Banking and Finance Law Commons^™

Lending Innovations, Xuan-Thao Nguyen

Brooklyn Law Review

This article is about innovations. Startups and their founders in the innovation intensive sectors cannot reach their dreams without financing. They cannot turn to banks for loans. Banks, from community to commercial banks, shun startups due to antiquated banking law, business model and high risks associated with tech lending. But there are outlier banks who disrupt the banking business model with lending innovation, fueling startups with loans that allow tech innovations to occur from Silicon Valley to Route 128 of the northeast corridor, and from Shanghai, China to Herzliya, Israel. With qualitative and quantitative patent data, this article demonstrates how …

Afghanistan's New Vat, Part 1: Invoice Matching Or A Unitary Digital Invoice, Richard Thompson Ainsworth, Musaad Alwohaibi, Andrew Leahey, Yujin Li, Haseena Rahman

Faculty Scholarship

In the summer of 1990 two groundbreaking articles on business process re-engineering (BPR) were published, one by Thomas H. Davenport (a professor in information technology at Babson College) in the MIT Sloan Management Review, the other by Michael Hammer (a professor of computer science at MIT) in the Harvard Business Review. BPR is a management strategy that analyzes IT-intensive workflow designs and business processes within an organization.

On December 21, 2020 (Jadi 1, 1399) Afghanistan was scheduled to implement a 10% VAT. It has been delayed one year by the pandemic. When it does implement, Afghanistan will have significant workflow …

Enough Is As Good As A Feast, Noah C. Chauvin

Seattle University Law Review

Ipse Dixit, the podcast on legal scholarship, provides a valuable service to the legal community and particularly to the legal academy. The podcast’s hosts skillfully interview guests about their legal and law-related scholarship, helping those guests communicate their ideas clearly and concisely. In this review essay, I argue that Ipse Dixit has made a major contribution to legal scholarship by demonstrating in its interview episodes that law review articles are neither the only nor the best way of communicating scholarly ideas. This contribution should be considered “scholarship,” because one of the primary goals of scholarship is to communicate new ideas.

Stewardship 2021: The Centrality Of Institutional Investor Regulation To Restoring A Fair And Sustainable American Economy, Leo E. Strine Jr.

All Faculty Scholarship

In this essay, which formed the basis for the luncheon keynote speech at the Rethinking Stewardship online conference presented by the Ira M. Millstein Center for Global Markets and Corporate Ownership at Columbia Law School and ECGI, the European Corporate Governance Institute, the essential, but not sufficient, role of regulation to promote more effective stewardship by institutional investors is discussed. To frame specific policy recommendations that align the responsibilities of institutional investors with the best interests of their human investors in sustainable wealth creation, environmental responsibility, the respectful treatment of stakeholders, and, in particular, the fair pay and treatment of …

A False Sense Of Security: How Congress And The Sec Are Dropping The Ball On Cryptocurrency, Tessa E. Shurr

Dickinson Law Review (2017-Present)

Today, companies use blockchain technology and digital assets for a variety of purposes. This Comment analyzes the digital token. If the Securities and Exchange Commission (SEC) views a digital token as a security, then the issuer of the digital token must comply with the registration and extensive disclosure requirements of federal securities laws.

To determine whether a digital asset is a security, the SEC relies on the test that the Supreme Court established in SEC v. W.J. Howey Co. Rather than enforcing a statute or agency rule, the SEC enforces securities laws by applying the Howey test on a fact-intensive …

Airdrops: “Free” Tokens Are Not Free From Regulatory Compliance, Bridgett S. Bauer Esq.

University of Miami Business Law Review

No abstract provided.

Bank Resolution And Creditor Distribution: The Tension Shaping Global Banking –Part Ii: The Cross-Border Dimension, David Ramos, Javier Solana

University of Miami Business Law Review

New bank resolution frameworks that aim to address the complex task of managing the collapse of a large financial institution stand in considerable tension with basic principles and policy objectives of insolvency law. In this two-part study, we present an analytical framework that aims at helping us understand how this tension can undermine the effectiveness of the new bank resolution frameworks. In the first part of this article, we introduced our three-layered framework and explored its first two layers: the group dimension, and the duality of crisis-prevention and crisis-management tools. In this Part II, we explore the last layer: the …

Table Of Contents, Seattle University Law Review

Seattle University Law Review

Table of Contents

Shareholder Value(S): Index Fund Esg Activism And The New Millennial Corporate Governance, David H. Webber, Michal Barzuza, Quinn Curtis

Faculty Scholarship

Major index fund operators have been criticized as ineffective stewards of the firms in which they are now the largest shareholders. While scholars debate whether this passivity is a serious problem, index funds’ generally docile approach to ownership is broadly acknowledged.

However, this Article argues that the notion that index funds are passive owners overlooks an important dimension in which index funds have demonstrated outspoken, confrontational, and effective stewardship. Specifically, we document that index funds have taken a leading role in challenging management and voting
against directors in order to advance board diversity and corporate sustainability. We show that index …

The Foreign Investment Risk Review Modernization Act: The Double-Edged Sword Of U.S. Foreign Investment Regulations, J. Russell Blakey

Loyola of Los Angeles Law Review

No abstract provided.

A Taxonomy Of Cryptocurrency Enforcement Actions, Peter J. Henning

Brooklyn Journal of Corporate, Financial & Commercial Law

This article looks at how the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) have pursued cases involving cryptocurrencies. A number of prosecutions have been brought against defendants who misled investors into believing that they were obtaining cryptocurrencies when in fact there were simply false statements and schemes to defraud, such as Ponzi schemes. When a company has attempted to issue a cryptocurrency to investors, the SEC has relied on Section 5(a) and 5(c) of the Securities Act of 1933 to require that issuers file a registration statement with the Commission. This is not an easy process …

The Criminal, Regulatory, And Civil Issues Surrounding Intellectual Property And Cybersecurity, Ernest Edward Badway, Christie Mcguinness

Brooklyn Journal of Corporate, Financial & Commercial Law

Cyber-attacks have affected all organizations and individual consumers. Dissemination of relevant information and attention to strong information security practices is an important tool in fighting this cyber “pandemic.” Additionally, the legal and regulatory liability companies face from cyber-attacks as well as general strategies and practical solutions companies may implement to protect against cyber-intrusions and respond effectively in the event of an attack are considered. There are many iterations of cyber-crime, and we address the various methods cybercriminals use and the many ways cyber-attacks can take place, as well as the entities and victims affected. Moreover, the legal liability and regulatory …

“Estonia’S Gift To The World”: The Implementation Of A Blockchain Protocol For Corporate Governance In New York, Sydney Lauren Abualy

Brooklyn Journal of Corporate, Financial & Commercial Law

The traditional procedures of corporate governance are not designed to resolve issues related to close outcomes of corporate votes, empty voting practices, the proxy voting protocol, verification of shareholder identities, and access to corporate records. Blockchain technology allows all corporate shareholders to participate in corporate governance more conveniently, with increased transparency, on a secure network. Estonia sought to revolutionize corporate governance by facilitating the development of a blockchain based e-voting protocol for shareholders of companies listed on the Tallinn Stock Exchange to vote in shareholder meetings. After unsuccessful attempts, New York stands well behind other states, such as Delaware, in …

Revising The Debt Limit For “Small Business Debtors”: The Legislative Half-Measure Of The Small Business Reorganization Act, Michael C. Blackmon

Brooklyn Journal of Corporate, Financial & Commercial Law

Bankruptcy law changed drastically in 2019 with the passage of several bills. This Note will examine two of them. First, the Family Farmer Relief Act of 2019 raised the debt limit of the family farmer from $4,411,400 to $10,000,000. This enables more financially distressed family farmers to be eligible for Chapter 12 relief, a reorganizational tool designed for farmers. Second, the Small Business Reorganization Act of 2019 created Subchapter V – Small Business Debtor Reorganization in Chapter 11. This new Subchapter streamlined the reorganization process for small business debtors by removing roadblocks which often derail a reorganization of a small …

Unmasking The Villain: Exposing Scammers’ Identities To Defeat Harmful Calls, Katherine Teng

Brooklyn Journal of Corporate, Financial & Commercial Law

Since 1991, Congress has attempted to limit unwanted phone calls through legislative efforts. However, past and current laws remain ineffective as scam call complaints continue to increase while the harm of these calls remains severe. Currently, the laws affecting telecommunication regulation focus on reactive measures rather than preventative solutions. Most recently, Congress has passed the Telephone Robocall Abuse Criminal Enforcement and Deterrence Act, which will require telecommunication companies to implement SHAKEN/STIR technology to end scam calls before they reach consumers. While this is the most progressive legislation addressing scam calls, this Note will suggest that phone numbers be registered to …

Front Matter, Michigan Business & Entrepreneurial Law Review

Michigan Business & Entrepreneurial Law Review

Front matter for Volume 9, Issue 2 of the Michigan Business & Entrepreneurial Law Review.

Commercial Law Intersections, Giuliano Castellano, Andrea Tosato

All Faculty Scholarship

Commercial law is not a single, monolithic entity. It has grown into a dense thicket of subject-specific branches that govern a broad range of transactions and corporate actions. When one of these events falls concurrently within the purview of two or more of these commercial law branches - such as corporate law, intellectual property law, secured transactions law, conduct and prudential regulation - an overlap materializes. We refer to this legal phenomenon as a commercial law intersection (CLI). Some notable examples of transactions that feature CLIs include bank loans secured by shares, supply chain financing arrangements, patent cross-licensing, and blockchain-based …

Little Power Struggles Everywhere: Attacks On The Administrative State At The Securities And Exchange Commission, Roberta S. Karmel

Faculty Scholarship

No abstract provided.

Uk & Ksa Vats: A Cutting-Edge Proposal – Mini-Blockchain And Vatcoin, Richard Thompson Ainsworth, Musaad Alwohaibi, Mike Cheetham

Faculty Scholarship

This paper develops, extends, and clarifies themes introduced in five prior papers dealing with blockchain, and VATCoin in the context of both (a) the new VATs in the Gulf Cooperation Council (GCC), and (b) the mature VATs in the EU. Five additional papers on VAT technology advances in Fiji, with blockchain and VATCoin applications to New Zealand’s approach to online sales platforms (the Netlix Tax) are similarly referenced and extended. The GCC VAT papers were exploratory. For the most part, they were composed before any GCC jurisdiction had implemented a VAT, and in three instances even before the GCC Framework …

Delaware's New Competition, William J. Moon

Northwestern University Law Review

According to the standard account in American corporate law, states compete to supply corporate law to American corporations, with Delaware dominating the market. This “competition” metaphor in turn informs some of the most important policy debates in American corporate law.

This Article complicates the standard account, introducing foreign nations as emerging lawmakers that compete with American states in the increasingly globalized market for corporate law. In recent decades, entrepreneurial foreign nations in offshore islands have used permissive corporate governance rules and specialized business courts to attract publicly traded American corporations. Aided in part by a select group of private sector …

Corporate Law And The Myth Of Efficient Market Control, William Wilson Bratton, Simone M. Sepe

Articles

In recent times, there has been an unprecedented shift in power from managers to shareholders, a shift that realizes the long-held theoretical aspiration of market control of the corporation. This Article subjects the market control paradigm to comprehensive economic examination and finds it wanting.

The market control paradigm relies on a narrow economic model that focuses on one problem only: management agency costs. With the rise of shareholder power, we need a wider lens that also takes in market prices, investor incentives, and information asymmetries. General equilibrium (GE) theory provides that lens. Several lessons follow from reference to this higher-order …

Cryptocommunity Currencies, J. S. Nelson

Cornell Law Review

What are cryptocurrencies: securities, commodities, or something else? Maybe they are a new form of established currency-a non-sovereign fiat currency. Like other self-governing bodies, the communities that issue cryptocurrencies should be judged on how well they support their currencies. This analysis is not meaningfully different from how we have evaluated traditional sovereign issuers of currency. Indeed, as traditional-sovereign-issued currency becomes entirely digital, functional distinctions between traditionally sovereign-backed flat currency and widely accepted non-sovereign fat currency start to disappear. The primary way then to distinguish the value of such currencies from each other becomes the quality of their institutional backing. Through …

Remutualization, Erik F. Gerding

Cornell Law Review

This Article explores how returning to common law or traditional approaches to financial institution governance can inform and improve a range of financial reforms. In particular, this Article seeks to revive the use of organizational form as a tool of financial regulation. Very old varietals, including partnerships and mutual companies, decanted in new bottles can promote financial stability, lower incentives for excessive risk-taking by financial intermediaries, provide mechanisms to police their market conduct, and better align their incentives with the interests of their customers and consumers.

Horizontal Directors, Yaron Nili

Northwestern University Law Review

Directors wield increasing influence in corporate America, making pivotal decisions regarding corporate affairs and management. A robust literature recognizes directors’ important role and examines their incentives and performance. In particular, scholars have worried that “busy directors”—those who serve on multiple corporate boards—may face time constraints that affect their performance. Little attention, however, has been paid to directors who sit on the boards of multiple companies within the same industry. This Article terms them “horizontal directors” and spotlights, for the first time, the legal and policy issues they raise. The “horizontal” feature of directorships, a term often used in the antitrust …

The Effects Of Shareholder Primacy, Publicness, And "Privateness" On Corporate Cultures, Donald C. Langevoort

Seattle University Law Review

My conundrum question is this: suppose managerialism triumphed in the governance wars so as to regain its desired level of autonomy from shareholder pressures for boards and managers—would we then expect to see a cultural shift inside corporations toward greater honesty and civil engagement, and if so, why? A helpful diagnostic question is to ask how managers currently construe shareholder and market primacy. Have they internalized it as a value or do they instead resent the demands? My argument here leans more toward resentment, though my contribution is more about how to develop a credible hypothesis than how to prove …

Unsubstantiated Allegations And Organizational Culture, Eugene Soltes

Seattle University Law Review

When organizations investigate allegations of misconduct, they routinely determine that some allegations are unsubstantiated. A variety of factors may contribute to the conclusion that an allegation does not warrant substantiation, including a lack of supporting evidence, false claims against others within the organization, and a failure to conduct a thorough inquiry. This Article examines the potential value of examining unsubstantiated allegations of misconduct to better understand an organization’s culture. I show that unsubstantiated allegations provide insight into where future violations may occur, employees’ proclivity to engage in subsequent violations, and firm productivity. I conclude by discussing ways that organizations can …

The Role Of The Board Of Financial Services Firms In Improving Their Firm's Culture, Ciaran Walker

Seattle University Law Review

In this Article, we look at the role the board is expected to play under regulatory requirements and guidance; we then look specifically at the failings of boards in a number of the recent “scandals.” Finally, we offer a number of suggestions on ways in which the board can have a more effective role in improving firms’ culture. In this latter regard, we specifically focus on industry (rather than firm-specific) initiatives that could enable the board to have a more effective role, particularly in light of the setting up of the industry-funded Banking Standards Board in the U.K. and the …

The Problem With Predators, June Carbone, William K. Black

Seattle University Law Review

Both corporate theory and sex discrimination law start with presumptions that CEOs seek to advance legitimate ends and design the internal organization of business enterprises to achieve such ends. Yet, a growing literature questions why CEOs and boards of directors nonetheless select for Machiavellianism, narcissism, psychopathy, and toxic masculinity, despite the downsides associated with these traits. Three scholarly literatures—economics, criminology, and gender theory—draw on advances in psychology to shed new light on the construction of seemingly dysfunctional corporate cultures. They start by questioning the assumption that CEOs—even CEOs of seemingly mainstream businesses—necessarily seek to advance “legitimate” ends. Instead, they suggest …

Why Do Good People Do Bad Things? A Multi-Level Analysis Of Individual, Organizational, And Structural Causes Of White-Collar Crime, Dr. Joe Mcgrath

Seattle University Law Review

This Article draws on the Securities and Exchange Commission’s (SEC) complaint against Serageldin, the transcript for his plea hearing, and the transcript for his sentencing hearing. The SEC’s complaint provides a prosecutorial account of the fraud. It also includes actual extracts from Serageldin’s recorded phone calls at Credit Suisse which provide a realtime narrative of the fraud. The court transcripts detail Serageldin’s own account of the fraud and give a biographical account of Serageldin’s life, provided by his mother, who offered character evidence on his behalf. These perspectives allowed for the recasting of the SEC’s account of the fraud and …

In The Name Of Shareholder Value: Origin Myths Of Corporations And Their Ongoing Implications, Karen Ho

Seattle University Law Review

Part I of this Article analyzes some of the contemporary critiques of, and debates around, shareholder value in order to illustrate why many of these contestations demonstrate underlying gaps or problematic assertions in the history and politics of shareholder value, especially if they are delimited by the narrow legal frames and neoliberal assumptions of corporations. It also provides the context necessary to explicate and ground why shareholder primacy and ownership assumptions are historically and legally flawed, and how financial values and assumptions continue to be championed (and financial power elided), despite the recent implosions of shareholder value. Part II expands …