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Full-Text Articles in Securities Law

What’S (Still) Wrong With Credit Ratings?, Frank Partnoy Oct 2017

What’S (Still) Wrong With Credit Ratings?, Frank Partnoy

Washington Law Review

Scholars and regulators generally agree that credit rating agency failures were at the center of the recent financial crisis. Congress responded to these failures with reforms in the 2010 Dodd-Frank Act. This Article demonstrates that those reforms have failed. Instead, regulators have thwarted Congress’s intent at every turn. As a result, the major credit rating agencies continue to be hugely profitable, yet generate little or no informational value. The fundamental problems that led to the financial crisis—overreliance on credit ratings, a lack of oversight and accountability, and primitive methodologies—remain as significant as they were before the financial crisis. This Article …


Small Investments, Big Losses: The States' Role In Protecting Local Investors From Securities Fraud, Carlos Berkejó Jun 2017

Small Investments, Big Losses: The States' Role In Protecting Local Investors From Securities Fraud, Carlos Berkejó

Washington Law Review

The securities regulation landscape has changed dramatically in recent years. Federal laws have increasingly preempted the regulatory power of states, while at the same time expanding the universe of securities offerings that are not subject to registration at the federal level. These political and policy choices reflect a balancing of two sometimes competing goals: protecting investors and facilitating capital formation. While policies centered on preemption and deregulation might reduce the cost of raising capital, these could also lead to more pervasive securities fraud. Any resulting increase in fraudulent practices is likely to disproportionately affect small securities offerings that are local …


Are The Sec's Administrative Law Judges Biased? An Empirical Investigation, Urska Velikonja Mar 2017

Are The Sec's Administrative Law Judges Biased? An Empirical Investigation, Urska Velikonja

Washington Law Review

The Dodd-Frank Act significantly expanded the SEC’s enforcement flexibility by authorizing the agency to choose whether to bring an enforcement action in court or in an administrative proceeding. The change has faced strong opposition. Federal courts have enjoined several enforcement actions filed in administrative proceedings for constitutional infirmities, and cases are currently winding their way through the appellate process. But even if any constitutional problems were remedied, controversy would persist. Judges, lawmakers, practitioners, and academics have raised doubts as to whether litigation before administrative law judges (“ALJs”) is fair to defendants. In advancing their arguments, they have relied heavily on …


The Other Securities Regulator: A Case Study In Regulatory Damage, Anita K. Krug Jan 2017

The Other Securities Regulator: A Case Study In Regulatory Damage, Anita K. Krug

Articles

Although the Securities and Exchange Commission is the primary securities regulator in the United States, the Department of Labor also engages in securities regulation. It does so by virtue of its authority to administer the Employee Retirement Income Security Act (ERISA), the statute that governs the investment of retirement assets. In 2016, the DOL used its securities regulatory authority to adopt a rule that, for the first time, designates securities brokers who provide investment advice to retirement investors as fiduciaries subject to ERISA's stringent transaction prohibitions. The new rule's objective is salutary, to be sure. However this Article shows that, …