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Full-Text Articles in Securities Law

Corporate Personhood: Possibilities For Progressive, Trans-Doctrinal Legal Reform, Aisha Ihab Saad Dec 2019

Corporate Personhood: Possibilities For Progressive, Trans-Doctrinal Legal Reform, Aisha Ihab Saad

Boston College Law Review

Kent Greenfield’s Corporations Are People Too (And They Should Act Like It) reclaims the legal theory of corporate personhood from the conservative right and champions it for the progressive left. Greenfield argues that corporate personhood, properly construed, can further progressive goals by limiting certain corporate powers, increasing corporate accountability, and enabling corporate management to govern in the interests of all stakeholders. Greenfield advances a progressive account of corporate personhood and elaborates its implementation in constitutional law and in corporate law. This symposium response extends Greenfield’s conception of corporate person-hood to related questions in securities law and tort law ...


Securities Disclosure As Soundbite: The Case Of Ceo Pay Ratios, Steven A. Bank, George S. Georgiev Apr 2019

Securities Disclosure As Soundbite: The Case Of Ceo Pay Ratios, Steven A. Bank, George S. Georgiev

Boston College Law Review

This Article analyzes the history, design, and effectiveness of the highly controversial CEO pay ratio disclosure rule, which went into effect in 2018. Based on a regulatory mandate contained in the Dodd-Frank Act of 2010, the rule requires public companies to disclose the ratio between CEO pay and median worker pay as part of their annual filings with the Securities and Exchange Commission (SEC). The seven-year rulemaking process was politically contentious and generated a level of public engagement that was virtually unprecedented in the long history of the SEC disclosure regime. The SEC sought to minimize compliance costs by providing ...


When The Same Words Mean Different Things: Varjabedian V. Emulex Corp., And The Requirements Of Section 14(E) Of The Exchange Act, Isaac Lederman Mar 2019

When The Same Words Mean Different Things: Varjabedian V. Emulex Corp., And The Requirements Of Section 14(E) Of The Exchange Act, Isaac Lederman

Boston College Law Review

On April 20, 2018, in Varjabedian v. Emulex Corp., the United States Court of Appeals for the Ninth Circuit held that Section 14(e) of the Securities Exchange Act of 1934 requires only a showing of negligence, not scienter, to establish a violation. The Ninth Circuit derived that requirement from the fact that Section 14(e) resembles Section 17(a)(2) of the Securities Act of 1933. In reaching this conclusion, the Ninth Circuit split with all the other courts to consider this question. The Second, Third, Fifth, Sixth, and Eleventh Circuits had previously held that Section 14(e) shares ...


Duty Or No Duty? That Is The Question: The Second Circuit Reasserts That A Violation Of Item 303'S Duty To Disclose Can Establish Liability Under Section 10(B), Rebecca Rabinowitz Feb 2019

Duty Or No Duty? That Is The Question: The Second Circuit Reasserts That A Violation Of Item 303'S Duty To Disclose Can Establish Liability Under Section 10(B), Rebecca Rabinowitz

Boston College Law Review

On March 29, 2016, in Indiana Public Retirement Systems v. SAIC, Inc., the United States Court of Appeals for the Second Circuit reaffirmed its earlier conclusion that a violation of the duty to disclose imposed on publicly traded companies by Item 303 of Regulation S-K can constitute a violation of Section 10(b) of the Securities Exchange Act of 1934. In so doing, the Second Circuit directly conflicted with a decision from the United States Court of Appeals for the Ninth Circuit, Cohen v. NVIDIA Corp. (In re NVIDIA Corp. Securities Litigation), despite the fact that both courts relied upon ...


Investment Disputes Oltre Lo Stato: On Global Administrative Law, And Fair And Equitable Treatment, Sebastián López Escarcena Nov 2018

Investment Disputes Oltre Lo Stato: On Global Administrative Law, And Fair And Equitable Treatment, Sebastián López Escarcena

Boston College Law Review

Global Administrative Law is an academic project that attempts to describe the emergence of a regulatory space beyond the state and to prescribe solutions to the problems it diagnoses through certain normative principles like participation, transparency, reasoned decision-making, judicial review, accountability, proportionality, and legitimate expectations. In the case of investment treaty arbitration, the principles advanced by Global Administrative Law are akin to the constitutive elements of the fair and equitable treatment that international arbitral tribunals have identified in investor-state disputes. As classified by international law scholars, these constitutive elements of fair and equitable treatment include due process, arbitrariness, non-discrimination, vigilance ...


Should Investment Treaties Contain Public Policy Exceptions?, Caroline Henckels Nov 2018

Should Investment Treaties Contain Public Policy Exceptions?, Caroline Henckels

Boston College Law Review

The increasing inclusion of exceptions in newly concluded investment treaties, together with the divergent manner in which tribunals and annulment committees have approached these provisions, suggests that a greater understanding of their role and purpose is needed. In particular, the question whether exceptions operate as permissions or as defenses is a crucial but unaddressed issue that has significant implications for both litigation and practice and, in turn, implications for the stability of the regime. This Essay argues that as a starting point, exceptions should be understood as permissions that limit the scope of the substantive treaty obligations, and not as ...


Introduction: Investment Law For The Twenty-First Century, Frank J. Garcia, Sebastián López Escarcena Nov 2018

Introduction: Investment Law For The Twenty-First Century, Frank J. Garcia, Sebastián López Escarcena

Boston College Law Review

No abstract provided.


Third-Party Funding As Exploitation Of The Investment Treaty System, Frank J. Garcia Nov 2018

Third-Party Funding As Exploitation Of The Investment Treaty System, Frank J. Garcia

Boston College Law Review

Third-party funding of international investment arbitration is on the rise. Through TPF funders will cover the legal fees of investors filing claims under investment treaties in exchange for a portion of the arbitral award. Proponents of third-party funding claim that it provides access to justice for parties that normally would not have the funds to arbitrate against state actors. Given that the international investment law that governs these claims is unbalanced, and that funding only flows towards investor-claimants, and at the expense of states and their taxpayers, allowing third-party funding in investment arbitration risks creating unjustifiable wealth transfers from the ...


Balancing Sustainability, The Right To Regulate, And The Need For Investor Protection: Lessons From The Trade Regime, Elizabeth Trujillo Nov 2018

Balancing Sustainability, The Right To Regulate, And The Need For Investor Protection: Lessons From The Trade Regime, Elizabeth Trujillo

Boston College Law Review

Recent initiatives for investment reform demonstrated by the 2016 United Nations Conference on Trade and Development and 2018 World Investment Reports have raised key issues for sustainable development in the context of investment in natural resources and energy. Where there has been increasing convergence between trade and environmental norms as trade regimes confront domestic regulatory measures for environmental protection and climate change mitigation, similarly investment regimes also have had to address such domestic measures but with little progress towards normative convergence. At the same time, there’s an increasing skepticism for the traditional models of globalization of the 1990s and ...


Justice For All? Protecting The Public Interest In Investment Treaties, Alessandra Arcuri, Francesco Montanaro Nov 2018

Justice For All? Protecting The Public Interest In Investment Treaties, Alessandra Arcuri, Francesco Montanaro

Boston College Law Review

Investment arbitration has come increasingly under fire because of its design flaws. There is an emerging consensus that investment treaty arbitration not only falls short of ensuring a sufficient degree of transparency of arbitral proceedings and impartiality of arbitrators, but also that its institutional architecture is unjustifiably asymmetric, entrusting foreign investors with significant rights while no protection is afforded to the host states’ constituencies. In response to these criticisms, several states have attempted in recent years to reform the rules governing investor-state arbitration. A perusal of recently concluded international investment agreements, however, reveals that the reform efforts so far have ...


Avoiding The Planned Obsolescence Of Modern International Investment Agreements: Can General Exception Mechanisms Be Improved, And How?, Camille Martini Nov 2018

Avoiding The Planned Obsolescence Of Modern International Investment Agreements: Can General Exception Mechanisms Be Improved, And How?, Camille Martini

Boston College Law Review

In light of the increase in investor-state disputes brought by foreign investors under the arbitration clauses contained in international investment agreements (“IIAs”), treaty negotiators have started to develop safeguards in recent IIAs in an attempt to mitigate the impact of these agreements on their regulatory powers. General exception clauses modeled on Article XX of the General Agreement on Tariffs and Trade are part of these new treaty provisions. General exceptions clauses are, in their current form, a source of uncertainty rather than coherence. Recent arbitration cases have shed light on the unworkable enforceability requirements contained in general exceptions clauses, preventing ...


(Re)Calibration, Standard-Setting And The Shaping Of Investment Law And Arbitration, Eric De Brabandere Nov 2018

(Re)Calibration, Standard-Setting And The Shaping Of Investment Law And Arbitration, Eric De Brabandere

Boston College Law Review

Calibrating or (re)calibrating investment law and arbitration—depending on whether the exercise takes place for the first or a subsequent time—is different from rebalancing investment law and arbitration. A balancing exercise denotes a situation in which different elements are equal or in the correct proportions to maintain a sort of equilibrium. This Essay argues that investment law and arbitration are not necessarily about creating a situation in which all “elements” are in balance and that (re)calibrating is an interesting starting point for a discussion about the contemporary regime of investment law and arbitration, and especially to explore ...


Legitimacy Concerns Of The Proposed Multilateral Investment Court: Is Democracy Possible?, José Manuel Alvarez Zárate Nov 2018

Legitimacy Concerns Of The Proposed Multilateral Investment Court: Is Democracy Possible?, José Manuel Alvarez Zárate

Boston College Law Review

Growing concerns in Europe about international investment regimes and investor-state dispute settlement systems pushed the European Union into pursuing the creation of an investment court system and a multilateral investment court. The European Union started this reform through the Comprehensive Economic Trade Agreement, the Vietnam-EU Free Trade Agreement, and by direct persuasion of other countries to start negotiations at the United Nations Commission on International Trade Law. Visible reasons for the change include concerns over the perception of a lack of transparency, coherence, and arbitrators’ partiality, all of which diminish the legitimacy of the multilateral investment court. Other reasons might ...


Making Investment Arbitration Work For All: Addressing The Deficits In Access To Remedy For Wronged Host State Citizens Through Investment Arbitration, Emmanuel T. Laryea Nov 2018

Making Investment Arbitration Work For All: Addressing The Deficits In Access To Remedy For Wronged Host State Citizens Through Investment Arbitration, Emmanuel T. Laryea

Boston College Law Review

The current dominant system for resolving international investment disputes is the Investor-State Dispute Settlement system or, more precisely, the Investor-State Arbitration system (ISA). The ISA system has proved to be an effective avenue for remedy for foreign investors whose investments are wrongfully impaired by host states. However, the system is not accessible to Host State Citizens (HSCs) whose interests may be harmed by investors. Wronged HSCs can seek redress in domestic fora only. The domestic fora in many jurisdictions leave many wronged HSCs without remedy, a problem that has long been acknowledged. This Essay proposes a solution. It proposes that ...


Expansive Disclosure: Regulating Third-Party Funding For Future Analysis And Reform, Rachel Denae Thrasher Nov 2018

Expansive Disclosure: Regulating Third-Party Funding For Future Analysis And Reform, Rachel Denae Thrasher

Boston College Law Review

Third-party funding (TPF) is a relatively new phenomenon in the field of international investment arbitration. TPF takes place when a non-party to a dispute provides funding to one of the parties (usually the claimant) in return for a percentage of the amount recovered. International investment arbitration is a unique context, however, because investor-states dispute settlement puts States always in the role of respondent and private investors in the role of claimants. Despite this apparent imbalance, TPF proponents argue, among other things, that it provides much needed access to justice for poorer clients and adds value to the system by providing ...


Investment Treaties, Offshore Finance, And The Resource Curse, Karl M.F. Lockhart Nov 2018

Investment Treaties, Offshore Finance, And The Resource Curse, Karl M.F. Lockhart

Boston College Law Review

Questions of how best to understand offshore financial centers (“OFCs”)—countries that have low or zero tax rates, strong banking secrecy regulation, and easy-to-form legal entities—and what, if anything, the international community should do about them remain fixed on the agenda of national and international discourse. This Essay seeks to provide a new theoretical perspective on tax havens and applies this perspective to the cross-border legal regimes that govern international investment. This new analytical framework sees offshore financial centers as countries that are victims of the “resource curse,” as that term is described in economic development literature. Often physically ...


Greening Investor-State Dispute Settlement, Daniel B. Magraw, Sergio Puig Nov 2018

Greening Investor-State Dispute Settlement, Daniel B. Magraw, Sergio Puig

Boston College Law Review

Climate change poses serious threats to human society. Climate change is already affecting our environment and thus, many aspects of human and economic activity. Among the challenges ahead, governments will need to more actively adopt regulatory policies given the international obligations in this area, such as the Paris Agreement, as well as promote green private investment as a means toward unlocking sustainable growth. How can international investment law be adapted and modernized to respond to these challenges? In this Essay, we summarize a comprehensive set of innovations that could be included in International Investment Agreements to address international obligations regarding ...


Reforming International Investment Law: Opportunities, Challenges, Paradigms, Frank J. Garcia, Leo Gargne, Eric De Brabandere, Rachel Denae Thrasher, William Park Nov 2018

Reforming International Investment Law: Opportunities, Challenges, Paradigms, Frank J. Garcia, Leo Gargne, Eric De Brabandere, Rachel Denae Thrasher, William Park

Boston College Law Review

Transcription of a panel discussion.


The Sec And Foreign Private Issuers: A Path To Optimal Public Enforcement, Yuliya Guseva Jul 2018

The Sec And Foreign Private Issuers: A Path To Optimal Public Enforcement, Yuliya Guseva

Boston College Law Review

This Article examines SEC enforcement policies and seeks to find the optimum approach to enforcement against foreign private issuers. My previous empirical study of securities class actions against foreign firms identified a number of crucial developments that mainly occurred after Morrison v. National Australia Bank. In Morrison, the Supreme Court sought to limit the extraterritorial reach of the antifraud provisions of the U.S. securities laws. The Court has scaled down the exposure of foreign issuers to securities liability risk, particularly in class-action litigation. If the Supreme Court in Morrison has created a risky enforcement lacuna on the side of ...


Perfect Hedge: Adding Precision To The Proposed Sec Rule On Investment Company Use Of Derivatives With A Hedging Exception, David Miller Apr 2018

Perfect Hedge: Adding Precision To The Proposed Sec Rule On Investment Company Use Of Derivatives With A Hedging Exception, David Miller

Boston College Law Review

Derivatives are complex financial instruments that derive their value from an underlying asset. Used and valued by commercial and financial institutions, derivatives are booming. Indeed, the growing $600 trillion derivative market dwarfs the $67 trillion stock market. Yet, the magnification effect of derivative leverage on losses has well-documented ties to the 2008 Financial Crisis when AIG, Lehman Brothers, and other financial institutions found themselves indebted on hundreds of billions of dollars in derivative transactions. Since the crisis, investment companies and funds constrained by the Investment Company Act to protect unsophisticated and vulnerable investors have increased their use of derivatives. In ...


Closing The Hedge Fund Loophole: The Sec As The Primary Regulator Of Systemic Risk, Cary Martin Shelby Apr 2017

Closing The Hedge Fund Loophole: The Sec As The Primary Regulator Of Systemic Risk, Cary Martin Shelby

Boston College Law Review

The 2008 financial crisis sparked a flurry of regulatory activity and enforcement in an attempt to reign in activity by banks, but other institutions have also been identified as potentially threatening to the stability of the financial markets. In particular, several empirical studies have revealed that systemic risk can be created and transmitted by hedge funds. In response to the risk created by hedge funds, Congress granted the Financial Stability Oversight Council (“FSOC”) authority under the Dodd-Frank Act of 2010 to designate hedge funds as Systemically Important Financial Institutions (“SIFIs”). Such a designation would automatically result in stringent capital constraints ...


Playing To A New Crowd: How Congress Could Break The Startup Status Quo By Raising The Cap On The Jobs Act's Crowdfunding Exemption, Thomas Murphy Apr 2017

Playing To A New Crowd: How Congress Could Break The Startup Status Quo By Raising The Cap On The Jobs Act's Crowdfunding Exemption, Thomas Murphy

Boston College Law Review

On October 30, 2015, the Securities and Exchange Commission voted to implement the Jumpstart Our Business Startups (“JOBS”) Act’s exemption for crowdfunded securities, which became effective on May 16, 2016. Crowdfunding technology allows any entrepreneur with an Internet connection the opportunity to pitch an idea to a community of investors, which could revolutionize the market for early-stage startup financing. That market has largely adhered to a status quo in which the strength of an entrepreneur’s network is nearly as important as his or her idea—a dynamic that is especially difficult for female and minority entrepreneurs who have ...


Failing Cities And The Red Queen Phenomenon, Samir D. Parikh, Zhaochen He Apr 2017

Failing Cities And The Red Queen Phenomenon, Samir D. Parikh, Zhaochen He

Boston College Law Review

Cities and counties are failing. Unfunded liabilities for retirees’ healthcare benefits aggregate to more than $1 trillion. Pension systems are underfunded by as much as $4.4 trillion. Many local government capital structures ensure rising costs and declining revenues, the precursors to service-delivery insolvency. These governments are experiencing the Red Queen phenomenon. They have tried a dizzying number of remedies, but their dire situation persists unchanged. State legislatures have failed to respond. More specifically, many states have refused to implement meaningful debt restructuring mechanisms for local governments. They argue that giving cities and counties the power to potentially impair bond ...


The Sky Is Not Falling, Todd Newman: The Ninth Circuit Endorses A Measured Reading Of Newman's Definition Of Personal Benefit For Insider Trading Liability In United States V. Salman, John L. Potapchuk Apr 2016

The Sky Is Not Falling, Todd Newman: The Ninth Circuit Endorses A Measured Reading Of Newman's Definition Of Personal Benefit For Insider Trading Liability In United States V. Salman, John L. Potapchuk

Boston College Law Review

On July 6, 2015, the U.S. Court of Appeals for the Ninth Circuit, in United States v. Salman, declined to adopt the novel definition of the personal-benefit element for insider trading, as articulated by the U.S. Court of Appeals for the Second Circuit in United States v. Newman in December 2014. In so doing, the court’s decision presented the first significant resistance to the longevity of the Newman court’s apparent holding that the personal-benefit element requires proof of a pecuniary exchange in all instances. This Comment argues that the court in Salman correctly declined to extend ...


Limiting Frivolous Shareholder Lawsuits Via Fee-Shifting Bylaws: A Call For Delaware To Overturn And Revise Its Fee-Shifting Bylaw Statute, Gregory Diciancia Oct 2015

Limiting Frivolous Shareholder Lawsuits Via Fee-Shifting Bylaws: A Call For Delaware To Overturn And Revise Its Fee-Shifting Bylaw Statute, Gregory Diciancia

Boston College Law Review

Shareholder lawsuits have become an epidemic, with lawsuits being filed after almost every merger or acquisition, costing corporations and shareholders billions of dollars. With little substantive and successful reform measures at the federal and state level, corporations have begun to take matters into their own hands, including adopting corporate bylaws to deter these lawsuits. This Note examines the Delaware Supreme Court’s controversial decision in 2014, ATP Tour, Inc. v. Deutscher Tennis Bund, in which the court approved the adoption of fee-shifting bylaws by corporations. It further examines the Delaware State Legislature’s subsequent prohibition of fee-shifting provisions and explores ...


A Cause For Concern: The Need For Proximate Cause In Sec Enforcement Actions And How The Third Circuit Got It Wrong In Sec V. Teo, John P. Quinn May 2015

A Cause For Concern: The Need For Proximate Cause In Sec Enforcement Actions And How The Third Circuit Got It Wrong In Sec V. Teo, John P. Quinn

Boston College Law Review

On February 10, 2014, in SEC v. Teo, the U.S. Court of Appeals for the Third Circuit held that, in an action for disgorgement of profits under the Securities Exchange Act of 1934, the Securities Exchange Commission (SEC) does not have the burden of proving proximate cause. The court reasoned that the SEC must only prove but-for causation between alleged wrongdoing and ill-gotten profits. This Comment argues that, going forward, the Third Circuit should reject Teo and apply a proximate cause standard, especially regarding proceeds. Should the Supreme Court reach the issue in the future, it should similarly reject ...


Correcting Corporate Benefit: How To Fix Shareholder Litigation By Shifting The Doctrine On Fees, Sean Griffith Jan 2015

Correcting Corporate Benefit: How To Fix Shareholder Litigation By Shifting The Doctrine On Fees, Sean Griffith

Boston College Law Review

The current controversy in corporate law concerns whether firms can discourage litigation by shifting its cost to shareholders. But corporate law courts have long engaged in fee-shifting—from shareholder plaintiffs to the corporation—under the “corporate benefit” doctrine. This Article examines fee-shifting in share-holder litigation, arguing that current practices are unsound from the perspective of both doctrine and public policy. Unfortunately, the fee-shifting bylaws recently enacted in response to the problem of excessive shareholder litigation fare no better. The Article therefore offers a different approach to fee-shifting, articulating three specific reforms of the corporate benefit doctrine to quell the current ...


Is Too Big To Fail Too Big To Confess?: Scrutinizing The Sec's "No-Admit" Consent Judgment Proposals, Lynndon Groff Sep 2013

Is Too Big To Fail Too Big To Confess?: Scrutinizing The Sec's "No-Admit" Consent Judgment Proposals, Lynndon Groff

Boston College Law Review

When the Securities and Exchange Commission initiates court action against a public company for violation of federal securities laws, it often proposes a court-enforced settlement between the parties known as a “consent judgment.” Nearly all SEC consent judgment proposals contain a “no-admit” clause, whereby the defendant explicitly refuses to confess to the allegations asserted in the SEC’s complaint. Although “no-admit” consent judgments avoid the costs and uncertainties associated with prolonged litigation, they might not be effective in deterring future misconduct, and they could conceal the full truth about the defendant’s wrongdoing. In the wake of the 2008 financial ...


Fraudulent Corporate Signals: Conduct As Securities Fraud, Manuel A. Utset Mar 2013

Fraudulent Corporate Signals: Conduct As Securities Fraud, Manuel A. Utset

Boston College Law Review

Paying a dividend, repurchasing shares, underpricing an initial public offering, pledging collateral, and borrowing using short-term, instead of long-term debt, are all forms of corporate communications. They are “corporate signals” that tell investors certain things about a company’s operations and current financial position, and about the managers’ confidence in its future performance. This Article provides the first comprehensive analysis of the relationship between corporate signals and securities fraud. The incentive to communicate using corporate signals has increased in recent years, a phenomenon that, I argue, is due to the growing complexity of public corporations, and, importantly, to a number ...


Why "Or" Really Means "Or": In Defense Of The Plain Meaning Of The Private Securities Litigation Reform Act's Safe Harbor Provision, Richard F. Conklin Sep 2010

Why "Or" Really Means "Or": In Defense Of The Plain Meaning Of The Private Securities Litigation Reform Act's Safe Harbor Provision, Richard F. Conklin

Boston College Law Review

Structural features of the class action securities litigation system have allowed plaintiffs’ attorneys to extort settlements from risk-averse corporations. The Private Securities Litigation Reform Act (“PSLRA”) of 1995 attempted to address these structural failings by implementing wideranging reforms. Perhaps most significantly, the PSLRA created a safe harbor provision to immunize the type of statements typically used as ammunition in these frivolous litigations—forward-looking statements. The plain language of the safe harbor provision renders inactionable statements that are not made with actual knowledge of their falsity, or are accompanied by meaningful cautionary language. Although many courts have read this provision literally ...