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Full-Text Articles in Securities Law
Congressional Securities Trading, Gregory Shill
Congressional Securities Trading, Gregory Shill
Indiana Law Journal
The trading of stocks and bonds by Members of Congress presents several risks that warrant public concern. One is the potential for policy distortion: lawmakers' personal investments may influence their official acts. Another is a special case of a general problem: that of insiders exploiting access to confidential information for personal gain. In each case, the current framework which is based on common law fiduciary principles is a poor fit. Surprisingly, rules from a related context have been overlooked.
Like lawmakers, public company insiders such as CEOs frequently trade securities while in possession of confidential information. Those insiders' trades are …
Chiarella V. United States And Its Indelible Impact On Insider Trading Law, Donna M. Nagy
Chiarella V. United States And Its Indelible Impact On Insider Trading Law, Donna M. Nagy
Articles by Maurer Faculty
Insider trading cases, which are typically prosecuted as securities fraud, carry a mystique rarely present in securities litigation. As a former U.S. Attorney for the Southern District of New York once observed, the cases involve "'basically cops and robbers. . . .[d]id you get the information and did you trade on it?" It is no wonder that each insider trading case featured in this symposium presents a captivating story. But for two distinct reasons, Chiarella v. United States occupies a special place in history. It was the first prosecution under the federal securities laws for the crime of insider trading. …
Do Founders Control Start-Up Firms That Go Public?, Brian Broughman, Jesse M. Fried
Do Founders Control Start-Up Firms That Go Public?, Brian Broughman, Jesse M. Fried
Articles by Maurer Faculty
Black & Gilson (1998) argue that an IPO-welcoming stock market stimulates venture deals by enabling VCs to give founders a valuable "call option on control." We study 18,000 startups to investigate the value of this option. Among firms that reach IPO, 60% of founders are no longer CEO. With little voting power, only half of the others survive three years as CEO. At initial VC financing, the probability of getting real control of a public firm for three years is 0.4%. Our results shed light on control evolution in startups, and cast doubt on the plausibility of the call-option theory …