Law Commons^™

On The Role And Regulation Of Proxy Advisors, Paul Rose

Michigan Law Review First Impressions

In anticipation of proxy season-the springtime ritual where companies prepare and deliver proxy statements in preparation for annual shareholder meetings-U.S. public companies typically reexamine their corporate governance structures and policies. Many corporate governance structures that were acceptable ten years ago are now considered outmoded or even evidence of managerial entrenchment. For example, consider the classified board of directors. In recent years, many companies have shifted from a classified board of directors to an annually elected board. A company might adopt an annually-elected board structure for a number of reasons. A classified board can serve as an entrenchment device, for instance, …

The Unjustified Judicial Creation Of Class Certification Merits Trials In Securities, Michael J. Kaufman, John M. Wunderlich

University of Michigan Journal of Law Reform

The class action device is vital to deterring securities fraud and remedying its victims, who almost never suffer losses sufficient to justify an individual suit. Nonetheless, the federal courts have begun to convert the class certification process into a premature trial on the merits, thereby precluding victims of securities fraud from pursuing otherwise valid claims of financial wrongdoing. In particular, in a series of important decisions, the federal courts have required plaintiffs to prove the essential elements of their securities fraud claims at the preliminary class certification stage.

This Article demonstrates why this trend should end. The judicial creation of …

The End Of Mandatory Securities Arbitration?, Jill I. Gross

Pace Law Review

No abstract provided.

Business Associations, J. Lani Bader

Cal Law Trends and Developments

The new Corporate Securities Act, which became effective January 2, 1969, represents a sweeping change in the total fabric of administrative securities regulation. Indeed, no legislative act during the last decade has been of more importance to the lawyer representing business interests.

Also of considerable importance is the 1968 adoption of the Professional Corporation Act, which marks the entry of the corporation in California into a hitherto closed area. Since this enactment is referred to in another article in this volume, the comments here will be restricted to a discussion of the new Corporate Securities Act and of the changes …

Sec V. Talbot: The "Misappropriation-Plus" Theory, Kalina Laleva

Golden Gate University Law Review

No abstract provided.

The Lion Awakens: The Foreign Corrupt Practices Act - 1977 To 2010, Michael B. Bixby

San Diego International Law Journal

This Article discusses the history, purposes and provisions of the Foreign Corrupt Practices Act, and traces its use and enforcement activity from 1977 to the present. This once little-used law has in recent years become the focus of aggressive activity by both the U.S. Department of Justice and the Securities and Exchange Commission. The manuscript also includes numerous charts reporting on key cases and enforcement activities over the last thirty-three years by the DOJ and SEC, as well as other information and statistics regarding the Foreign Corrupt Practices Act.

Trimming The "Judicial Oak": Rule 10b5-2(B)(1), Confidentiality Agreements, And The Proper Scope Of Insider Trading Liability, Ryan M. Davis

Vanderbilt Law Review

In recent years the Securities and Exchange Commission, commonly known as the SEC, has been involved in a number of high- profile suits that have attracted a good deal of media attention. Among those prosecuted by the Commission are hedge fund billionaire and Galleon Group founder Raj Rajaratnam, investment/Ponzi- scheme guru Bernie Madoff, television host and magazine publisher Martha Stewart, and colorful Dallas Mavericks owner Mark Cuban. Although such notable suits may simply be the SEC's attempt to justify its own existence and role in the market it polices in light of the financial disasters of the past decade, these …

Outsider Hacking And Insider Trading: The Expansion Of Liability Absent A Fiduciary Duty, James A. Jones Ii

Washington Journal of Law, Technology & Arts

In January 2008, the United States District Court for the Southern District of New York held that trading put options of a company’s stock based on inside information allegedly obtained by hacking into a computer network did not violate antifraud provisions of federal securities law. The court ruled that the defendant’s alleged “hacking and trading” did not amount to a violation of section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, promulgated thereunder, because there was no proof the hacker breached a fiduciary duty in obtaining the information. The United States Court of Appeals for the Second …

The Sec And The Extent Of Its Power To Sanction: An Analysis Of Teicher V. Securities And Exchange Commission - Did The Court Correctly Apply Chevron V. Natural Resources Defense Council To A Matter Of Agency Interpretation?, Rose Arce

Golden Gate University Law Review

This note will address two primary issues in analyzing Teicher. The first is whether the SEC has the authority within its sanctioning power, specifically under Section 15(b)(6) of the Exchange Act, to impose collateral limitations on a person who violates the Exchange Act, such as preventing that person from utilizing his or her license in another branch of the securities industry. The second is whether the SEC has the authority within its sanctioning power, specifically under Section 203(f) of the Advisers Act, to bar a person who violates the Adviser's Act from associating or seeking to become associated with an …

Private Securities Litigation Reform Act Of 1995: Do Issuers Still Get Soaked In The Safe Harbor?, Noelle Matteson

Golden Gate University Law Review

This Comment will examine the background and development of protection for forward-looking statements through the SEC, the courts and Congress. Following this background examination, Part III will focus on the recently passed Reform Act. This discussion will consider the arguments made by opponents and proponents of the Reform Act, the effects of this act and whether it is encouraging disclosure by issuers and protecting the same issuers from frivolous lawsuits.

Securities Law - Securities & Exchange Commission V. Rind: Sec Civil Enforcement Actions Are Not Subject To Statute Of Limitations, Joan E. Low

Golden Gate University Law Review

In Securities & Exchange Commission v. Rind, the United States Court of Appeals for the Ninth Circuit, ruling on an issue of first impression, held that civil enforcement actions brought by the Securities and Exchange Commission (hereinafter "SEC") are not subject to statute of limitations restrictions. Additionally, the court ruled that no right to a jury trial attaches in SEC civil enforcement actions seeking disgorgement of illicit profits.

Securities Law - Mccormick V. Fund American Companies: Altering The Total Mix Of Information Made Available During Disclosure In Corporate Repurchases Of Stock, David E. Wanis

Golden Gate University Law Review

In McCormick v. Fund American Companies, the Ninth Circuit granted summary judgment to defendant corporation over plaintiff shareholder's claim that defendant had violated the Securities Exchange Act by misrepresenting or omitting material information during negotiations to repurchase stock from plaintiff. The court found that in light of plaintiff's status as a "sophisticated business executive," defendant's alleged misrepresentations and omissions did not "significantly alter the total mix of information made available" concerning the contemplated sale of a subsidiary company of defendant corporation.

Securities Law, Peter A. Maclaren

Golden Gate University Law Review

In Hocking v. Dubois, the Ninth Circuit held that where an arrangement to sell a condominium included an option to participate in a rental pool arrangement ("RPA"), the arrangement constituted an investment contract. Consequently, what appeared to be a simple sale of real estate was subject to the provisions of the federal securities laws including the antifraud provisions of Rule I0b-5. This note will examine the rationale supporting the Ninth Circuit's application of securities law to condominium sales, examine the application of rules limiting private causes of action, and analyze the issues presented by the facts of Hocking.

Securities Law, Peter A. Mastromonaco

Golden Gate University Law Review

No abstract provided.

Fraud On The Market: The Decline Of Reliance In A 10b-5 Action, M. Lynn Haggerty

Golden Gate University Law Review

Since the Supreme Court's decision in Affiliated Ute Citizens v. United States, l there has been considerable variation among the circuits regarding the requirement of reliance as an element of an action under rule 10b-5 of the federal securities regulations. The differences seem to stem from a disagreement as to the underlying purposes of the securities regulations. While the regulations were established to force disclosure of material investment information and to maintain market stability, they were also designed to protect the investing public. In an attempt to reconcile these sometimes disparate purposes, one circuit has designed a theory since labeled …

Leveraged Etfs: The Trojan Horse Has Passed The Margin-Rule Gates, William M. Humphries

Seattle University Law Review

What do the Great Depression, the Great Recession, and the demise of Lehman Brothers and Bear Sterns all have in common? One word: leverage. The misuse of leverage, in all its forms, contributed greatly to all of these events. Yet even today, common investors can purchase a leveraged exchange-traded fund (leveraged ETF), a complex product that uses leverage to increase returns, without triggering applicable laws designed to regulate the use of leverage. This Comment articulates the basics surrounding the functions and operations of leveraged ETFs and margin rules in order to assess the compatibility of the two. The Comment argues …

The Challenges For Directors In Piloting Through State And Federal Standards In The Maelstrom Of Risk Management, Chief Justice E. Norman Veasey

Seattle University Law Review

In the 2010 Berle Center Directors’ Academy Keynote Address, Chief Justice Veasey addresses “the federal and state contexts relating to the corporate-governance focus on business risk and the expectations laid at the doorstep of directors and officers of U.S. public companies.” Specifically, Chief Justice Veasey looks “at the governance landscape through both a federal regulatory lens and a state judicial lens as it relates to risk assessment and risk management.”

On The Way To Us-Style Hostile Tender Offers In Germany? - The European Attempt To Harmonize The Takeover Law And Its Impact On German Company Law, Roland Donath

Annual Survey of International & Comparative Law

No abstract provided.

Securities, Edward L. Knapp

Golden Gate University Law Review

No abstract provided.

State Sovereignty's Impact On Federal Regulation Of Municipal Securities, Margaret Berlese, Barbara E. Herzig

Golden Gate University Law Review

No abstract provided.

Securities, Daniel V. Burke

Golden Gate University Law Review

No abstract provided.

Communications Decency Act Provides No Safe Harbor Against Antifraud Liability For Hyperlinks To Third-Party Content Under The Securities And Exchange Act, Sheri Wardwell

Washington Journal of Law, Technology & Arts

In 2008, the U.S. Securities and Exchange Commission (SEC) released interpretive guidelines regarding antifraud liability for statements and disclosures made on company Web sites. The SEC noted that a company may incur both criminal and civil liability under section 10(b) of the Securities Exchange Act and Rule 10b-5 for hyperlinks to third-party content. However, the Communications Decency Act, 47 U.S.C. § 230(c), expressly preempts civil liability for interactive computer service providers that post hyperlinks to third-party content on their Web sites. This Article examines whether section 230 immunizes companies from civil liability for hyperlinks to third-party content despite the SEC’s …

Turning A Short-Term Fling Into A Long-Term Commitment: Board Duties In A New Era, Nadelle Grossman

University of Michigan Journal of Law Reform

Corporate boards face significant pressure to make decisions that maximize profits in the short run. That pressure comes in part from executives who are financially rewarded for short-term profits despite the long-term risks associated with those profit-making activities. The current financial crisis, where executives at AIG and numerous other institutions ignored the long-term risks associated with their mortgage backed securities investments, arose largely because those executives were compensated for the short-term profits generated by those investments despite their longer-term risks. Pressure on boards for short-term profits also comes from activist investors who seek to make quick money off of trading …

Two Birds, One Stone: Achieving Corporate Social Responsibility Through The Shareholder-Primacy Norm, Marshall M. Magaro

Indiana Law Journal

No abstract provided.

Does Sarbanes-Oxley Protect Whistleblowers? The Recent Experience Of Companies And Whistleblowing Workers Under Sox, Megan E. Mowrey, L. Stephen Cash, Thomas L. Dickens

William & Mary Business Law Review

The Sarbanes Oxley Act of 2002 (SOX) attempts to prevent fraud in the business activities of public companies. SOX includes regulations designed to protect whistleblowing employees that may be triggered if workers allege fraudulent activity by their employers, and, in response, their employers retaliate. This Essay discusses the strength of the whistleblowing protection provided by SOX, the conduct covered by the SOX whistleblower provisions, and specifically the application of the law by the courts

Betting The Farm: The Tic Turf War And Why Tics Constitute Investment Contracts Under Federal Securities Laws, David Rich

William & Mary Business Law Review

No abstract provided.

Blue Skies Ahead: Auction Rate Securities And The Need For A Private Right Of Action For New York Investors, Stephanie Myers

Pace Law Review

No abstract provided.

Corporate Governance In The Courtroom: An Empirical Analysis, Jessica Erickson

William & Mary Law Review

Conventional wisdom is that shareholder derivative suits are dead. Yet this death knell is decidedly premature. The current conception of shareholder derivative suits is based on an empirical record limited to suits filed in Delaware or on behalf of Delaware corporations, leaving suits outside this sphere in the shadows of corporate law scholarship. This Article aims to fill this gap by presenting the first empirical examination of shareholder derivative suits in the federal courts. Using an original, hand-collected data set, my study reveals that shareholder derivative suits are far from dead. Shareholders file more shareholder derivative suits than securities class …

Evolving Regulation Of Corporate Governance And The Implications For D&O Liability: The United States And Australia, Joan T.A. Gabel, Nancy R. Mansfield, Paul Von Nessen, Austin W. Hall, Andrew Jones

San Diego International Law Journal

This Article compares the modern corporate regulatory environments in the United States and Australia, including an analysis of the climate for Directors & Officers (D & O) liability coverage. Comparing these regulations across two large markets with similar historical bases for assessing director and officer liability allows us to explore which reforms may be more effective as new scandals emerge.

Opening The Rule 10b-5 Floodgates: Ninth Circuit Split In Gilead Sciences Leaves The Loss Causation Pleading Standard In Limbo , Brandon J. Stoker

BYU Law Review

No abstract provided.