Securities Law Commons^™

The Role Of The Market Model In Corporate Law Analysis: A Comment On Weiss And White, Merritt B. Fox

Faculty Scholarship

In a recent article, Elliott Weiss and Lawrence J. White sought to establish that seven decisions of the Delaware courts concerning corporation law had little value in predicting the future conduct of courts and corporations under the Delaware Corporations Law. Weiss and White relied, in part, on a statistical analysis of changes in the prices of publicly traded shares in Delaware corporations to show that the seven studied decisions had no statistically significant market impact.

In this Comment, Professor Fox takes issue with the explanation Weiss and White give for their data. Although the absence of an observed market impact …

Hush: The Criminal Status Of Confidential Information After Mcnally And Carpenter And The Enduring Problem Of Overcriminalization, John C. Coffee Jr.

Faculty Scholarship

Each of the last three decades has witnessed an intense public reaction to a distinctive type of "white collar" crime. In the early 1960's, public attention was riveted by the Electrical Equipment conspiracy and the image of senior corporate executives of major firms meeting clandestinely to fix prices. In the mid-1970's, the focus shifted to corporate bribery, as the media ran daily stories regarding questionable payments abroad and illegal political contributions at home. The representative white collar crime of the 1980's is undoubtedly "insider trading." The archetype of this new kind of criminal in the public's mind is Ivan Boesky …

Corporate Takeovers: Who Wins; Who Loses; Who Should Regulate, John C. Coffee Jr., Joseph A. Grundfest, Roberta Romano, Murray L. Weidenbaum

Faculty Scholarship

On December 3, 1987, during its 11th Annual Policy Conference in Washington, DC, the American Enterprise Institute convened a panel discussion on "Corporate Takeovers and Insider Trading: Who Should Regulate?" The panelists were John C. Coffee, Jr., professor of law at Columbia University; Joseph A. Grundfest, commissioner at the Securities and Exchange Commission; Roberta Romano, professor of law at Yale Law School; and Murray L. Weidenbaum, Mallinckrodt Distinguished University Professor and director of the Center for the Study of American Business at Washington University. The panel was moderated by Christopher C. DeMuth, president of AEI. The following discussion is drawn …

Ties That Bond: Duel Class Common Stock And The Problem Of Shareholder Choice, Jeffrey N. Gordon

Faculty Scholarship

Professor Gordon argues that the Securities and Exchange Commission (SEC) should adopt a rule enabling the New York Stock Exchange (NYSE) to maintain its traditional rule forbidding NYSE firms from recapitalizing with dual class common stock After critically evaluating the purported justifications for dual class recapitalizations, Professor Gordon presents empirical data to demonstrate that such recapitalizations may have a negative impact on shareholder wealth. He then describes the collective action and strategic choice problems in shareholder voting that allow managers to win approval for such wealth-reducing recapitalizations. The traditional NYSE rule is a means by which shareholders and managers have …

Accountable Accountants: Is Third-Party Liability Necessary?, Victor P. Goldberg

Faculty Scholarship

Should accountants be liable to third parties if they conduct an audit in negligent manner? A half century ago, in Ultramares Corporation v. Touche, Niven & Co., Cardozo argued that they should not, unless their performance could be characterized as fraud. In recent years, courts in a minority of jurisdictions have concluded that Cardozo's argument is no longer compelling and they have found that "foreseeable" third parties could bring a tort action for ordinary negligence against the accountants. In addition to being subject to tort actions, accountants may also be liable under federal and state securities laws.

Suits against …

Drafting An Effective Greenmail Prohibition, Ronald J. Gilson

Faculty Scholarship

Hostile tender offers have become a recurrent political issue. In recent years Congress has held seemingly endless hearings on the subject, and by now the testimony has settled into a familiar dialogue. Potential acquirers cast themselves as the embodiment of Adam Smith's invisible hand – their activities energize the market for corporate control with the desirable result of improving the efficiency of corporate management. Management of potential targets, in turn, claim the role of Albert Chandler's visible hand – efficient managers who internalize a function previously carried out by an inefficient market. Their argument is that because the market for …