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Full-Text Articles in Securities Law
Giving Shareholders The Right To Say No, Albert H. Choi, Adam C. Pritchard
Giving Shareholders The Right To Say No, Albert H. Choi, Adam C. Pritchard
Articles
When a public company releases misleading information that distorts the market for the company’s stock, investors who purchase at the inflated price lose money when (and if) the misleading information is later corrected. Under Rule 10b‑5 of the Securities Exchange Act of 1934, investors can seek compensation from corporations and their officers who make materially misleading statements that the investors relied on when buying or selling a security. Compensation is the obvious goal, but the threat of lawsuits can also benefit investors by deterring managers from committing fraud.
The New Public/Private Equilibrium And The Regulation Of Public Companies, Elisabeth De Fontenay, Gabriel Rauterberg
The New Public/Private Equilibrium And The Regulation Of Public Companies, Elisabeth De Fontenay, Gabriel Rauterberg
Articles
This Symposium Article examines how the public/private divide works today and maps out some of the potential implications for major issues in securities law. Classic debates in securities law were often predicated on the idea that public companies are a coherent class of firms that differ markedly from private companies. For more than fifty years after the adoption of the federal securities laws, this view was justified. During that period, the vast majority of successful and growing private firms eventually accepted the regulatory obligations of being public in order to access a wider and deeper pool of capital, among other …
Revisiting 'Truth In Securities Revisited': Abolishing Ipos And Harnessing Private Markets In The Public Good, Adam C. Pritchard
Revisiting 'Truth In Securities Revisited': Abolishing Ipos And Harnessing Private Markets In The Public Good, Adam C. Pritchard
Articles
My thesis is that the transition between private- and public-company status could be less bumpy if we unify the public-private dividing line under the Securities Act and Exchange Act. The insight builds on Cohen's thought experiment where Congress first enacted the Exchange Act. My proposed public-private standard would take the company-registration model to its logical conclusion. The customary path to public-company status is through an IPO, typically with simultaneous listing of the shares on an exchange. There is nothing about public offerings, however, that makes them inherently antecedent to public-company status. What if companies became public, with required periodic disclosures …
Facebook, The Jobs Act, And Abolishing Ipos, Adam C. Pritchard
Facebook, The Jobs Act, And Abolishing Ipos, Adam C. Pritchard
Articles
Initial public offerings (IPOs)-the first sale of private firms' stock to the public-are a bellwether of investor sentiment. Investors must be bullish if they are putting their money into untested start-ups. IPOs are frequently cited in the business press as a key barometer of the health of financial markets. Politicians, too, see a steady flow of IPOs as an indicator that capital is fueling the entrepreneurial initiative that sustains the growth of new businesses. Growing businesses create jobs, so Republicans and Democrats can find common ground on the importance of promoting IPOs. That bipartisan consensus was on display this spring …
Populist Retribution And International Competition In Financial Services Regulation, Adam C. Pritchard
Populist Retribution And International Competition In Financial Services Regulation, Adam C. Pritchard
Articles
The pattern of regulatory reform in financial services regulation follows a predictable pattern in democratic states. A hyperactive market generates a bubble, the bubble deflates, and much financial pain ensues for those individuals who bought at the top of the market. The financial mess brings the scrutiny of politicians, who vow "Never again!" A political battle ensues, with representatives of the financial services industry fighting a rearguard action to preserve its prerogatives amidst cries for the bankers' scalps. Regulations, carefully crafted to win the last war, are promulgated. Memories fade of the foolish enthusiasm that fed the last bubble. Slowly, …
London As Delaware?, Adam C. Pritchard
London As Delaware?, Adam C. Pritchard
Articles
Jurisdictional competition in corporate law has long been a staple of academic-and sometimes, political-debate in the United States. State corporate law, by long-standing tradition in the United States, determines most questions of internal corporate governance-the role of boards of directors, the allocation of authority between directors, managers and shareholders, etc.-while federal law governs questions of disclosure to shareholders-annual reports, proxy statements, and periodic filings. Despite substantial incursions by Congress, most recently in the Sarbanes-Oxley Act of 2002, this dividing line between state and federal law persists, so state law arguably has the most immediate impact on corporate governance outcomes.
London As Delaware?, Adam C. Pritchard
London As Delaware?, Adam C. Pritchard
Articles
In the United States, state corporate law determines most questions of internal corporate governance - the role of directors; the allocation of authority between directors, managers, and shareholders; etc. - while federal law governs questions of disclosure to shareholders - annual reports, proxy statements, and periodic filings. Despite substantial incursions by Congress, most recently with the Sarbanes-Oxley Act, this dividing line between state and federal law persists, so state law arguably has the most immediate effect on corporate governance outcomes.
The Irrational Auditor And Irrational Liability, Adam C. Pritchard
The Irrational Auditor And Irrational Liability, Adam C. Pritchard
Articles
This Article argues that less liability for auditors in certain areas might encourage more accurate and useful financial statements, or at least equally accurate statements at a lower cost. Audit quality is promoted by three incentives: reputation, regulation, and litigation. When we take reputation and regulation into account, exposing auditors to potentially massive liability may undermine the effectiveness of reputation and regulation, thereby diminishing integrity of audited financial statements. The relation of litigation to the other incentives that promote audit quality has become more important in light of the sea change that occurred in the regulation of the auditing profession …
Regulation Of Companies With Publicly Listed Share Capital In The People's Republic Of China, Nicholas C. Howson
Regulation Of Companies With Publicly Listed Share Capital In The People's Republic Of China, Nicholas C. Howson
Articles
Mr. Chairman, colleagues, and friends: It is a great honor for me to be able to address this group of experts and legislators, and many colleagues and friends, on a topic I care deeply about-the regulation of so-called public companies, both outside of China and, since the early 1990s, inside of China. First, and with many of the others invited to participate in this conference today and tomorrow, I thank the Office of Legislative Affairs ("OLA") of the State Council of the People's Republic of China ("PRC") as well as the China Securities Regulatory Commission ("CSRC") for convening this very …