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Articles 1 - 30 of 168

Full-Text Articles in Securities Law

Table Of Contents, Seattle University Law Review Sep 2019

Table Of Contents, Seattle University Law Review

Seattle University Law Review

No abstract provided.


Table Of Contents, Seattle University Law Review Feb 2019

Table Of Contents, Seattle University Law Review

Seattle University Law Review

No abstract provided.


The Myth Of Morrison: Securities Fraud Litigation Against Foreign Issuers, Robert Bartlett, Matthew D. Cain, Jill E. Fisch, Steven Davidoff Solomon Jan 2019

The Myth Of Morrison: Securities Fraud Litigation Against Foreign Issuers, Robert Bartlett, Matthew D. Cain, Jill E. Fisch, Steven Davidoff Solomon

Faculty Scholarship at Penn Law

Using a sample of 388 securities fraud lawsuits filed between 2002 and 2017 against foreign issuers, we examine the effect of the Supreme Court’s decision in Morrison v. National Australia Bank. We find that the description of Morrison as a “steamroller” substantially ending litigation against foreign issuers is a myth. Instead, we find that Morrison did not substantially change the type of litigation brought against foreign issuers, which both before and after Morrison focused on foreign issuers with a U.S. listing and substantial U.S. trading volume. While dismissal rates rose post-Morrison we find no evidence that ...


Unintended Consequences, Loopholes, And Gibberish: Why There Are Still Securities Act Class Actions In State Courts, Brian Elzweig Jan 2019

Unintended Consequences, Loopholes, And Gibberish: Why There Are Still Securities Act Class Actions In State Courts, Brian Elzweig

Texas A&M Law Review

This Article examines Congress’s decades-long attempt to ensure that securities class action lawsuits of national importance are litigated in federal courts. The intent is limiting strike suits. Congress attempted to curtail strike suits through the enactment of the Private Securities Litigation Reform Act (“PSLRA”). The PSLRA required heightened pleading requirements to ensure the validity of federal securities class actions. Instead of solving the dilemma, plaintiffs circumvented the PSLRA by bringing fraud cases as state law claims. To combat the circumvention of the PSLRA, Congress enacted the Securities Litigation Uniform Standards Act (“SLUSA”). SLUSA federally preempted state law claims based ...


Mootness Fees, Matthew D. Cain, Jill E. Fisch, Steven Davidoff Solomon, Randall Thomas Jan 2019

Mootness Fees, Matthew D. Cain, Jill E. Fisch, Steven Davidoff Solomon, Randall Thomas

Faculty Scholarship at Penn Law

In response to a sharp increase in litigation challenging mergers, the Delaware Chancery Court issued the 2016 Trulia decision, which substantively reduced the attractiveness of Delaware as a forum for these suits. In this Article, we empirically assess the response of plaintiffs’ attorneys to these developments. Specifically, we document a troubling trend—the flight of merger litigation to federal court where these cases are overwhelmingly resolved through voluntary dismissals that provide no benefit to the plaintiff class but generate a payment to plaintiffs’ counsel in the form of a mootness fee. In 2018, for example, 77% of deals with litigation ...


Global Settlements: Promise And Peril, John C. Coffee Jr. Jan 2019

Global Settlements: Promise And Peril, John C. Coffee Jr.

Faculty Scholarship

In 2010, Morrison v. National Australia Bank Ltd. destabilized the world of securities litigation by denying those who purchased their securities outside the U.S. the ability to sue in the U.S. (as they had previously often done). Nature, however abhors a vacuum, and practitioners and other jurisdictions began to seek ways to regain access to U.S. courts. Several techniques have emerged: (1) expanding settlement classes so that they are broader than litigation classes and treating the location of the transaction as strictly a merits issue that defendants could waive; (2) adopting U.S. law as applicable to ...


Class Actions, Statutes Of Limitations And Repose, And Federal Common Law, Stephen B. Burbank, Tobias Barrington Wolff Dec 2018

Class Actions, Statutes Of Limitations And Repose, And Federal Common Law, Stephen B. Burbank, Tobias Barrington Wolff

Faculty Scholarship at Penn Law

After more than three decades during which it gave the issue scant attention, the Supreme Court has again made the American Pipe doctrine an active part of its docket. American Pipe addresses the tolling of statutes of limitations in federal class action litigation. When plaintiffs file a putative class action in federal court and class certification is denied, absent members of the putative class may wish to pursue their claims in some kind of further proceeding. If the statute of limitations would otherwise have expired while the class certification issue was being resolved, these claimants may need the benefit of ...


Badges Of Opportunism: Principles For Policing Restructuring Support Agreements, Edward J. Janger, Adam J. Levitin Oct 2018

Badges Of Opportunism: Principles For Policing Restructuring Support Agreements, Edward J. Janger, Adam J. Levitin

Brooklyn Journal of Corporate, Financial & Commercial Law

Bankruptcy is a market for corporate control. Current bankruptcy practice offers two alternative mechanisms for effectuating changes in control of a firm: (1) a pre-plan all-asset sale under section 363(b) of the Bankruptcy Code; or (2) an asset sale or recapitalization pursuant to a plan of reorganization under section 1129 of the Code. Pre-plan sales under section 363(b) are fast, but lack the procedural protections associated with a restructuring or sale pursuant to a plan. Plan confirmation can be costly and uncertain, however. Restructuring support agreements (“RSAs”)—contractual agreements to support a future restructuring that has certain agreed-upon ...


Corporate Distress, Credit Default Swaps, And Defaults: Information And Traditional, Contingent, And Empty Creditors, Henry T. C. Hu Oct 2018

Corporate Distress, Credit Default Swaps, And Defaults: Information And Traditional, Contingent, And Empty Creditors, Henry T. C. Hu

Brooklyn Journal of Corporate, Financial & Commercial Law

Federal securities law seeks to ensure the quality and quantity of information that corporations make publicly available. Informational asymmetries associated with companies in financial distress, but not in bankruptcy, have received little attention. This Article explores some important asymmetries in this context that are curious in their origin, nature, and impact. The asymmetries are especially curious because of the impact of a world with credit default swaps (CDS) and CDS-driven debt “decoupling.” The Article explores two categories of asymmetries. The first relates to information on the company itself. Here, the Article suggests there is fresh evidence for the belief that ...


The Market For Corporate Control In The Zone Of Insolvency: Symposium Introduction, Edward J. Janger Oct 2018

The Market For Corporate Control In The Zone Of Insolvency: Symposium Introduction, Edward J. Janger

Brooklyn Journal of Corporate, Financial & Commercial Law

No abstract provided.


China's Anti-Corruption Crackdown And The Foreign Corrupt Practices Act, Daniel C.K. Chow May 2018

China's Anti-Corruption Crackdown And The Foreign Corrupt Practices Act, Daniel C.K. Chow

Texas A&M Law Review

China’s highly publicized crackdown on corruption may affect the type and number of cases in China that arise under the Foreign Corrupt Practices Act (“FCPA”), but it should not be assumed that the crackdown will necessarily lead to fewer FCPA prosecutions. Although there is some overlap of the goals of China’s corruption crackdown and the goals of the FCPA, China’s crackdown also serves important goals of the ruling Communist Party. The main goal of the current crackdown is to reinforce the Party’s power by targeting enemies and rivals of the current leadership. The crackdown is not ...


The Logic And Limits Of Event Studies In Securities Fraud Litigation, Jill E. Fisch, Jonah B. Gelbach, Jonathan Klick Jan 2018

The Logic And Limits Of Event Studies In Securities Fraud Litigation, Jill E. Fisch, Jonah B. Gelbach, Jonathan Klick

Faculty Scholarship at Penn Law

Event studies have become increasingly important in securities fraud litigation after the Supreme Court’s decision in Halliburton II. Litigants have used event study methodology, which empirically analyzes the relationship between the disclosure of corporate information and the issuer’s stock price, to provide evidence in the evaluation of key elements of federal securities fraud, including materiality, reliance, causation, and damages. As the use of event studies grows and they increasingly serve a gatekeeping function in determining whether litigation will proceed beyond a preliminary stage, it will be critical for courts to use them correctly.

This Article explores an array ...


Piling On? An Empirical Study Of Parallel Derivative Suits, Stephen J. Choi, Jessica Erickson, Adam C. Pritchard Nov 2017

Piling On? An Empirical Study Of Parallel Derivative Suits, Stephen J. Choi, Jessica Erickson, Adam C. Pritchard

Articles

Using a sample of all companies named as defendants in securities class actions between July 1, 2005 and December 31, 2008, we study parallel suits relying on state corporate law arising out of the same allegations as the securities class actions. We test several ways that parallel suits may add value to a securities class action. Most parallel suits target cases involving obvious indicia of wrongdoing. Moreover, we find that although a modest percentage of parallel suits are filed first, over 80 percent are filed after a securities class action (termed “follow-on” parallel suits). We find that parallel suits and ...


Reviving Reliance, Ann M. Lipton Oct 2017

Reviving Reliance, Ann M. Lipton

Fordham Law Review

This Article explores the misalignment between the disclosure requirements of the federal securities laws and the private causes of action available to investors to enforce those requirements. Historically, federally mandated disclosures were designed to allow investors to set an appropriate price for publicly traded securities. Today’s disclosures, however, also enable stockholders to participate in corporate governance and act as a check on managerial misbehavior. To enforce these requirements, investors’ chief option is a claim under the general antifraud statute, section 10(b) of the Securities Exchange Act of 1934. But courts are deeply suspicious of investors’ attempts to use ...


Lead Plaintiffs And Their Lawyers: Mission Accomplished, Or More To Be Done?, Adam C. Pritchard, Stephen Choi May 2017

Lead Plaintiffs And Their Lawyers: Mission Accomplished, Or More To Be Done?, Adam C. Pritchard, Stephen Choi

Law & Economics Working Papers

This chapter, written for the Research Handbook on Shareholder Litigation, surveys empirical work studying the lead plaintiff provision of the Private Securities Litigation Reform Act (PSLRA). That work finds that the lead plaintiff provision has encouraged institutional investors to participate in securities class actions and that those institutional investors have negotiated lower attorneys' fees. Those benefits from the lead plaintiff provision are undercut, however, by political contributions made by plaintiffs' lawyers. We suggest additional reforms to promote transparency and competition among lawyers for lead plaintiffs. We also suggest reforms to the lead plaintiff provision intended to enhance the screening effect ...


Corporate Purpose And Litigation Risk In Publicly Held U.S. Benefit Corporations, Joan Macleod Heminway Apr 2017

Corporate Purpose And Litigation Risk In Publicly Held U.S. Benefit Corporations, Joan Macleod Heminway

Seattle University Law Review

With the likely prospect of publicly held U.S. benefit corporations in mind, this Article engages in a thought experiment. Specifically, the Article views the publicly held U.S. benefit corporation from the perspective of litigation risk. It first situates, in Part I, the U.S. benefit corporation in its structural and governance context as an incorporated business association. Corporate purpose and the attendant managerial authority, responsibilities, and fiduciary duties are the key points of reference. Then, in Part II, the Article seeks to identify and describe the salient, unique litigation risks that may be associated with publicly held corporations ...


American Pipe Tolling, Statutes Of Repose, And Protective Filings: An Empirical Study, David Freeman Engstrom, Jonah B. Gelbach Mar 2017

American Pipe Tolling, Statutes Of Repose, And Protective Filings: An Empirical Study, David Freeman Engstrom, Jonah B. Gelbach

Faculty Scholarship at Penn Law

This paper offers a conceptual and empirical analysis of a key issue that overhangs CalPERS v. ANZ Securities, soon to be decided by the Supreme Court. In particular, the paper offers an empirical estimate of the plausible quantity of wasteful protective filings that putative class members might make if the Court were to hold that American Pipe tolling does not apply to statutes of repose in the federal securities laws.


A Bridge Too Far: A Critical Analysis Of The Securities And Exchange Commission's Approach To Equity Market Regulation, John Polise Jan 2017

A Bridge Too Far: A Critical Analysis Of The Securities And Exchange Commission's Approach To Equity Market Regulation, John Polise

Brooklyn Journal of Corporate, Financial & Commercial Law

Using the framework articulated by Thomas S. Kuhn in his book, The Structure of Scientific Revolutions, this Article traces the evolution of equity market regulation in terms of its epistemological foundations and operative paradigms. It examines the SEC’s growth from a more passive partner with the securities industry to being an aggressive and perhaps overly intrusive arbiter of equity market operations. This Article identifies two distinct paradigms of securities regulation—the “Self-Regulatory Paradigm” and the “Micro-Intervention Paradigm.” The Self-Regulatory Paradigm and the Micro-Intervention Paradigm are not compatible, and this Article explains how the intellectual dissonance between them ultimately allowed ...


From Systemic Risk To Financial Scandals: The Shortcomings Of U.S. Hedge Fund Regulation, Marco Bodellini Jan 2017

From Systemic Risk To Financial Scandals: The Shortcomings Of U.S. Hedge Fund Regulation, Marco Bodellini

Brooklyn Journal of Corporate, Financial & Commercial Law

In the recent past, hedge funds have demonstrated that they can pose and spread systemic risk across the financial markets, and that their managers can use them to commit fraud and misappropriation of fund assets. Even if the first issue now seems to be considered a serious one by the U.S. legislature, which in 2010, as a legislative response to the global financial crisis of 2007-2008, enacted the Dodd-Frank Act Wall Street Reform and Consumer Protection Act (Dodd-Frank), the current regulation still appears inconsistent and inappropriate to prevent and face it. By contrast, the second issue is not always ...


An Exception To The Derivative Rule: Allowing Mutual Fund Investors To Bring Suits Directly, Jamie D. Kurtz Jan 2017

An Exception To The Derivative Rule: Allowing Mutual Fund Investors To Bring Suits Directly, Jamie D. Kurtz

Brooklyn Law Review

Mutual funds differ greatly from traditional corporations in the way they are formed and operated. Despite these differences, courts apply the same rules for derivative shareholder litigation to both types of entities. While these rules make sense and were mostly created with corporations in mind, courts have generally been unwilling to consider mutual funds’ unique characteristics in determining whether to allow direct litigation from shareholders. This note explores those unique characteristics and the usual policy reasons for requiring derivative litigation. It concludes that in most cases these unique characteristics make a derivative suit nearly impossible to sustain. Further, the normal ...


Restructuring Sovereign Debt After Nml V. Argentina, Lee C. Buchheit, G. Mitu Gulati Jan 2017

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 ...


Mandatory Third Party Compliance Examinations For Investment Advisers: An Sec Waterloo?, Mercer Bullard Dec 2016

Mandatory Third Party Compliance Examinations For Investment Advisers: An Sec Waterloo?, Mercer Bullard

Brooklyn Journal of Corporate, Financial & Commercial Law

The Securities and Exchange Commission (SEC or Commission) appears to be on the verge of requiring investment advisers to undergo third party examinations. One justification for the rulemaking is that the Commission lacks sufficient resources to examine advisers frequently enough. Another is to create indirectly a self-regulatory organization (SRO) for investments advisers. Both may leave a rulemaking particularly vulnerable to challenge as arbitrary and capricious under the Administrative Procedures Act. This Article considers three novel grounds on which a rulemaking may be successfully challenged. Congress has repeatedly rejected SEC requests to provide additional funding for examinations or to create an ...


The Choice Is (Not) Yours: Why The Sec Must Further Amend Its Rules Of Practice To Increase Fairness In Administrative Proceedings, Madeline Ilibassi Dec 2016

The Choice Is (Not) Yours: Why The Sec Must Further Amend Its Rules Of Practice To Increase Fairness In Administrative Proceedings, Madeline Ilibassi

Brooklyn Journal of Corporate, Financial & Commercial Law

The Securities and Exchange Commission (SEC) plays an extremely important role within the securities industry—it oversees the financial markets, protects consumers, and maintains market efficiency. One of the most important (and recently one of most criticized) responsibilities of the SEC is its duty to enforce the securities laws and punish violators. During the past two decades, and especially after the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010, the SEC’s Division of Enforcement has grown substantially and has utilized administrative enforcement proceedings at an increasing rate. However; this utilization has been occurring without ...


Newsroom: Ap: Chung On 38 Studios Settlement 03-14-2016, Michelle R. Smith, Roger Williams University School Of Law Mar 2016

Newsroom: Ap: Chung On 38 Studios Settlement 03-14-2016, Michelle R. Smith, Roger Williams University School Of Law

Life of the Law School (1993- )

No abstract provided.


Like Moths To A Flame - International Securities Litigation After Morrison: Correcting The Supreme Court's Transactional Test, Marco Ventoruzzo Mar 2016

Like Moths To A Flame - International Securities Litigation After Morrison: Correcting The Supreme Court's Transactional Test, Marco Ventoruzzo

Marco Ventoruzzo

Because of the broad jurisdiction American courts have asserted in cases arising under the Securities Exchange Act of 1934, they have been called a Shangri-la for “foreign-cubed” class actions with little connection to the United States. Over the past forty years, the standards used by American courts to determine their jurisdiction in international securities disputes have evolved, culminating in the U.S. Supreme Court’s Morrison decision of 2010. The new transactional test promulgated in Morrison replaced all of its predecessor tests, from a test measuring whether the conduct in question took place in the United States to a test ...


Rebutting The Fraud On The Market Presumption In Securities Fraud Class Actions: Halliburton Ii Opens The Door, Victor E. Schwartz, Christopher E. Appel Feb 2016

Rebutting The Fraud On The Market Presumption In Securities Fraud Class Actions: Halliburton Ii Opens The Door, Victor E. Schwartz, Christopher E. Appel

Michigan Business & Entrepreneurial Law Review

In Halliburton Co. v. Erica P. John Fund, Inc. (Halliburton II), the United States Supreme Court reaffirmed the validity of the “fraud on the market” presumption underlying securities fraud class action litigation. This presumption is vital to bringing suits as class actions because it excuses plaintiffs from proving individual reliance on an alleged corporate misstatement on the theory that any public statements made by the company are incorporated into its stock price and consequently relied upon by all investors. Thus, the Court’s decision to uphold the validity of the presumption has been hailed as a significant victory for those ...


The Sixth Pillar Of Anti-Money Laundering Compliance: Balancing Effective Enforcement With Financial Privacy, Maria A. De Dios Jan 2016

The Sixth Pillar Of Anti-Money Laundering Compliance: Balancing Effective Enforcement With Financial Privacy, Maria A. De Dios

Brooklyn Journal of Corporate, Financial & Commercial Law

The U.S. government has responded to the increase of financial crimes, including money laundering and terrorist financing, by requiring that financial institutions implement anti-money laundering compliance programs within their institutions. Most recently, the Financial Crimes Enforcement Network exercised its regulatory powers, as authorized by the Treasury Department, by proposing regulations that now explicitly add customer due diligence to the preexisting anti-money laundering regime. The policy behind the government’s legislative and regulatory measures is clear—financial institutions must ensure that they are protected from and not aiding in the illegal efforts of criminals. The complexity and insidiousness of these ...


The Customer's Nonwaivable Right To Choose Arbitration In The Securities Industry, Jill I. Gross Jan 2016

The Customer's Nonwaivable Right To Choose Arbitration In The Securities Industry, Jill I. Gross

Brooklyn Journal of Corporate, Financial & Commercial Law

Arbitration has been the predominant form of dispute resolution in the securities industry since the 1980s. Virtually all brokerage firms include predispute arbitration agreements (PDAAs) in their retail customer contracts, and have successfully fought off challenges to their validity. Additionally, the industry has long mandated that firms submit to arbitration at the demand of a customer, even in the absence of a PDAA.

More recently, however, brokerage firms have been arguing that forum selection clauses in their agreements with sophisticated customers (such as institutional investors and issuers) supersede firms’ duty to arbitrate under FINRA Rule 12200. Circuit courts currently are ...


A Cautionary Look At A Cautionary Doctrine, Andrew W. Fine Jan 2016

A Cautionary Look At A Cautionary Doctrine, Andrew W. Fine

Brooklyn Journal of Corporate, Financial & Commercial Law

Optimism is an indispensable element of effective salesmanship. It is therefore quite natural for the directors of public companies to want to optimistically tout the potential long-term benefits of investing in their companies. After all, directors of public companies must be empowered to attract the attention and money of American investors. But what happens if these long-term projections fail to come true? Who is to blame for long-term projections that are simply unrealistic? A doctrine called the “bespeaks caution” doctrine has emerged in order to govern these inquiries, and holds that these optimistic forward-looking statements are legally immunized provided that ...


Admit Or Deny: A Call For Reform Of The Sec's "Neither-Admit-Nor-Deny" Policy, Priyah Kaul Feb 2015

Admit Or Deny: A Call For Reform Of The Sec's "Neither-Admit-Nor-Deny" Policy, Priyah Kaul

University of Michigan Journal of Law Reform

For four decades, the SEC’s often-invoked policy of settling cases without requiring admissions of wrongdoing, referred to as the “neither-admit-nor-deny” policy, went unchallenged by the courts, the legislature, and the public. Then in 2011, a harshly critical opinion from Judge Jed Rakoff in SEC v. Citigroup incited demands for reform of this policy. In response to Judge Rakoff’s opinion, the SEC announced a modified approach to settlements. Under the modified approach, the Commission may require an admission of wrongdoing if a defendant’s misconduct was egregious or if the public markets would benefit from an admission. Many supporters ...