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Articles 1 - 9 of 9
Full-Text Articles in Securities Law
A Suggested Revision Of The 2020 Vertical Merger Guidelines (July 2021), Steven C. Salop
A Suggested Revision Of The 2020 Vertical Merger Guidelines (July 2021), Steven C. Salop
Georgetown Law Faculty Publications and Other Works
The DOJ/ FTC Vertical Merger Guidelines (VMGs) were adopted by the FTC in June 2020 by a party-line 3-2 party line over the dissent of the Acting Chair. One might expect that the VMGs will be withdrawn and/or revised, now that there is a Democratic majority. Revision is appropriate because the VMGs are both incomplete and overly permissible. This Suggested Revision can aid that process.
Vertical Mergers In A Model Of Upstream Monopoly And Incomplete Information, Serge Moresi, David Reitman, Steven C. Salop, Yianis Sarafidis
Vertical Mergers In A Model Of Upstream Monopoly And Incomplete Information, Serge Moresi, David Reitman, Steven C. Salop, Yianis Sarafidis
Georgetown Law Faculty Publications and Other Works
We examine the role of private information on the impact of vertical mergers. A vertical merger can improve the information that is available to an upstream monopolist because, after the merger, the monopolist can observe the cost of its downstream merger partner. In the pre-merger world, because the costs of the downstream firms are private information, the monopolist has incomplete information and cannot implement the monopoly outcome: The expected pre-merger equilibrium price of the downstream product is lower than the monopoly price. After a vertical merger, the equilibrium input price that is charged to the downstream rival can either increase …
Quantifying The Increase In “Effective Concentration” From Verticle Mergers That Raise Input Foreclosure Concerns: Comment On The Draft Vertical Merger Guidelines, Serge Moresi, Steven C. Salop
Quantifying The Increase In “Effective Concentration” From Verticle Mergers That Raise Input Foreclosure Concerns: Comment On The Draft Vertical Merger Guidelines, Serge Moresi, Steven C. Salop
Georgetown Law Faculty Publications and Other Works
This comment responds to the request by the Federal Trade Commission and the Department of Justice’s Antitrust Division for public comment on the draft 2020 Vertical Merger Guidelines. In this comment, we show that there is an inherent loss of an indirect competitor and competition when a vertical merger raises input foreclosure concerns. We also show that it then is possible to calculate an effective increase in the HHI measure of concentration for the downstream market. We refer to this “proxy” measure as the “dHHI.” We derive the dHHI measure by comparing the pricing incentives and associated upward …
Recommendations And Comments On The Draft Vertical Merger Guidelines, Jonathan B. Baker, Nancy L. Rose, Steven C. Salop, Fiona Scott Morton
Recommendations And Comments On The Draft Vertical Merger Guidelines, Jonathan B. Baker, Nancy L. Rose, Steven C. Salop, Fiona Scott Morton
Georgetown Law Faculty Publications and Other Works
These recommendations and comments respond to the request by the Federal Trade Commission and the Department of Justice’s Antitrust Division for public comment on the draft 2020 Vertical Merger Guidelines. We commend the agencies for updating the 1984 non-horizontal merger guidelines by recognizing the substantial advances in economic thinking about vertical mergers in the thirty-five years since those guidelines were issued. Our comments emphasize four issues: (i) the treatment of the elimination of double marginalization (“EDM”), particularly that the draft vertical merger guidelines appear inappropriately to make proof of cognizability part of the agencies burden and that they appear to …
Judgment Day For Fraud-On-The-Market: Reflections On Amgen And The Second Coming Of Halliburton, Donald C. Langevoort
Judgment Day For Fraud-On-The-Market: Reflections On Amgen And The Second Coming Of Halliburton, Donald C. Langevoort
Georgetown Law Faculty Publications and Other Works
The Supreme Court has reaffirmed the "fraud on the market" presumption of reliance, facilitating large scale class actions for this kind of securities fraud. This essay traces the road from its decision last year in Amgen to this year's reaffirmation in Halliburton II, and considers some of the issues that will emerge as lower courts struggle with Halliburton II's secondary holding--that the issue of "price impact" is crucial to class certification, even if the burden of proof is on the defendants.
Ipos And The Slow Death Of Section 5, Donald C. Langevoort, Robert B. Thompson
Ipos And The Slow Death Of Section 5, Donald C. Langevoort, Robert B. Thompson
Georgetown Law Faculty Publications and Other Works
Since its enactment, Section 5 of the Securities Act of 1933 has restricted sales-based communications with investors, but that effort is nearly dead even with respect to the most sensitive of offerings, the IPO. Our paper traces that devolution, which began almost as soon as the ’33 Act came into existence, though the SEC’s 2005 deregulatory reforms and Congress’ intervention in the JOBS Act of 2012. We show how much of this related to an embrace of “book-building” as the industry’s preferred method of price discovery, which requires private two-way communications between underwriters and potential sophisticated investors. But book-building (and …
A Natural Experiment: Asset Manager Liability, Cally Jordan
A Natural Experiment: Asset Manager Liability, Cally Jordan
Faculty Papers & Publications
It is a natural experiment: two highly integrated national economies, sharing a vast continent, a common language and hundreds of years of common experience. They are bound by a free trade agreement which has fostered strong trade flows in goods, services and capital. Yet, in important respects, the structural characteristics of their financial institutions, and the regulatory framework in which they operate, are different, so different in fact, that one country has been crippled for several years now by the global financial crisis and the other has emerged virtually unscathed. The countries, of course, are Canada and the United States. …
What Were They Thinking? Insider Trading And The Scienter Requirement, Donald C. Langevoort
What Were They Thinking? Insider Trading And The Scienter Requirement, Donald C. Langevoort
Georgetown Law Faculty Publications and Other Works
On its face, the connection between insider trading regulation and the state of mind of the trader or tipper seems intuitive. Insider trading is a form of market abuse: taking advantage of a secret to which one is not entitled, generally in breach of some kind of fiduciary-like duty. This chapter examines both the legal doctrine and the psychology associated with this pursuit. There is much conceptual confusion in how we define unlawful insider trading—the quixotic effort to build a coherent theory of insider trading by reference to the law of fraud, rather than a more expansive market abuse standard—which …
Can An Old Dog Learn New Tricks? Applying Traditional Corporate Law Principles To New Social Enterprise Legislation, Alicia E. Plerhoples
Can An Old Dog Learn New Tricks? Applying Traditional Corporate Law Principles To New Social Enterprise Legislation, Alicia E. Plerhoples
Georgetown Law Faculty Publications and Other Works
Seven U.S. states have recently adopted the benefit corporation or the flexible purpose corporation—two novel corporate forms intended to house social enterprises, i.e., those ventures that pursue social and environmental missions along with profits. And yet, these corporate forms are not viable or sustainable if they do not attract social entrepreneurs or social investors due to the lack of understanding and inquiry into how traditional corporate law principles will be applied to them. This article begins this necessary examination. As a first approach, this article assesses shareholder primacy and the shareholder wealth maximization norm in the context of the sale …