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Full-Text Articles in Law
Are The Stock Markets “Rigged”? An Empirical Analysis Of Regulatory Change, Stephen F. Diamond, Jennifer W. Kuan
Are The Stock Markets “Rigged”? An Empirical Analysis Of Regulatory Change, Stephen F. Diamond, Jennifer W. Kuan
Faculty Publications
Volatile events in the stock market such as the 2010 Flash Crash have sparked concern that financial markets are “rigged” in favor of trading firms that use high frequency trading (“HFT”) systems. We analyze a regulatory change implemented by the SEC in 2007 by examining its effect on a key market metric, the bid-ask spread, an investor cost, and find that the regulatory shift, indeed, disadvantages investors. We link the implementation of this change to a shift in the volume of trades from a low-cost venue to a high-cost venue. We argue that this outcome is predicted by the incentives …
The Case For Federal Preemption Of State Blue Sky Laws, Rutheford B. Campbell Jr.
The Case For Federal Preemption Of State Blue Sky Laws, Rutheford B. Campbell Jr.
Law Faculty Popular Media
In our market economy, imposing rules on capital formation makes economic sense. Well-constructed rules regarding capital formation can promote the efficient flow of capital to its highest and best use and prevent or ameliorate fraud or unfairness to investors. These rules, however, generate additional offering costs that may retard or in some cases completely choke off the flow of capital from investors to businesses. The problem with state blue sky laws is their registration requirements, which significantly impede efficient capital formation and provide no material economic or societal benefits, such as protection of investors from fraud.
The Case For Federal Pre-Emption Of State Blue Sky Laws, Rutheford B. Campbell Jr.
The Case For Federal Pre-Emption Of State Blue Sky Laws, Rutheford B. Campbell Jr.
Law Faculty Scholarly Articles
State blue sky laws—state laws that regulate a company’s offer and sale of securities—are a substantial barrier to businesses’ efficient access to external capital. The registration provisions in state blue sky laws have been especially harmful to small businesses, a vital component of our economy that may account for 30% of the nation’s employment. The costs associated with complying with more than fifty separate and independent obligations to register securities often exceed what small businesses can pay and thus may foreclose small businesses from the capital market. At the same time, requiring small businesses to comply with multiple registration regimes …
Ask The Professor: Will The Recent Supreme Court Case In Salman Result In More Cftc Enforcement Actions Charging Insider Trading?, Ronald H. Filler, Jerry W. Markham
Ask The Professor: Will The Recent Supreme Court Case In Salman Result In More Cftc Enforcement Actions Charging Insider Trading?, Ronald H. Filler, Jerry W. Markham
Articles & Chapters
No abstract provided.
Regulatory Updates: Finra And Sec Rule Changes And Guidance Of Interest, Christine Lazaro
Regulatory Updates: Finra And Sec Rule Changes And Guidance Of Interest, Christine Lazaro
Faculty Publications
Over the past year, FINRA has proposed and approved new rules and amendments to its existing rules. FINRA has also issued supplemental guidance on existing rules. This article highlights those rule changes and guidance governing sales practice obligations of brokers, as well as the arbitration process. Additionally, this article will cover certain recently adopted SEC and CFTC rules.
Laxity At The Gates: The Sec's Neglect To Enforce Control Person Liability, Marc I. Steinberg
Laxity At The Gates: The Sec's Neglect To Enforce Control Person Liability, Marc I. Steinberg
Faculty Journal Articles and Book Chapters
In recent years the SEC has repeatedly stressed the importance of holding gatekeepers accountable in order to promote effective corporate governance. In spite of these assertions, the Commission has failed to use two powerful tools at its disposal to pursue gatekeepers. Section 20(a) of the Securities Exchange Act provides for liability against “control persons.” This Section imposes liability upon any person who controls another liable person to the same extent as such controlled person, unless she can establish that she acted in good faith and did not directly induce the violation. Sections 15(b)(4)(E) and 15(b)(6))A) of the Exchange Act give …
The Sec's Neglected Weapon: A Proposed Amendment To Section 17(A)(3) And The Application Of Negligent Insider Trading, Marc I. Steinberg, Abel Ramirez Jr.
The Sec's Neglected Weapon: A Proposed Amendment To Section 17(A)(3) And The Application Of Negligent Insider Trading, Marc I. Steinberg, Abel Ramirez Jr.
Faculty Journal Articles and Book Chapters
Section 17(a)(3) has been widely neglected as a weapon in the Securities and Exchange Commission’s (SEC) arsenal against insider trading. Section 17(a)(3) carries the potential of providing the SEC with an advantage that is not afforded by Section 10(b), Rule 10b-5, or Rule 14e-3 — the authority to prosecute insider trading claims premised on the lesser mental state of negligence, thus casting a wider net to enforce insider trading regulations against a new category of defendants — negligent inside traders as well as negligent tippers and tippees. Currently, when pursuing insider trading violations, the Securities and Exchange Commission (SEC) primarily …