diacritical the business judgment rule stamp, may hold potential for reform within the current economic environment. The article investigates the problems …

Disputes Related To Healthcare Across National Boundaries: The Potential For Arbitration, Deth Sao

Deth Sao

Trade in international health services has the potential to play a leading role in the global economy, but its rapid growth is impeded by legal barriers. Advances in technology and cross-border movement of people and health services create legal ambiguities and uncertainties for businesses and consumers involved in transnational medical malpractice disputes. Existing legal protections and remedies afforded by traditional judicial frameworks are unable to resolve the following challenges: (1) assertion of personal jurisdiction; (2) choice of forum and law considerations; (3) appropriate theories of liability for injuries and damages arising from innovations in medical care and delivery of health …

Central Counterparties (Ccp) And The New Transnational Lex Mercatoria, Christian Chamorro-Courtland

Christian Chamorro-Courtland

This article argues that the new transnational lex mercatoria is the main source of law governing the operations of Central Counterparty (CCP) clearing systems. It demonstrates that the new transnational lex mercatoria has been recognized by the courts in various common law jurisdictions as the appropriate source of law governing the operations various other commercial and financial institutions. It is argued that this new legal regime requires official recognition by the courts in order to protect CCP arrangements from burdensome corporate insolvency laws; especially for the protection of non-financial market CCPs, which are currently not protected by special legislation like …

Warranting Data Security, Juliet Moringiello

Juliet M Moringiello

Massive data security breaches have grabbed headlines in the past few years. The data thieves responsible for these breaches have stolen the credit and debit card data of customers of retailers such as TJ Maxx, DSW Shoe Warehouse, BJ’s Wholesale Club, and the Hannaford grocery store chain. A thief in control of this payment card data, which can include debit and credit card numbers, expiration dates, security codes and personal identification numbers, has the ability to open new credit accounts and make charges on existing consumer accounts. These data breaches leave individuals fearful that their personal information will be used …

Why Foreclosure Robo-Signers Should Be Everyone's Concern, Juliet Moringiello

Juliet M Moringiello

No abstract provided.

Errors In Judgment Or How To Get Debts Discharged In Bankruptcy "(Il)Legally" And Other Notice Issues, Pearson Liddell Jr., Gloria J. Liddell

Pearson Liddell Jr.

ABSTRACT ERRORS IN JUDGMENT or HOW TO GET DEBTS DISCHARGED IN BANKRUPTCY (IL)LEGALLY: A MATTER of NOTICE On March 23, 2010, the U.S. Supreme Court decided the case of United Student Aid Funds, Inc. v. Espinosa. By this case a debtor was relieved of an obligation to pay a student loan notwithstanding the fact that the debtor had not followed the prescribed procedure for obtaining a discharge of that debt. The U. S. Bankruptcy Code (“Code”) requires that a debtor initiate an adversary proceeding to determine the dischargeability of such debts based upon a finding of “undue hardship”. This proceeding …

How The Payday Predator Hides Among Us: The Predatory Nature Of The Payday Loan Industry And Its Use Of Consumer Arbitration To Further Discriminatory Lending Practices, Michael A. Satz

Michael A Satz

This Article argues that Payday lending is a predatory lending practice that disproportionately targets minority customers, and that the Payday lending industry utilizes consumer arbitration agreements to further the industry’s discriminatory lending practices. The Article proposes that protections enacted into law to protect military service members from payday lenders should be universally enacted on a national level.

Enforceability Of Covenants Not To Compete In At-Will Employment Relationships In Texas, Eric G. Behrens

Eric G. Behrens

Abstract of: The enforceability of covenants not to

compete in at-will employment relationships in Texas

Although non-compete covenants are restraints against trade, the Legislature provides they are enforceable if they comply with the criteria outlined in the Covenants Not to Compete Act, TEXAS BUSINESS & COMMERCE CODE § 15.50(a), et seq. This article traces how the Texas Supreme Court has interpreted those criteria between 1994 – 2009, the steps for crafting an covenant and the considerations given by courts in determining if it is enforceable, and the trend toward greater enforcement of such covenants.

For roughly twelve years, Light v. …

The Mortgage Market Crisis: A Game Theory Analysis, Raquel Mato

Raquel Mato

The mortgage market experienced a global bubble during the early 2000s. The bubble burst in 2006, creating a global financial crisis with widespread repercussions. In this paper, I will discuss how the mortgage market normally works and what changes occurred leading up to the 2000s that allowed for the rapid expansion of the mortgage market. I will talk about contributing factors such as: deregulation of the market, government encouragement of homeownership, the mortgage backed securities market, existing legislation, and a general lack of responsibility by all parties involved. I will use various aspects of game theory to explain how this …

International Law And Domestic Judicial Procedure: Implementing The Hague Convention On Choice Of Court Agreements In The American Federal System, Carolyn Dubay

Carolyn Dubay

In 2009, the United States became a signatory to the Convention on Choice of Court Agreements (COCCA), drafted under the auspices of the Hague Conference on Private International Law. The stated objective of the Convention was to "promote international trade and investment through enhanced judicial co-operation." Despite these broad goals, COCCA is narrowly drawn to relate only to international commercial disputes subject to a negotiated choice of court agreement. With respect to forum selection clauses in international business-to-business contracts, COCCA creates uniform procedural rules for the enforcement of such clauses in both the courts designated in such clauses (“chosen courts”), …

Do Accounting Rules Matter? The Dangerous Allure Of Mark To Market, Todd Henderson, Richard Epstein

Todd Henderson

This paper examines the relative strength of two imperfect accounting rules: historical cost and mark to market. The manifest inaccuracy of historical cost is well known, and, paradoxically one source of its hidden strength. Because private parties know of its evident weaknesses they look elsewhere for information. In contrast, mark to market for hard-to-value assets has many hidden weaknesses. In this paper we show how it creates asset bubbles and exacerbate their negative collateral consequences once they burst. It does the former by allowing banks to adopt generous valuations in up-markets that increase their lending capacity. It does the latter …

An Ethical Rabbit Hole: Model Rule 4.4, Intentional Interference With Former Employee Non-Disclosure Agreements And The Threat Of Disqualification, Maura I. Strassberg

Maura I Strassberg

ABSTRACT The Model Rule 4.4 prohibition on the use of methods of obtaining evidence that violate the rights of third parties can be read to prohibit the informal questioning of a former employee with a non-disclosure agreement to advance a proposed or pending lawsuit, as this may constitute the tort of intentional interference with contract. The use of non-disclosure agreements is proliferating and, although actual tort liability in this context has hardly ever been litigated, it is easy to strategically use this tort to allege an ethical violation that can be the basis of a disqualification motion. The threat of …

Demand And Supply Forces In The Market For Law Interplaying Through Jurisdictional Competition: Basic Theories And Cases, Chang-Hsien Tsai

Chang-hsien (Robert) TSAI

Inspired by corporate charter competitions in the 19th-century U.S. and contemporary Europe as well as the negative impact of the Sarbanes-Oxley Act of 2002 on the U.S. cross-listing market, this article draws positive lessons from the above stories that demand and supply forces underlying jurisdictional competition constrains regulating jurisdictions from disregarding business demands and from imposing excessive regulation, and that jurisdictional competition brought about by mobility or exit would push for legal flexibility. Through the positive arguments developed in this article, regulatory jurisdictions in East Asia could, to an extent, understand the true costs and benefits of regulation in the …

Was Selden Right? The Expansion Of Closed Seas And Its Consequences, Scott Shackelford

Scott Shackelford

This Article focuses on the relationship between the legal regimes governing offshore resources in the continental shelves and the deep seabed, particularly in reference to the extent to which continental shelf claims are encroaching on the deep seabed. The question of how well these respective legal regimes regulate resource exploitation will also be considered, along with an analysis of the underlying reasons driving change in these governance structures. I argue that the primary issue is one of whether vague rules, particularly UNCLOS Article 76, are working in terms of incentivizing sustainable, peaceful development of offshore resources.

“A Psychological Investigation Of Consumer Vulnerability To Fraud: Legal And Policy Implications”, Debra P. Stark, Jessica M. Choplin

Debra Pogrund Stark

This article focuses on a type of consumer fraud that is particularly problematic because it may not be actionable in some jurisdictions, namely the problem of consumer vulnerability to deception when a consumer notices a problematic term in a contract but is persuaded through deception to proceed with the deal anyhow. Two fraud simulation studies and a follow-up survey demonstrated how this type of fraud operates, found that consumers with certain vulnerability characteristics such as having lower socio-economic status are more susceptible to this type of fraud, and explored some of the psychological reasons why consumers are vulnerable to it …

Is Chapter 15 Universalist Or Territorialist? Empirical Evidence From United States Bankruptcy Court Cases, Jeremy Leong

Jeremy Leong

No abstract provided.

Understanding Exclusion Of The Cisg: A New Paradigm Of Determining Party Intent, William P. Johnson

William P. Johnson

No abstract provided.

The Financial Reform Act: Will It Succeed In Reversing The Causes Of The Subprime Crisis And Prevent Future Crises?, Charles W. Murdock

Charles W. Murdock

Summary: The Financial Reform Act: Will It Succeed in Reversing the Causes of the Subprime Crisis and Prevent Future Crises? By: Professor Charles W. Murdock

The current financial crisis, which could have plunged the world into a financial abyss similar to the Great Depression, is far from resolved. The financial institutions, which this article asserts caused the crisis, have returned to profitability and have paid billions of dollars in bonuses, while ordinary Americans have borne the brunt of the meltdown, with formal unemployment hanging around the 10% mark. This has caused some to comment that profits have been privatized and …

Lessons In Price Stability From The U.S. Real Estate Market Collapse, Andrea J. Boyack

Andrea J Boyack

The U.S. residential housing market collapse illustrates the consequences of ignoring risk while funding mortgage borrowing. Collateral over-valuation was a foundational piece of the crisis. Over the past few decades, secondary markets, securitization, policy and psychology increased the flow of funds into real estate. At the same time, financial market segmentation divorced risk from reward. Increased mortgage capital availability, unmitigated by proper risk allocation, led to real estate price inflation. Social trends and government policies exacerbated both the mortgage capital over-supply and the risk-valuation disconnect.

The Dodd-Frank Act inadequately addresses the underlying asset valuation problem. Federal regulation may support market …

Uncitral, Security Rights And The Globalisation Of The Us Article 9, Gerard Mccormack Professor

Gerard McCormack

Abstract – “UNCITRAL, Security Rights and the globalisation of the US Article 9” UNCITRAL, the United Nations Commission on International Trade Law, has recently produced a Legislative Guide on more particularly on secured transactions, or secured credit law as it is variously called. The Guide follows the broad contours of Article 9 of the United States Uniform Commercial Code though it is not an exact copy. It aims to harmonise and modernise the law of secured credit across the globe. In UNCITRAL’s view, the Legislative Guide will aid the growth of individual businesses and also in general economic prosperity. Harmonisation …

Controlling Creditor Opportunism, Jonathan C. Lipson

Jonathan C. Lipson

This paper addresses problems of creditor opportunism. “Distress investors” such as hedge funds, private equity funds, and investment banks are opportunistic when they use debt to obtain control of a financially troubled firm and extract improper gains at the expense of the firm and its other stakeholders. Examples include the mis-use of private information to short-sell a borrower’s securities and creditor self-dealing.

Creditors can act opportunistically because legal doctrines that historically checked such behavior—e.g., “lender liability”—have not kept pace with fundamental changes in the market for control of distressed firms. The recent Dodd-Frank financial reform is not likely to change …

The Conundrum Of Covered Bonds, Steven L. Schwarcz

Steven L Schwarcz

Covered bonds, which have been part of European finance since the time of Frederick the Great, are now being widely touted as the answer to securitization’s imperfections. There is great confusion, though, about the nature of covered bonds and their relationship to secured bond financing and securitization. This article attempts to demystify covered bonds, examining how they fit within a larger financing framework, analyzing their legal rights and obligations, and comparing their costs and benefits. The benefits of covered bonds are similar to those of securitization; both can access low-cost capital market funding with low risk to their investors, and …

Smoke, Mirrors & Contract Law, Danielle K. Hart

Danielle K Hart

Abstract: Contract law is set up to be transaction enforcing, that is, to be binding. Binding means two different but related things. First, “binding” means that the contract is valid as between the parties (because it satisfies contract law’s formation requirements) and, second, it means that the rights and obligations set forth in that contract will be enforced by the state on behalf of one of the parties over the objection of the other, now resisting party. Modern contract law uses several well-established assumptions about the contracting parties, including the way they behave when contracting, and the roles of the …

Disintermediating Avarice: A Legal Framework For Commercially Sustainable Microfinance, Steven L. Schwarcz

Steven L Schwarcz

Although microfinance has emerged as a key tool to alleviate poverty, the need for microfinance lending vastly exceeds the amount of funds that can be raised from charitable donors. Commercial bank lending is supplementing donor money, but microfinance loans made by banks are expensive and sometimes even exploitive. This article examines how innovative legal structures can enable microfinance loans to be funded directly from lower-cost, and virtually limitless, capital market sources by removing, or “disintermediating,” the need for a bank intermediary. In that context, the article identifies and attempts to resolve the resulting law-and-business issues of first impression and also …

The Financial Reform Act: Will It Succeed In Reversing The Causes Of The Subprime Crisis And Prevent Future Crises?, Charles W. Murdock

Charles W. Murdock

Summary: The Financial Reform Act: Will It Succeed in Reversing the Causes of the Subprime Crisis and Prevent Future Crises? By: Professor Charles W. Murdock

The current financial crisis, which could have plunged the world into a financial abyss similar to the Great Depression, is far from resolved. The financial institutions, which this article asserts caused the crisis, have returned to profitability and have paid billions of dollars in bonuses, while ordinary Americans have borne the brunt of the meltdown, with formal unemployment hanging around the 10% mark. This has caused some to comment that profits have been privatized and …

Take This House And Shove It: The Emotional Drivers Of Strategic Default, Brent T. White

Brent T. White

An increasingly influential view is that strategic defaulters make a rational choice to default because they have substantial negative equity. This article, which is based upon the personal accounts of over 350 individuals, argues that this depiction of strategic defaulters as rational actors is woefully incomplete. Negative equity alone does not drive many strategic defaulters’ decisions to intentionally stop paying their mortgages. Rather, their decisions to default are driven primarily by emotion – typically anxiety and hopelessness about their financial futures and anger at their lenders’ and the government’s unwillingness to help. If the government and the mortgage industry wish …

The Uniform Commercial Code Survey: Introduction, Russell A. Hakes, Stephen L. Sepinuck

Russell A. Hakes

No abstract provided.

Information Defects In The Age Of Information: When More Is Less, Edward C. Combs Jr.

Edward C Combs Jr.

Warning labels from product manufacturers serve both as a shield to the consumer from physical injury and as a safeguard to the manufacturer from civil liability. A question then arises whether these two distinct interests, that of the manufacturer and of the consumer, are equally protected by our current products liability jurisprudence. Another way to approach this question is by asking when is a product deemed “safe”? Is it determined by an assessment of the totality of injuries associated with its use or do we arrive at the premise that a product is “safe” when a court finds no liability …

How The Global Crime Syndicates Fuel Planet Destruction, Global Alliance

Global Alliance

since 1945 more environmental planet destruction has been fuelled and financed with ever more leveraged debt than in the previous 60 million years - it's applied terrorism against the global life support system under the protection racket of a corrupt law profession