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Articles 1 - 13 of 13
Full-Text Articles in Securities Law
M-U-N-I: Evidencing The Inadequacies Of The Municipal Securities Regulatory Framework, John Carriel
M-U-N-I: Evidencing The Inadequacies Of The Municipal Securities Regulatory Framework, John Carriel
The Business, Entrepreneurship & Tax Law Review
This article argues that the current regulation of the minicipal securities market is inadequate, and that regulatory reform is not only necessary but also permissible as the Securities and Exchange Commission has the legal authority under the current statutory framework to substantially remedy such inadequacy. In making this argument, this article focuses on the legislative history of the Securities Reform Act of 1975, analyses of statutory text, the current regulatory framework surrounding the municipal securities market, prior attempts to effect regulatory reform, and one of the principal issues with the current regulatory framework - the lack of uniform accounting principles …
The Historical Basis Of Securities Arbitration As An Investor Protection Mechanism Symposium, Jill Gross
The Historical Basis Of Securities Arbitration As An Investor Protection Mechanism Symposium, Jill Gross
Journal of Dispute Resolution
This article describes a history of securities arbitration, and uncovers the original purpose of designating arbitration to resolve investor disputes. This article argues that both investors and the industry have disregarded this underlying purpose, causing them to view securities arbitration through a distrusting, critical lens. Rather than cynically viewing securities arbitration as a forum created by and favoring industry players, investors should view arbitration as a central and critical component in a system of investor protection. Likewise, rather than promoting mandatory arbitration as desirable because of its speed and economies, broker-dealers and SIFMA should advertise the investor-protective benefits of the …
Overvalued Equity And The Case For An Asymmetric Insider Trading Regime, Thom Lambert
Overvalued Equity And The Case For An Asymmetric Insider Trading Regime, Thom Lambert
Faculty Publications
This article argues for an asymmetric insider trading policy under which insider trading that decreases the price of an overvalued stock is generally permitted, but insider trading that increases the price of an undervalued stock is generally prohibited. Concluding that the net investor benefits of price-decreasing insider trading exceed those of price-enhancing insider trading, the article argues that an asymmetric insider trading regime likely represents the bargain that shareholders and corporate managers would strike if they were legally and practically able to negotiate an insider trading policy. Current insider trading doctrine would permit regulators to impose such an asymmetric insider …
Nasd Regulation Of Ipo Conflicts Of Interest - Does Gatekeeping Work?, Royce De R. Barondes
Nasd Regulation Of Ipo Conflicts Of Interest - Does Gatekeeping Work?, Royce De R. Barondes
Faculty Publications
This Article contributes to the debate on the efficacy of third party gatekeeping in regulating the capital markets, by presenting empirical evidence of the efficacy of one kind of gatekeeper, a qualified independent underwriter (QIU). Under NASD rules, when an investment bank participating in a securities offering has one of several enumerated conflicts of interest, the securities cannot be sold at a price higher than that recommended by a QIU. Examining 1,188 IPOs from 1997 through 2000 discloses a negative, statistically significant relationship between IPO initial returns and each of (i) the fact that participating NASD members (or their affiliates) …
Correcting The Empirical Foundations Of Ipo-Pricing Regulation, Royce De R. Barondes
Correcting The Empirical Foundations Of Ipo-Pricing Regulation, Royce De R. Barondes
Faculty Publications
Recent events are replete with stories of fraudulent or opportunistic behavior in the initial public offering (IPO) process - behavior that extended to the highest-reputation investment banks. Curiously, notwithstanding this evidence, recent financial economics literature asserts investment bank conflicts of interest certify IPO issuers. This Article develops new empirical evidence that casts doubt on this certification hypothesis by examining the pre-IPO price adjustment of IPOs involving qualified independent underwriters (QIUs), particularly IPOs in which more than ten percent of the net proceeds are being directed to participating investment banks (e.g., to repay a prior extension of credit). These offerings have …
Avoiding Regulatory Mismatch In The Workplace: An Informational Approach To Workplace Safety Regulation, Thom Lambert
Avoiding Regulatory Mismatch In The Workplace: An Informational Approach To Workplace Safety Regulation, Thom Lambert
Faculty Publications
The purpose of this article is to do just that. As it turns out, there is fertile middle ground between the pure libertarian “do nothing” approach and the paternalistic command-and-control approach OSHA tends to favor. Even the middle ground “information-provision” approach a number of theorists have advocated (in imprecise terms) could be implemented several different ways, some of which would be more effective than others. It is therefore possible to make some systematic policy prescriptions that may aid regulators attempting to avoid regulatory mismatch.In the course of exploring the range of regulatory options, this article attempts to make several contributions …
Professionalism Consequences Of Law Firm Investments In Clients: An Empirical Assessment, Royce De R. Barondes
Professionalism Consequences Of Law Firm Investments In Clients: An Empirical Assessment, Royce De R. Barondes
Faculty Publications
This article examines two principal hypotheses: Hypothesis 1: Law firm investments in clients diminish the extent to which those law firms require issuers to disclose adverse information in IPO prospectuses. Hypothesis 2: Those law firms that are willing to invest in their clients are generally less aggressive in requiring their clients, in their IPOs, to disclose adverse information in their IPO prospectuses.
Adequacy Of Disclosure Of Restrictions On Flipping Ipo Securities, Royce De R. Barondes
Adequacy Of Disclosure Of Restrictions On Flipping Ipo Securities, Royce De R. Barondes
Faculty Publications
This Article examines the implications of this practice under the disclosure obligations imposed by federal securities laws and concludes that the current disclosure is materially misleading, particularly in light of the failure to disclose the selective application of the penalties. Moreover, the selective application of the penalties casts significant doubt on whether these offerings can be considered “fixed price” offerings, which would mean that cursory disclosure of the practice would not suffice.
The Insider Story, Richard C. Reuben
The Insider Story, Richard C. Reuben
Faculty Publications
The central issue in United States v. O'Hagan, No. 96-842, is the validity of the so-called "misappropriation theory" of insider trader liability under Section 10(b) of the Securities and Exchange Act of 1934. 15 US.C. 78(j)(b). The justices heard oral arguments in April. If the theory propounded by federal regulators is endorsed by the Court, it would expand insider trader liability under U.S. law.
Dynamic Economic Analyses Of Selected Provisions Of Corporate Law: The Absolute Delegation Rule, Disclosure Of Intermediate Estimates And Ipo Pricing, Royce De R. Barondes
Dynamic Economic Analyses Of Selected Provisions Of Corporate Law: The Absolute Delegation Rule, Disclosure Of Intermediate Estimates And Ipo Pricing, Royce De R. Barondes
Faculty Publications
This Article examines three separate aspects of the relationships between corporations and their securityholders from a dynamic economic perspective: (i) the feasibility of permitting shareholders to participate in the management of their corporations through the exercise of voting rights, (ii) Rule 3b-6, the safe harbor for projections (the Safe Harbor)8 under the Securities Exchange Act of 1934 (the 1934 Act),9 and (iii) the extraordinary returns available from investing in initial public offerings (IPO's). Three particular dynamic aspects are implicated in these situations.
The Bespeaks Caution Doctrine: Revisiting The Application Of Federal Securities Law To Opinions And Estimates, Royce De R. Barondes
The Bespeaks Caution Doctrine: Revisiting The Application Of Federal Securities Law To Opinions And Estimates, Royce De R. Barondes
Faculty Publications
Disclosure of estimates and opinions, which are often referred to as ‘soft information,‘ has presented a number of difficult issues to courts, the Securities and Exchange Commission (SEC) and companies issuing offering materials or required to file periodic reports with the SEC. Although this type of information often consists of projections, historical financial statements also include this type of information to varying degrees. For example, a bank's statement of financial position requires specification of loan loss reserves and is therefore dependent on an assessment of future events (the timing and extent of repayment). Similarly, determination of the timing of a …
An Economic Analysis Of The Potential For Coercion In Consent Solicitations For Bonds, Royce De R. Barondes
An Economic Analysis Of The Potential For Coercion In Consent Solicitations For Bonds, Royce De R. Barondes
Faculty Publications
This Article examines why issuers frequently cannot present bondholders with an offer that draws on collective action problems to force the acceptance of the offer by the bondholders. The analysis is restricted to publicly offered bonds. For a number of reasons, privately placed debt presents fewer opportunities for coercion. A prior business relationship among various purchasers, which facilitates cooperation, may be more likely with respect to privately placed debt. Privately placed debt often has more significant protection for the bondholders than public debt with the same level of seniority
The Scope Of Liability Under Section 12 Of The Federal Securities Act Of 1933: 'Participation' And The Pertinent Legislative Materials, Douglas E. Abrams
The Scope Of Liability Under Section 12 Of The Federal Securities Act Of 1933: 'Participation' And The Pertinent Legislative Materials, Douglas E. Abrams
Faculty Publications
Section 12 of the Securities Act of 1933 creates two private rights of action, each providing in relevant part that ‘ a ny person who offers or sells a security . . . shall be liable to the person purchasing such security from him . . ..’ Because suit may be maintained only by the person who purchases the security from defendant, an offeror may incur section 12 liability only if the offeror also ‘sells' the security to the plaintiff. Section 12(1) imposes liability on any seller whose offer or sale violates the Act's registration or prospectus requirements found in …