Securities Law Commons^™

An Inquiry Into The Perception Of Materiality As An Element Of Scienter Under Sec Rule 10b-5, Allan Horwich

Faculty Working Papers

In any private action or enforcement proceeding based on SEC Rule 10b-5 the plaintiff, including the Securities and Exchange Commission, must prove that the defendant engaged in deception or manipulation with scienter, that is, an intent to deceive (which lower courts have held encompasses reckless conduct). Where the gravamen of the claim is deception, the deception must have been material. A fact, including forward-looking information, is material if there is a substantial likelihood that a reasonable shareholder would consider the fact important in making his investment decision. This Article demonstrates that in an appropriate case an assessment of whether the …

Cleaning The Murky Safe Harbor For Forward-Looking Statements: An Inquiry Into Whether Actual Knowledge Of Falsity Precludes The Meaningful Cautionary Statement Defense, Allan Horwich

Faculty Working Papers

Congress included a safe harbor for forward-looking statements in the 1995 Private Securities Litigation Reform Act. This affords certain issuers and other specified persons limited protection from civil liability for damages under the Securities Act of 1933 and the Securities Exchange Act of 1934 when the projections or objectives in a forward-looking statement are not realized, i.e., turn out to be false. The safe harbor contains two principal elements, in addition to protection for "immaterial" statements: one prong where projections are accompanied by "meaningful cautionary statements," the second prong where the plaintiff fails to prove that the speaker made the …

Introduction: Insider Trading (Oxford University Press 3d Ed.), William K.S. Wang, Marc I. Steinberg

Faculty Journal Articles and Book Chapters

This paper is the introductory chapter to Insider Trading (Oxford University Press 3d ed. 2010). This treatise analyzes the application of various laws to stock market insider trading and tipping. Among the federal laws are Exchange Act section 10(b), SEC Rule 10b-5, mail/wire fraud, SEC Rule 14e-3, Exchange Act section 16, and Securities Act section 17(a). The state law discussed is both state common law and a state law claim by the issuer.

Another chapter addresses government enforcement of the insider trading/tipping prohibitions. A chapter on compliance programs deals with how firms can try to prevent illegal insider trading and …

A Perspective On Federal Corporation Law, Mark J. Loewenstein

Publications

No abstract provided.

Introduction: Insider Trading (Pli 2d Ed. 2006), Marc I. Steinberg, William K.S. Wang

Faculty Journal Articles and Book Chapters

This paper is the Introductory chapter to Insider Trading (PLI 2d ed. 2006). Insider Trading is a two-volume treatise that analyzes the application of various laws to stock market insider trading and tipping. Among the federal laws are Exchange Act section 10(b), SEC rule 10b-5, mail/wire fraud, SEC rule 14e-3, Exchange Act section 16, and Securities Act section 17(a). The state laws discussed are the common law, the Uniform Securities Act, and the California and New York securities statutes.

Another chapter addresses government enforcement of the insider trading/tipping prohibitions. A chapter on compliance programs deals with how firms can try …

Freedom Of Contract: The Trojan Horse Of Rule 10b-5, Margaret V. Sachs

Scholarly Works

Before the late 1980s, traditional contract law played virtually no role in private litigation under section 10(b) of the Securities Exchange Act of 1934 and rule 10b-5. The reason was perceived incompatibility. The 1934 Act is regulation intended to supersede “the philosophy of caveat emptor,” whereas traditional contract law promotes bargaining free of regulation. In the late 1980s, however, the tide turned. Since that time, private rule 10b-5 litigation has become riddled with the vocabulary of traditional contract jurisprudence – the statute of frauds, merger clauses, attorneys' fees clauses, choice of law clauses, releases, and the formation of an agreement. …

Voluntary Recapitalization, Fairness, And Rule 10b-5: Life Along The Trail Of Santa Fe, Rutheford B. Campbell Jr.

Law Faculty Scholarly Articles

In corporate recapitalizations, the board of directors will sometimes propose a recapitalization plan which substantially alters the “bundle of rights” represented by preferred shares. Although these plans cannot usually be completed without the approval of a majority of the preferred shareholders, the preferred shareholders are at a disadvantage to protect their interests for several reasons. Thus preferred shareholders who are dissatisfied with the change in their rights will sometimes call upon state courts to enjoin the recapitalization on the grounds that it is unfair or fraudulent; state courts, however, have provided only slight protection for preferred shareholders. In this article, …