Law Commons^™

Crowdfunding Signals, Darian M. Ibrahim

Popular Media

No abstract provided.

Distributive Justice And Donative Intent, Alexander Boni-Saenz

All Faculty Scholarship

The inheritance system is beset by formalism. Probate courts reject wills on technicalities and refuse to correct obvious drafting mistakes by testators. These doctrines lead to donative errors, or outcomes that are not in line with the decedent’s donative intent. While scholars and reformers have critiqued the intent-defeating effects of formalism in the past, none have examined the resulting distribution of donative errors and connected it to broader social and economic inequalities. Drawing on egalitarian theories of distributive justice, this Article develops a novel critique of formalism in the inheritance law context. The central normative claim is that formalistic wills …

The First Real-Time Blockchain Vat - Gcc Solves Mtic Fraud, Richard Thompson Ainsworth, Musaad Alwohaibi

Faculty Scholarship

Following years of study the Gulf Cooperation Council (GCC) appears ready to adopt the recommendations of the International Monetary Fund (IMF) and put in place a tax system that will stabilize revenue. A value added tax (VAT) and corporate income tax (CIT) are considered. A VAT Framework Agreement, that functions like the VAT Directive in the EU, has been agreed.

Although new, the GCC VAT is very worthy of attention. From a tax policy perspective, it is making notable improvements to EU VAT design. The GCC VAT is (potentially) the world’s first real-time, blockchain-secured, multi-jurisdictional VAT. This is a remarkable …

Crowdfunding Without The Crowd, Darian M. Ibrahim

Faculty Publications

The final crowdfunding rules took three years for the Securites and Exchange Commission to pass, but crowdfunding—the offering of securities over the Internet—is now a reality. But now that crowdfunding is legal, will it be successful? Will crowdfunding be a regular means by which new companies raise money, or will it be relegated to a wasteland of the worst startups and foolish investors? This Article argues that crowdfunding has a greater chance of success if regulators abandon the idea that the practice does (and should) employ “crowd-based wisdom.” Instead, I argue that crowdfunding needs intermediation by experts that mirrors the …

Compensation For Expropriations In A World Of Investment Treaties: Beyond The Lawful/Unlawful Distinction, Steven Ratner

Law & Economics Working Papers

When a state expropriates a foreign investment in violation of a bilateral or other treaty on investment protection and a foreign investor sues, where should a tribunal look for the standard of compensation -- to the amount specified in the treaty, to an external standard for violations of internationally law generally, or elsewhere? Investor-state tribunals have offered wildly different answers to this question, trapped in a paradigm set by the Permanent Court of International Justice ninety years ago that distinguishes between so-called lawful and unlawful expropriations. This article evaluates and criticizes the caselaw of tribunals and proposes a new framework …

The Impact Of Recent Sec Financial Reporting Probes On Shareholder Wealth: Companies, Competitors, And Consequences, Stephen Warde

Honors Projects in Finance

During an undergraduate college career, an accounting major devotes a great part of his or her time to learning how publicly traded businesses prepare financial statements in compliance with Generally Accepted Accounting Principles (GAAP) and federal securities laws. These accounting principles, standards, and procedures are ultimately enforced by the U.S. Securities and Exchange Commission (SEC) to protect investors, uphold fair markets, and promote public trust in the capital market system. To fulfill its mission, the SEC Division of Enforcement conducts investigations into possible violations of the federal securities laws and administers enforcement actions. Naturally, SEC investigations and the anticipation of …

Who Bleeds When The Wolves Bite? A Flesh-And-Blood Perspective On Hedge Fund Activism And Our Strange Corporate Governance System, Leo E. Strine Jr.

All Faculty Scholarship

This paper examines the effects of hedge fund activism and so-called wolf pack activity on the ordinary human beings—the human investors—who fund our capital markets but who, as indirect of owners of corporate equity, have only limited direct power to ensure that the capital they contribute is deployed to serve their welfare and in turn the broader social good.

Most human investors in fact depend much more on their labor than on their equity for their wealth and therefore care deeply about whether our corporate governance system creates incentives for corporations to create and sustain jobs for them. And because …

The Path Of The Blockchain Lexicon (And The Law), Angela Walch

Faculty Articles

The terminology around blockchain technology is notoriously confusing, with disputes over whether a blockchain is the same as a distributed ledger or whether an appcoin is the same as a protocol token. In this article, I examine the difficulties the rapidly shifting, contested vocabulary poses for regulators seeking to understand, govern, and potentially use blockchain technology, and I offer suggestions for how to fight through the haze of unclear language.

I provide examples of the fluctuating, contested language in the blockchain technology space and describe the forces at play in shaping the language. I then lay out the problems the …

Payroll Tax & The Blockchain, Richard Thompson Ainsworth, Ville Viitasaari

Faculty Scholarship

Bitcoin is an application that runs on blockchain technology. Blockchain is a foundational technology that is bringing in the second era of the Internet – the era where value can be transferred, rather than just information.

Blockchain is developing along a four-stage path similar to that which TCP/IP took. Both are foundational technologies. TCP/IP brought the Internet, and eventually brought significant (transformational) technological changes in business like Amazon.com and Skype. These are changes that could not have been forecast at the beginning of the Internet age.

Blockchain is an immutable distributed ledger. It replaces the inefficient use of multiple centralized …

Cinderella Sovereignty, Anna Gelpern

Georgetown Law Faculty Publications and Other Works

Joseph Blocher and Mitu Gulati propose an insightful and thought-provoking critique of the barriers to secession under public international law. The critique an important contribution in its own right. I wish it had not been eclipsed by the authors’ clever and provocative fix: turning sovereignty into a tradable commodity. I suspect that this fix would bring about more suffering than the status quo for two reasons. First, a market for sovereign control is unlikely to be a market in any meaningful sense. Therefore, trading sovereignty would not discipline oppressors. Second, should something like a real market materialize, it could diminish …

Book Review - How The Other Half Banks: Exclusion, Exploitation And The Threat To Democracy, By Mehrsa Baradaran (Cambridge, Massachusetts, Harvard University Press, 2015), 336 Pp., $29.95, Stephanie Ben-Ishai

Articles & Book Chapters

In her bold and timely new book, Professor Baradaran brings an American perspective, supported by detailed empirical data and historical analysis, to bear on how to solve the problem of financial exclusion. She begins by situating her analysis in the context of the important relationship between banks and governments. A social contract has existed between banks and government since the earliest days of the Republic. The government supports banks through trust-inducing insurance, bailouts, liquidity protection, and a framework that allows for the allocation of credit to the entire economy. Banks support government by operating the central machinery of the economy …

Blockchain, Bitcoin, And Vat In The Gcc: The Missing Trader Example, Richard Thompson Ainsworth, Musaad Alwohaibi

Faculty Scholarship

Blockchain is coming to tax administration and will cause fundamental change. This article considers the potential for blockchain technology as it applies to the introduction of a value added tax in the Gulf Cooperation Council.

Blockchain technology disrupts centralized ledgers. Blockchain improves efficiency, security and transparency. Perhaps no centralized ledger system presents more challenges than that of the modern tax administration. The central data storage system of a modern tax authority contains all return, payment, and audit activity for all taxpayers arranged tax-by-tax for three years or longer periods of time.

It is likely that blockchain will come first to …

Reshaping Third-Party Funding, Victoria Sahani

Faculty Scholarship

Third-party funding is a controversial business arrangement whereby an outside entity—called a third-party funder—finances the legal representation of a party involved in litigation or arbitration or finances a law firm’s portfolio of cases in return for a profit. Attorney ethics regulations and other laws permit nonlawyers to become partial owners of law firms in the District of Columbia, England and Wales, Scotland, Australia, two provinces in Canada, Germany, the Netherlands, New Zealand, and other jurisdictions around the world. Recently, a U.S.-based third-party funder that is publicly traded in England started its own law firm in England. In addition, some U.S. …

Irs's Cp-2000 E-Mail Scams - Never In Dubai - Common In Canada & The Uk, Richard Thompson Ainsworth

Faculty Scholarship

On September 22, 2016 the Internal Revenue Service (IRS) and its Security Summit partners issued an alert to taxpayers and tax professionals to be on guard against fake e-mails purporting to contain a tax bill related to the Affordable Care Act. Surprisingly, this e-mail scam works. It really should not.

Modern technology is facilitating many contemporary tax scams. In recent years the US has seen false (refund) return scams, phone scammers impersonation IRS agents, and now e-mail scams with fraudulent CP-2000 notices attached to a demand for payment. The same phone and e-mail frauds have appeared in both Canada and …

Financing The Benefit Corporation, Steven A. Dean, Dana Brakman Reiser

Faculty Scholarship

No abstract provided.

The Other Securities Regulator: A Case Study In Regulatory Damage, Anita Krug

All Faculty Scholarship

Although the Securities and Exchange Commission is the primary securities regulator in the United States, the Department of Labor also engages in “securities regulation.” It does so by virtue of its authority to administer the Employee Retirement Income Security Act (ERISA), the statute that governs the investment of retirement assets. In 2016, the DOL used its securities regulatory authority to adopt a rule that, for the first time, designates securities brokers who provide investment advice to retirement investors as fiduciaries subject to ERISA’s stringent transaction prohibitions. The new rule’s objective is salutary, to be sure. However, this Article shows that, …

Using A Shield As A Sword: Are International Organizations Abusing Their Immunity?, Daniel D. Bradlow

Articles in Law Reviews & Other Academic Journals

The starting point for this paper is that IOs are as subjects of international law. Since IOs do not control territory or a population and so always operate within the jurisdiction of one of their member states, they are vulnerable to interference by their member states. In order to mitigate this risk, IOs have been granted qualified immunity, usually referred to as functional immunity, from the jurisdiction of their member states. For most of the twentieth century, this grant of functional immunity made sense for two reasons.

First, the founding states envisaged that IOs would have limited capacity to act …

Bank Governance And Systemic Stability: The "Golden Share" Approach, Saule T. Omarova

Cornell Law Faculty Publications

The global financial crisis of 2008-2009 has sharply reframed the debate on the role of bank corporate governance as a mechanism of systemic crisis prevention. Among other things, it revealed how often the incentives of bank managers and shareholders to maximize short-term private gains are perfectly aligned as a matter of internal governance, but work directly against the broader public interest in preserving long-term financial stability. This Article accepts the existence of that built-in potential conflict as the critical starting point for answering the central question of post-crisis bank governance: How do we ensure that the board of directors of …

2015-2016 Summary Of Legislation, Assembly Committee On Banking And Finance

California Agencies

No abstract provided.

Expanding The Base: A Case For Increased Interprofessional Collaboration In Public Health Law And Policy, Heather A. Walter-Mccable, Marea K. Kinney, Stephanie Q. Quiring, Doug Jerolimov

Law Faculty Research Publications

No abstract provided.

A Private Ordering Defense Of A Company's Right To Use Dual Class Share Structures In Ipos, Bernard S. Sharfman

Faculty Scholarship

No abstract provided.

Leidos And The Roberts Court's Improvident Securities Law Docket, Matthew C. Turk, Karen E. Woody

Scholarly Articles

For its October 2017 term, the U.S. Supreme Court took up a noteworthy securities law case, Leidos, Inc. v. Indiana Public Retirement System. The legal question presented in Leidos was whether a failure to comply with a regulation issued by the Securities and Exchange Commission (SEC), Item 303 of Regulation S-K (Item 303), can be grounds for a securities fraud claim pursuant to Rule 10b-5 and the related Section 10(b) of the 1934 Securities Exchange Act. Leidos teed up a significant set of issues because Item 303 concerns one of the more controversial corporate disclosures mandated by the SEC—an …

Is The Dodd-Frank Act Destroying What Is Left Of U.S. Thrifts?, Scott Deacle

Business and Economics Faculty Publications

I examine data from 1992 to 2015 to assess the Dodd-Frank Act’s impact on the performance of U.S. depository institutions, thrifts in particular. Ceteris paribus, the average FDIC-regulated institution experienced a decline in profitability as measured by pre-tax return on assets (ROA) following the Act’s passage, but the decline was concentrated among commercial banks. Small thrifts increased pre-tax profitability, after controlling for other factors including weak economic growth. Depository institution loan quality improved after Dodd-Frank, less so for small thrifts but more so for large thrifts. Efficiency ratios, which regulatory costs affect, increased, more for thrifts than banks.

Consumer Credit In America: Past, Present, And Future, Pamela Foohey, Jim Hawkins, Creola Johnson, Nathalie Martin

Faculty Scholarship

We began organizing this symposium at the start of 2016 with the recognition that consumer credit and financial services were in a state of flux prompted in significant part by the Great Recession. The Dodd-Frank Wall Street Reform and Consumer Protection Act brought with it the Consumer Financial Protection Bureau. The CFPB’s creation marked the most significant moment in modern American consumer law. Consumers gained an advocate charged with protecting them through researching, monitoring, and regulating the providers of consumer financial products and services, enforcing federal consumer financial protection laws, and, as importantly, empowering consumers.

The Dark Side Of Self-Regulation, Benjamin P. Edwards

Scholarly Works

The financial services industry indirectly regulates itself through little discussed, scandal-prone, and structurally-entrenched self-regulatory organizations. FINRA, the most prominent of these self-regulatory organizations, makes regulations and sets enforcement policy that directly affect public welfare. As with other self-regulatory organizations, FINRA's structure poses a continual risk that industry members will subvert its processes to act like a cartel, promoting industry interests at the expense of the public and contributing to the excessive rents collected by financial intermediaries. Although this dark side to self-regulation poses a constant danger, structural reforms may increase the likelihood that FINRA and other self-regulatory organizations will take …

Who Needs Contracts? Generalized Exchange Within Investment Accelerators, Brad Bernthal

Publications

This Article investigates why an expert volunteers on behalf of startups that participate in a novel type of small venture capital (“VC”) fund known as a mentor-driven investment accelerator (“MDIA”). A MDIA organizes a pool of seasoned individuals – called “mentors” – to help new companies. An obvi- ous organizational strategy would be to contract with mentors. Mentors in- stead voluntarily assist. Legal studies of norm-based exchanges do not explain what this Article calls the “mentorship conundrum”—i.e., the puzzling moti- vation of a mentor to volunteer within otherwise for-profit environments. This Article is the first to bridge the insights of …

Ceo Side Payments In Mergers And Acquisitions, Brian Broughman

Vanderbilt Law School Faculty Publications

In addition to golden parachutes, CEOs often negotiate for personal side payments in connection with the sale of their firms. Side payments differ from golden parachutes in that they are negotiated ex post in connection with a specific acquisition proposal, whereas golden parachutes are part of the executive’s employment agreement negotiated when she is hired. While side payments may benefit shareholders by countering managerial resistance to an efficient sale, they can also be used to redistribute merger proceeds to management. This Article highlights an overlooked distinction between pre-merger golden parachutes and merger side payments. Similar to a legislative rider attached …

Benchmark Regulation, Gina-Gail S. Fletcher

Faculty Scholarship

Benchmarks are metrics that are deeply embedded in the financial markets. They are essential to the efficient functioning of the markets and are used in a wide variety of ways—from pricing oil to setting interest rates for consumer lending to valuing complex financial instruments. In recent years, benchmarks have also been at the epicenter of numerous, multi-year market manipulation scandals. Oil traders, for example, deliberately execute trades to drive benchmarks lower artificially, allowing the traders to capitalize on the manipulated benchmarks. This ensures that later trades relying on the benchmarks will be more profitable than they otherwise would have been. …

Restructuring Sovereign Debt After Nml V. Argentina, Lee C. Buchheit, G. Mitu Gulati

Faculty Scholarship

The decade and a half of litigation that followed Argentina’s sovereign bond default in 2001 ended with a great disturbance in the Force. A new creditor weapon had been uncloaked: The prospect of a court injunction requiring the sovereign borrower to pay those creditors that decline to participate in a debt restructuring ratably with any payments made to those creditors that do provide the country with debt relief.

For the first time holdouts succeeded in fashioning a weapon that could be used to injure their erstwhile fellow bondholders, not just the sovereign issuer. Is the availability of this new weapon …

Too Big To Fool: Moral Hazard, Bailouts, And Corporate Responsibility, Steven L. Schwarcz

Faculty Scholarship

Domestic and international regulatory efforts to prevent another financial crisis have been converging on the idea of trying to end the problem of “too big to fail”—that systemically important financial firms take excessive risks because they profit from success and are (or at least, expect to be) bailed out by government money to avoid failure. The legal solutions being advanced to control this morally hazardous behavior tend, however, to be inefficient, ineffective, or even dangerous—such as breaking up firms and limiting their size, which can reduce economies of scale and scope; or restricting central bank authority to bail out failing …