Law Commons^™

Auditor Liability To External Users For Misleading Financial Statements Of Publicly Listed Companies: Two Normative Propositions, John Ja Burke

John JA Burke

In his 2006 article, Professor Eric L. Talley undertook a limited, but important enterprise, to quantify the risk of cataclysmic legal liability faced by audit firms for failure to detect fraud in company prepared financial statements. Drawing primarily from the Securities Class Action Alert database, Professor Talley constructed a “conceptual diagram” to formulate the level of aggregate risk capable of threatening the viability of audit firms sustaining an adverse judgment. The enterprise contributed an objective framework to assist policymakers, both within and outside the United States, to develop appropriate regulatory reforms to address the audit industry’s demand to “limit exposure …

Investing In Distressed Italian Companies Under The Reformed Italian Bankruptcy Law - A Comparison With The Us Bankruptcy Code, Pierantonio Musso

Pierantonio Musso

This article presents a scheme to profitably invest in distressed Italian companies by taking advantage of the Italian Bankruptcy Law in comparison with the US Bankruptcy Code. The risks connected to the insolvency proceeding are analyzed under their economic effects and foreseen in their general appearance. Specific remedies to avoid or mitigate the potential risks are provided. Singular advantages, available only in the proposed investment scheme under the Italian Law, are described. As a result the investment produces a less risky and more profitable outcome than an investment in a non-distressed and non-Italian target company.

Holding Credit Reporting Agencies Accountable:How The Financial Crisis May Be Contributing To Improving Accuracy In Credit Reporting, David D. Schein, James D. Phillips

David D. Schein

The ongoing financial crisis has increased the emphasis on consumers’ credit reports. The significance of credit scores has become a focus for many consumers due to the end of easy credit that began in late 2007. Credit scores are used for mortgages, car loans, credit cards, and other consumer credit, insurance, and employment. The cost of a poor credit score, if credit is offered at all, can be devastatingly significant. The impact of credit reports on credit scores justifies an examination of the legal exposure for the providers of those credit reports—the credit reporting agencies (CRAs). This article examines the …

La Sociedad Mercantil Unipersonal: Pertinencia De Su Utilización En México, Max Garcia

Max Garcia Sanchez

No abstract provided.

Damages To Business Interests, R. Steven Thing

R. Steven Thing

No abstract provided.

When Parallel Tracks Cross: Applying The New Insider Trading Regulations Under Dodd-Frank Derails, Gregory J. Melus

Gregory J Melus

Abstract: When Parallel Tracks Cross: Applying the New Insider Trading Regulations under Dodd-Frank Derails On March 11, 2011, the U.S. Securities and Exchange Commission (SEC) brought an administrative proceeding against former Goldman Sachs Director, Rajat Gupta for participating in the insider trading scheme of Raj Rajaratnam. The complaint was the first application of the SEC’s expanded authority under the Dodd-Frank Act to charge an unregistered entity for securities violations in an SEC enforcement hearing. This Comment argues that bringing an SEC administrative proceeding against Rajat Gupta would not succeed because the retroactive application of the Dodd-Frank law would fail the …

Is Free Trade "Free?" Is It Even "Trade?" Oppression And Consent In Hemispheric Trade Agreements, Frank J. Garcia

Frank J. Garcia

In order for free trade as a policy to deliver fully on its social promise, it must be both “free” and “trade.” In fact, it must be free, in the sense of voluntary, to be trade at all. In other words, for normative and practical reasons, free trade requires that global economic relations be structured through agreements which reflect the consent of those subject to them. The neoliberal trading system today only imperfectly lives up to this obligation. In this essay, I will examine the role of consent in trade agreements, drawing on examples from CAFTA as representative of important …

The ‘Fair’ Trade Law Of Nations, Or A ‘Fair’ Global Law Of Economic Relations?, Frank J. Garcia

Frank J. Garcia

No abstract provided.

The Moral Hazard Problem In Global Economic Regulation, Frank J. Garcia

Frank J. Garcia

Global regulation of international business transactions presents a particular form of the moral hazard problem. Global firms use economic and political power to manipulate state and state-controlled multilateral regulation to preserve their opportunity to externalize the social costs of global economic activity with impunity. Unless other actors can effectively counter this at the national and global regulatory levels, globalization re-creates the conditions for under-regulated or “robber baron” capitalism at the global level. This model of economic activity has been rejected at the national level by the same modern democratic capitalist states which currently dominate globalization, creating a crisis of legitimacy …

Save The Economy: Break Up The Big Banks And Shape Up The Regulators, Charles W. Murdock

Charles W. Murdock

Save the Economy: Break Up the Big Banks and Shape Up the Regulators

The U.S. economy is still reeling from the financial crisis that exploded in the fall of 2008. This article asserts that the big banks were major culprits in causing the crisis, by funding the non-bank lenders that created the toxic mortgages which the big banks securitized and sold to unwary investors. Paradoxically, banks which were then too big to fail are even larger today.

The article briefly reviews the history of banking from the Founding Fathers to the deregulatory mindset that has been present since 1980. It …

Governing China’S Financial Disputes In The Aftermath Of The Global Financial Crisis Of 2008, Shahla F. Ali, Robin (Hui) Huang

Shahla F. Ali

In light of the recent global financial crisis of 2008, this article critically compares how China’s national arbitration commissions and local courts are responding to new challenges brought about by an increase in the number of banking related disputes. Drawing on comparative case analysis, the article examines the operation of CIETAC and the Shanghai Courts financial dispute resolution mechanisms in resolving financial disputes. Drawing on insights from selected case findings, the article provides insight into which institution is in the best position to handle financial-related cases, discusses prospects for coordination between the two and sets out proposals for further reform. …

The Case Against Credit Bidding: Optimal Creditor Behavior In Chapter 11 Collateral Auctions, Jared Kawalsky

Jared Kawalsky

This paper will attempt to advance some theoretical justifications for recent bankruptcy decisions that have denied the existence of a right for secured creditors to credit bid in the course of a reorganization under § 1129 of the Bankruptcy Code. § 363 of the Bankruptcy Code specifically grants secured creditors the right to bid their credit in a sale of their collateral as part of a going concern sale. However, in a reorganiztion under § 1129, secured creditors are not necessarily permitted to participate in an auction of the collateral underlying their liens. Relying on the broad auction theory literature …

Delaware’S Relevance In Chapter 22: Who Is “Courting Failure” Now?, Ruth S. Lee

Ruth S Lee

This study presents surprising new statistical evidence that contributes to the current “over-heated” academic debate about the Delaware courts’ role in Chapter 11 failure. In 2001, Professor LoPucki published an influential article suggesting that when large corporations file for bankruptcy under Chapter 11, they fail at a dramatically higher rate in Delaware courts than in other jurisdictions. He attributed this to corruption. His article enraged many academics and practitioners, and ignited many articles in the past two decades. This study presents startling evidence that while Chapter 11s filed in Delaware courts did have much higher failure rates from 1991-1996, after …

The Hierarchy That Wasn't There: Elevating ‘Usage’ To Its Rightful Position For Contracts Governed By The Cisg, William P. Johnson

William P. Johnson

The term ‘usage’ generally refers to any practice that is habitual or customary within a given industry, trade or region. Under domestic U.S. sales law, the term ‘usage of trade’ is defined specifically to refer to any practice or method of dealing that has such regularity of observance as to justify an expectation that parties to a particular contract will observe the usage, even though the parties have not expressly incorporated the usage into their contract. Usage of trade can be used under domestic U.S. sales law to interpret, supplement or explain a written agreement. But usage of trade may …

Codifying Bankruptcy Law's Fastpass: New Value And The Absolute Priority Rule, David P. Hamm Jr

David P Hamm Jr

The notion behind the absolute priority rule is not novel to any of us. We all learned at a very young age that if someone is in front of you in line—they get served first. This basic notion of fairness affects our lives in several everyday contexts—including bankruptcy. The people in the “bankruptcy” line are the holders of interests in the debtor. If the interest held by party A is “senior” to that of party B, then party A is in front of party B in line. The absolute priority rule essentially provides that the party A must be paid …

Novel "Neutrality" Claims Against Internet Platforms: A Reasonable Framework For Initial Scrutiny, Jeffrey Jarosch

Jeffrey Jarosch

This Article examines a recent trend in which the Federal Trade Commission and other enforcement agencies investigate internet platforms for behavior that is insufficiently “neutral” towards users or third parties that interact with the platform. For example, Google faces a formal FTC investigation based on allegations that it has tinkered with search results rather than presenting users with a “neutral” result. Twitter, too, faces a formal investigation after the social media service restricted the ways in which third party developers could interact with Twitter through its application programming interface (API). These investigations represent a new attempt to shift the network …

Eliminating Wall Street's Safety Net: How A Systemic Risk Premium Can Solve "Too Big To Fail", Jason Rudderman

Jason Rudderman

Eliminating Wall Street’s Safety Net: How a Systemic Risk Premium Can Solve “Too Big to Fail” The financial crisis of 2007 – 2009 sent the United States and the global economy into its worst recession since the great depression. Large, interconnected financial and non-financial institutions were at the center of the financial crisis. The institutions highly leveraged positions during the crisis led the government to take extreme measures, including bailing out some of these “too big to fail,” but failing institutions. The crisis led the United States Congress to pass the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank …

Social Media And The Rise In Consumer Bargaining Power, Wayne Barnes

Wayne Barnes

Consumers are constantly entering into form contracts, both offline and online. They do not read most of the terms, but the duty to read says the contracts are nevertheless fully enforceable. Moreover, consumers lack any real bargaining power when assenting to such contracts with merchants. Not only that, but if the products malfunctions, or they are somehow damaged by it, they will likely face the prospect of being limited in their available remedies because of boilerplate terms which are favorable to the merchant. In the “old days,” the consumer had no real recourse but to call a 1-800 number, and …

Social Media And The Rise In Consumer Bargaining Power, Wayne Barnes

Wayne Barnes

Consumers are constantly entering into form contracts, both offline and online. They do not read most of the terms, but the duty to read says the contracts are nevertheless fully enforceable. Moreover, consumers lack any real bargaining power when assenting to such contracts with merchants. Not only that, but if the products malfunctions, or they are somehow damaged by it, they will likely face the prospect of being limited in their available remedies because of boilerplate terms which are favorable to the merchant. In the “old days,” the consumer had no real recourse but to call a 1-800 number, and …

Social Media And The Rise In Consumer Bargaining Power, Wayne Barnes

Wayne Barnes

Consumers are constantly entering into form contracts, both offline and online. They do not read most of the terms, but the duty to read says the contracts are nevertheless fully enforceable. Moreover, consumers lack any real bargaining power when assenting to such contracts with merchants. Not only that, but if the products malfunctions, or they are somehow damaged by it, they will likely face the prospect of being limited in their available remedies because of boilerplate terms which are favorable to the merchant. In the “old days,” the consumer had no real recourse but to call a 1-800 number, and …

The Case Against The Dodd-Frank Act’S Living Wills: Contingency Planning Following The Financial Crisis, Nizan Geslevich Packin

Nizan Geslevich Packin

The Dodd-Frank Act’s “living will” requirement mandates that systemically important financial institutions develop wide-ranging strategic analyses of their business affairs, and submit comprehensive contingency plans for reorganization or resolution of their operations to regulators. The goal is to mitigate risks to the financial stability of the US and encourage last-resort planning, which will allow for a rapid and efficient response in the event of an emergency. Beyond the general framework set forth in the Dodd-Frank Act, very little is known about living wills; no legal literature currently exists on what the concept entails, and regulators have not yet created any …

The End Of Mortgage Securitization? Electronic Registration As A Threat To Bankruptcy Remotenes, John P. Hunt, Richard Stanton, Nancy Wallace

John P Hunt

A central tenet of asset securitization in the United States—that assets are bankruptcy remote from their sponsors—may be threatened by innovations in the transfer of mortgage loans from the loan-originators (sponsors) to the legal entities that own the mortgage pools (the Special Purpose Vehicles (SPVs)). The major legal argument advanced in the paper is that because the mortgage is an interest in real property, the bankruptcy-remoteness rules applicable to real property, including § 544(a)(3) of the Bankruptcy Code, create a risk to the bankruptcy remoteness of mortgage transactions unless proper recording occurs. We review the traditional mortgage transfer process and …

To Empower, Prohibit, Or Delegate?: Regulatory Strategies For Modernizing The Consumer Credit Market, Yoon-Ho Alex Lee, K. Jeremy Ko

Yoon-Ho A Lee

A number of proposals currently exist to bolster regulation in the market for consumer credit products. How should regulators evaluate their various options? Our diagnosis of the market—based on a review of empirical evidence and economic models—is that consumer are failing to minimize the economic cost of debt as a result of lack of information, lack of expertise, or lack of self-awareness. Consequently, the market lacks competitive dynamics and fails to eliminate welfare-reducing products. We view the space of regulatory options as a triangle with three nodes—empowerment, prohibition, or delegation—depending on whether a particular decision regarding consumer credit arrangement should …

To Empower, Prohibit, Or Delegate?: Regulatory Strategies For Modernizing The Consumer Credit Market, Yoon-Ho A. Lee

Yoon-Ho A Lee

A number of proposals currently exist to bolster regulation in the market for consumer credit products. How should regulators evaluate their various options? Our diagnosis of the market—based on a review of empirical evidence and economic models—is that consumer are failing to minimize the economic cost of debt as a result of lack of information, lack of expertise, or lack of self-awareness. Consequently, the market lacks competitive dynamics and fails to eliminate welfare-reducing products. We view the space of regulatory options as a triangle with three nodes—empowerment, prohibition, or delegation—depending on whether a particular decision regarding consumer credit arrangement should …

A Global E-Commerce Tax To Fund Global Public Goods, Rifat Azam Dr.

Rifat Azam Dr.

A Global E-commerce Tax to Fund Global Public Goods Rifat Azam

Abstract

This article argues for the imposition of a “global e-commerce tax” on global e-commerce income for funding global public goods. The idea is to create an international body (the "global fund"), to vest it with the authority to impose global tax on global e-commerce income, and to use the tax revenues to fund global public goods. I wish to stress that the model rests on two pillars: global taxation and global spending. The article presents, for the first time, an outline for a concrete design and structure of …

The Availability Of Takeover Defenses And Deal Protection Devices For Anglo-American Target Companies, Albert "Chip" Saulsbury Iv

Albert "Chip" Saulsbury IV

On July 21, 2011 the U.K.’s Panel on Takeovers and Mergers (the “Panel”) released amendments to the City Code on Takeovers and Mergers (the “Takeover Code”). These amendments, which take effect on September 19, 2011, will have a significant impact on the manner in which companies in the U.K. engage in mergers and acquisitions (“M&A”) and will amplify the differences between British and American deal activity. Because of these amendments to the Takeover Code within the last month, the following Article, The Availability of Takeover Defenses and Deal Protection Devices for Anglo-American Target Companies, is especially timely and will provide …

Voice Without Say: Why More Capitalist Firms Are Not (Genuinely) Participatory, Justin Schwartz

Justin Schwartz

Why are most capitalist enterprises of any size organized as authoritarian bureaucracies rather than incorporating genuinely employee participation that would give the workers real authority? Even firms with employee participation programs leave virtually all decision making power in the hands of management. The standard answer is that hierarchy is more economically efficient than any sort of genuine participation, so that participatory firms would be less productive or efficient and lose out to more traditional competitors. This answer is indefensible. After surveying the history, legal status, and varieties of employee participation, I examine and reject as question-begging the argument that the …

The Ftc’S Proposal For Regulating Ip Through Ssos Would Replace Private Coordination With Government Hold-Up, F. Scott Kieff, Richard Epstein, Daniel Spulber

F. Scott Kieff

In its recent report entitled “The Evolving IP Marketplace,” the Federal Trade Commission (FTC) advances a far-reaching regulatory approach (Proposal) whose likely effect would be to distort the operation of the intellectual property (IP) marketplace in ways that will hamper the innovation and commercialization of new technologies. The gist of the FTC Proposal is to rely on highly non-standard and misguided definitions of economic terms of art such as “ex ante” and “hold-up,” while urging new inefficient rules for calculating damages for patent infringement. Stripped of the technicalities, the FTC Proposal would so reduce the costs of infringement by downstream …

Nafta And Cafta-Dr:The Latin American Reality, Diego M. Vincenzi

Diego M Vincenzi

No abstract provided.

Who Sits On Texas Corporate Boards? Texas Corporate Directors: Who They Are And What They Do, Lawrence J. Trautman

Lawrence J. Trautman Sr.

Corporate directors play an important role in governing American business, in the capital formation process, and are key to economic growth. Texas businesses play a disproportionately important role among the states in aggregate U.S. job creation, responsible for 37% of all net new American jobs since the recovery began. It is the job of the board of directors to govern the corporation. Director’s duties and responsibilities include: the duty of care; duty of loyalty; and duty of good faith. The recently published Trautman’s Guide™ to Texas Corporate Directors, provides biographical data for most of the approximately 20,000 for-profit corporate directors …