Securities Law Commons^™

The Unjustified Judicial Creation Of Class Certification Merits Trials In Securities, Michael J. Kaufman, John M. Wunderlich

University of Michigan Journal of Law Reform

The class action device is vital to deterring securities fraud and remedying its victims, who almost never suffer losses sufficient to justify an individual suit. Nonetheless, the federal courts have begun to convert the class certification process into a premature trial on the merits, thereby precluding victims of securities fraud from pursuing otherwise valid claims of financial wrongdoing. In particular, in a series of important decisions, the federal courts have required plaintiffs to prove the essential elements of their securities fraud claims at the preliminary class certification stage.

This Article demonstrates why this trend should end. The judicial creation of …

Sec V. Talbot: The "Misappropriation-Plus" Theory, Kalina Laleva

Golden Gate University Law Review

No abstract provided.

Securities Law - Securities & Exchange Commission V. Rind: Sec Civil Enforcement Actions Are Not Subject To Statute Of Limitations, Joan E. Low

Golden Gate University Law Review

In Securities & Exchange Commission v. Rind, the United States Court of Appeals for the Ninth Circuit, ruling on an issue of first impression, held that civil enforcement actions brought by the Securities and Exchange Commission (hereinafter "SEC") are not subject to statute of limitations restrictions. Additionally, the court ruled that no right to a jury trial attaches in SEC civil enforcement actions seeking disgorgement of illicit profits.

Securities Law, Peter A. Mastromonaco

Golden Gate University Law Review

No abstract provided.

Extraterritoriality As Standing: A Standing Theory Of The Extraterritorial Application Of The Securities Laws, Erez Reuveni

Erez Reuveni

This Article contends that the current treatment of the extraterritorial scope of the 1934 Securities Exchange Act as a question of subject matter jurisdiction is wrong. Although the Act is silent as to its extraterritorial application, for over forty years courts have analyzed the Act’s extraterritorial scope as a question of subject matter jurisdiction, relying on the so-called “conduct” and “effects” tests. Because courts apply these tests in an ad hoc, case-by-case manner, they are inherently unpredictable and unnecessarily complicated. This state of affairs has become particularly troublesome in recent years, as so-called “foreign-cubed” securities fraud lawsuits - lawsuits filed …

Corporate Governance In The Courtroom: An Empirical Analysis, Jessica M. Erickson

Law Faculty Publications

Conventional wisdom is that shareholder derivative suits are dead. Yet this death knell is decidedly premature. The current conception of shareholder derivative suits is based on an empirical record limited to suits filed in Delaware or on behalf of Delaware corporations, leaving suits outside this sphere in the shadows of corporate law scholarship. This Article aims to fill this gap by presenting the first empirical examination of shareholder derivative suits in the federal courts. Using an original, hand-collected data set, my study reveals that shareholder derivative suits are far from dead. Shareholders file more shareholder derivative suits than securities class …

The Implications Of Ifrs On The Functioning Of The Securities Antifraud Regime In The United States, Lance J. Phillips

Michigan Law Review

The United States is home to one of the most investor-friendly securities antifraud regimes in the world. Corporate misstatements that form the basis for a cause of action under one of the many antifraud provisions arise in a variety of contexts, an important one being as violations of U.S. generally accepted accounting principles ("GAAP"). For several years, the Securities and Exchange Commission has been considering changing the standardized accounting practice in the United States from GAAP to International Financial Reporting Standards ("IFRS") to promote comparability between global investment opportunities. IFRS is a principles-based system of accounting, while GAAP is rules …

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 …

• The Credit Crisis And Subprime Litigation: How Fraud Without Motive ‘Makes Little Economic Sense’, Peter Hamner

Peter Hamner

The recent collapse of the financial markets spurred numerous lawsuits seeking a faulty party. Many plaintiffs argue that market participants committed securities fraud. They claim that deficient subprime loans caused the financial crisis. These risky loans were allegedly originated by banks to be sold off to third parties. The subprime loans were securitized and spread throughout the financial markets. The risk these loans presented was allegedly not disclosed to the buyers of the loans and securities on the loans. As these deficient loans and securities began to default the financial markets came to a halt. This article argues that securities …

The Case For Semi-Strong-Form Corporate Scienter In Securities Fraud Actions, Paul B. Maslo

Michigan Law Review First Impressions

The mental state of scienter - intent to defraud - is a required element of a securities fraud claim. The scienter inquiry is fairly straightforward when the defendant is an individual. It is more complex when a corporate entity is involved because a corporation can only act through its agents; it has no mind of its own. This article compares the three approaches courts have used to impute scienter to corporate defendants in the securities fraud context and concludes by recommending the approach which strikes an appropriate balance between several dueling public policy concerns.

One Nation, Under Securities Fraud: The Third Circuit Notches A Win For Federalism In In Re Lord Abbett Mutual Funds Fee Litigation, Ethan H. Townsend

Villanova Law Review

No abstract provided.

Personal Jurisdiction Over Foreign Directors In Cross-Border Securities Litigation, Hannah L. Buxbaum

Articles by Maurer Faculty

No abstract provided.

Lying And Getting Caught: An Empirical Study Of The Effect Of Securities Class Action Settlements On Targeted Firms, James D. Cox, Lynn Bai, Randall S. Thomas

Faculty Scholarship

The ongoing Great Recession has triggered numerous proposals to improve the regulation of financial markets and, most importantly, the regulation of organizations such as credit rating agencies, underwriters, hedge funds, and banks, whose behavior is believed to have caused the credit crisis that spawned the economic collapse. Not surprisingly, some of the reform efforts seek to strengthen the use of private litigation. Private suits have long been championed as a necessary mechanism not only to compensate investors for harms they suffer from financial frauds but also to enhance deterrence of wrongdoing. However, in recent years there has been a chorus …

Securities Class Actions Move North: A Doctrinal And Empirical Analysis Of Securities Class Actions In Canada, Adam C. Pritchard, Janis P. Sarra

Articles

The article explores securities class actions involving Canadian issuers since the provinces added secondary market class action provisions to their securities legislation. It examines the development of civil liability provisions, and class proceedings legislation and their effect on one another. Through analyses of the substance and framework of the statutory provisions, the article presents an empirical and comparative examination of cases involving Canadian issuers in both Canada and the United States. In addition, it explores how both the availability and pricing of director and officer insurance have been affected by the potential for secondary market class action liability. The article …