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Indiana Law Journal

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Full-Text Articles in Securities Law

Energy Re-Investment, Hari M. Osofsky, Jacqueline Peel, Brett H. Mcdonnell, Anita Foerster Apr 2019

Energy Re-Investment, Hari M. Osofsky, Jacqueline Peel, Brett H. Mcdonnell, Anita Foerster

Indiana Law Journal

Despite worsening climate change threats, investment in energy—in the United States and globally—is dominated by fossil fuels. This Article provides a novel analysis of two pathways in corporate and securities law that together have the potential to shift patterns of energy investment.

The first pathway targets current investments and corporate decision-making. It includes efforts to influence investors to divest from owning shares in fossil fuel companies and to influence companies to address climate change risks in their internal decision-making processes. This pathway has received increasing attention, especially in light of the Paris Agreement and the Trump Administration’s ...


Beyond The Numbers: Substantive Gender Diversity In Boardrooms, Yaron G. Nili Jan 2019

Beyond The Numbers: Substantive Gender Diversity In Boardrooms, Yaron G. Nili

Indiana Law Journal

The push for gender diversity on public companies’ boards has been gaining traction. Advocacy groups, institutional investors, regulators, and companies themselves have all recognized the need for more diverse boards. However, gender parity is still absent from most public companies’ boards, and a significant number of companies still have no women on their boards.

Current public and academic discourse has focused on the number of women serving on the board and their percentage compared to men as the litmus test for gender diversity. However, academic studies and the public push for more diversity have mostly failed to account for another ...


Do Independent Directors Curb Financial Fraud? The Evidence And Proposals For Further Reform†, S. Burcu Avci, Cindy A. Schipani, Nejat Seyhun Jul 2018

Do Independent Directors Curb Financial Fraud? The Evidence And Proposals For Further Reform†, S. Burcu Avci, Cindy A. Schipani, Nejat Seyhun

Indiana Law Journal

In this Article, we argue that the U.S. corporate governance rules put too much faith in the independent board members and insufficient emphasis on the shareholders to control and monitor top management. Given the agency problem between the board of directors and the shareholders, outside directors can be captured by management, thereby leading to inadequate checks on management. The evidence presented in this Article shows that outside board members do not exercise sufficient controls on management even when management has gone awry. To solve this agency problem, we propose increasing the power of the principals: make shareholder resolutions binding ...


Are Charter Schools The Second Coming Of Enron?: An Examination Of The Gatekeepers That Protect Against Dangerous Related-Party Transactions In The Charter School Sectors, Preston C. Green Iii, Bruce D. Baker, Joseph O. Oluwole Jan 2018

Are Charter Schools The Second Coming Of Enron?: An Examination Of The Gatekeepers That Protect Against Dangerous Related-Party Transactions In The Charter School Sectors, Preston C. Green Iii, Bruce D. Baker, Joseph O. Oluwole

Indiana Law Journal

INTRODUCTION

OVERVIEW OF ENRON

A. ENRON AND DEREGULATION

B. THE LJM SPES

C. ENRON’S COLLAPSE

II: ENRON’S GATEKEEPER PROBLEMS

A. ARTHUR ANDERSEN

B. INDEPENDENT ANALYSTS

C. CREDIT RATING AGENCIES

D. ENRON’S BOARD OF DIRECTORS

E. SECURITIES AND EXCHANGE COMMISSION (SEC)

III: CHARTER SCHOOLS AND RELATED-PARTY TRANSACTIONS

A. CHARTER SCHOOL DEREGULATION AND PRIVATE INVESTORS

B. EXAMPLES OF ENRON-LIKE RELATED-PARTY TRANSACTIONS

1. IMAGINE SCHOOLS

2. IVY ACADEMIA CHARTER SCHOOL

3. AMERICAN INDIAN MODEL CHARTER SCHOOLS

4. GRAND TRAVERSE ACADEMY

5. PENNSYLVANIA CYBER CHARTER SCHOOL

C. THE FEDERAL GOVERNMENT, RELATED-PARTY TRANSACTIONS, AND THE NEED FOR STRONG GATEKEEPING

IV: CHARTER SCHOOL ...


Dictation And Delegation In Securities Regulation, Usha Rodrigues Apr 2017

Dictation And Delegation In Securities Regulation, Usha Rodrigues

Indiana Law Journal

When Congress undertakes major financial reform, either it dictates the precise con-tours of the law itself or it delegates the bulk of the rule making to an administrative agency. This choice has critical consequences. Making the law self-executing in federal legislation is swift, not subject to administrative tinkering, and less vulnerable than rule making to judicial second-guessing. Agency action is, in contrast, deliberate, subject to ongoing bureaucratic fiddling, and more vulnerable than statutes to judicial challenge.

This Article offers the first empirical analysis of the extent of congressional delegation in securities law from 1970 to the present day, examining nine ...


Disciplining Corporate Boards And Debtholders Through Targeted Proxy Access, Michelle M. Harner Jan 2016

Disciplining Corporate Boards And Debtholders Through Targeted Proxy Access, Michelle M. Harner

Indiana Law Journal

Corporate directors committed to a failed business strategy or unduly influenced by the company’s debtholders need a dissenting voice—they need shareholder nominees on the board. This Article examines the biases, conflicts, and external factors that impact board decisions, particularly when a company faces financial distress. It challenges the conventional wisdom that debt disciplines management, and it sug-gests that, in certain circumstances, the company would benefit from having the shareholders’ perspective more actively represented on the board. To that end, the Article proposes a bylaw that would give shareholders the ability to nominate direc-tors upon the occurrence of predefined ...


Ceo Stock Ownership Policies: Rhetoric And Reality, Nitzan Shilon Jan 2015

Ceo Stock Ownership Policies: Rhetoric And Reality, Nitzan Shilon

Indiana Law Journal

This Article is the first academic endeavor to analyze the efficacy and transparency of stock ownership policies (SOPs) in U.S. public firms. SOPs generally require managers to hold some of their firms’ stock for the long term. Following the 2008 financial crisis, firms universally adopted these policies and cited them more than any other policy as a key element in their mitigation of risk. However, my analysis of the recent SOPs of S&P 500 CEOs disputes what firms claim about these policies. First, I find that SOPs are extremely ineffectual in making CEOs hold on to their firm’s stock; this is because these policies generally function in a way that allows CEOs to immediately unload virtually all of the stock they own. Second, I show ...


Shareholder Voting As Veto, Michael S. Kang Oct 2013

Shareholder Voting As Veto, Michael S. Kang

Indiana Law Journal

No abstract provided.


Selectica Resets The Trigger On The Poison Pill: Where Should The Delaware Courts Go Next?, Paul H. Edelman, Randall S. Thomas Jul 2012

Selectica Resets The Trigger On The Poison Pill: Where Should The Delaware Courts Go Next?, Paul H. Edelman, Randall S. Thomas

Indiana Law Journal

No abstract provided.


False Forward-Looking Statements And The Pslra's Safe Harbor, Ann Morales Olazabal Apr 2011

False Forward-Looking Statements And The Pslra's Safe Harbor, Ann Morales Olazabal

Indiana Law Journal

Voluntary public disclosure of soft information—corporate projections and predictions and other forward-looking statements—is now the norm, following a brief learning curve after the enactment of the Private Securities Litigation Reform Act’s safe harbor for forward-looking information in 1995. As a consequence, allegations of false forward-looking statements are also quite standard in today’s class action securities fraud pleading. This work addresses an emerging trend, spearheaded by the Seventh Circuit’s decision in Asher v. Baxter International, to introduce a subjective scienter or intent-like inquiry into consideration of the application of the PSLRA’s safe harbor. Numerous district ...


Two Birds, One Stone: Achieving Corporate Social Responsibility Through The Shareholder-Primacy Norm, Marshall M. Magaro Jul 2010

Two Birds, One Stone: Achieving Corporate Social Responsibility Through The Shareholder-Primacy Norm, Marshall M. Magaro

Indiana Law Journal

No abstract provided.


The Decisions Of The Corporate Special Litigation Committees: An Empirical Investigation, Minor Myers Oct 2009

The Decisions Of The Corporate Special Litigation Committees: An Empirical Investigation, Minor Myers

Indiana Law Journal

Using an original data set gathered from filings with the U.S. Securities and Exchange Commission, this Article tests the prevailing view in corporate law that special litigation committees invariably decide to dismiss shareholder derivative litigation. It demonstrates that (1) special litigation committees decide to pursue or settle claims much more frequently than heretofore recognized; (2) special litigation committees do not otherwise let defendants off the hook when pursuing or settling claims, in view of the financial recovery to the company in either scenario; (3) most shareholder claims subject to the authority of special litigation committees end up settled, not ...


The Future Of Shareholder Democracy, Lisa M. Fairfax Oct 2009

The Future Of Shareholder Democracy, Lisa M. Fairfax

Indiana Law Journal

In 2007, the Securities and Exchange Commission (SEC) considered, and ultimately rejected, a rule that would have required corporations to include shareholder-nominated candidates on the ballot. This Article seeks to ascertain the impact of this rejection. On the one hand, the SEC's rejection appears to be a stunning blow to the shareholders' rights campaign. This is because many shareholders' rights advocates have long considered access to the corporate ballot as the "holy grail" of their campaign for increased shareholder power. Such advocates believe that access to the corporate ballot is critical to ensuring that shareholders can participate legitimately in ...


Legislation And Legitimation: Congress And Insider Trading In The 1980s, Thomas W. Joo Jul 2007

Legislation And Legitimation: Congress And Insider Trading In The 1980s, Thomas W. Joo

Indiana Law Journal

Orthodox corporate law and economics holds that American corporate and securities regulation has evolved inexorably toward economic efficiency. That position is difficult to square with the fact that regulation is the product of government actors and institutions. Indeed, the rational behavior assumptions of law and economics suggest that those actors and institutions would tend to place their own self-interest ahead of economic efficiency. This Article provides anecdotal evidence of such self interest at work. Based on an analysis of legislative history-primarily congressional hearings-this Article argues that Congress had little interest in the economic policy effect of insider trading legislation in ...


Securities Analysts: Why These Gatekeepers Abandoned Their Post, David J. Labhart Oct 2004

Securities Analysts: Why These Gatekeepers Abandoned Their Post, David J. Labhart

Indiana Law Journal

No abstract provided.


Wall Street V. Main Street: The Sec's New Regulation Fd And Its Impact On Market Participants, D. Casey Kobi Jul 2002

Wall Street V. Main Street: The Sec's New Regulation Fd And Its Impact On Market Participants, D. Casey Kobi

Indiana Law Journal

No abstract provided.


Regulation Fd's Effect On Fixed-Income Investors: Is The Public Protected Or Harmed?, Michael A. Harrison Jan 2002

Regulation Fd's Effect On Fixed-Income Investors: Is The Public Protected Or Harmed?, Michael A. Harrison

Indiana Law Journal

No abstract provided.


Limited Liability Companies And The Federal Securities Laws: Congress Should Amend The Securities Laws To Avoid Coverage, George A. Burke Jr. Jul 2001

Limited Liability Companies And The Federal Securities Laws: Congress Should Amend The Securities Laws To Avoid Coverage, George A. Burke Jr.

Indiana Law Journal

No abstract provided.


Patching A Hole In The Jobs Act: How And Why To Rewrite The Rules That Require Firms To Make Periodic Disclosures, Michael D. Guttentag Jan 2000

Patching A Hole In The Jobs Act: How And Why To Rewrite The Rules That Require Firms To Make Periodic Disclosures, Michael D. Guttentag

Indiana Law Journal

Provisions in the Jumpstart Our Business Startups Act of 2012 have made it much easier for firms to avoid federal periodic disclosure obligations, but these provisions were enacted based upon a virtually nonexistent legislative record and upended rules established only after careful consideration almost fifty years earlier. Determining when firms should be required to comply with federal periodic disclosure requirements is best done in the context of a broader understanding of the history and economics of periodic disclosure regulation. This Article provides such an understanding.

The history of periodic disclosure regulation in the United States is traced back to its ...


"Click Here To Buy The Next Microsoft": The Penny Stock Rules, Online Microcap Fraud, And The Unwary Investor, Kevin C. Bartels Jan 2000

"Click Here To Buy The Next Microsoft": The Penny Stock Rules, Online Microcap Fraud, And The Unwary Investor, Kevin C. Bartels

Indiana Law Journal

No abstract provided.


Securities Regulation In The Electronic Era: Private Placements And The Internet, Todd A. Mazur Jan 2000

Securities Regulation In The Electronic Era: Private Placements And The Internet, Todd A. Mazur

Indiana Law Journal

No abstract provided.


Defining The Duty: Attorneys' Obligations Under Rule 10b-5, Cynthia A. Bedrick Oct 1999

Defining The Duty: Attorneys' Obligations Under Rule 10b-5, Cynthia A. Bedrick

Indiana Law Journal

No abstract provided.


Insider Trading, Price Signals, And Noisy Information, Dennis S. Corgill Apr 1996

Insider Trading, Price Signals, And Noisy Information, Dennis S. Corgill

Indiana Law Journal

No abstract provided.


Securities Regulation: Challenges In The Decades Ahead, J. William Hicks Jul 1993

Securities Regulation: Challenges In The Decades Ahead, J. William Hicks

Indiana Law Journal

No abstract provided.


Arbitration Of Securities Disputes: Rodriguez And New Arbitration Rules Leave Investors Holding A Mixed Bag, William C. Hermann Jul 1990

Arbitration Of Securities Disputes: Rodriguez And New Arbitration Rules Leave Investors Holding A Mixed Bag, William C. Hermann

Indiana Law Journal

No abstract provided.


The Capital Markets In Transition: A Response To New Sec Rule 144a, Kellye Y. Testy Jan 1990

The Capital Markets In Transition: A Response To New Sec Rule 144a, Kellye Y. Testy

Indiana Law Journal

No abstract provided.


Using Risk Analysis To Classify Junk Bonds As Equity For Federal Income Tax Purposes, David V. Ceryak Jan 1990

Using Risk Analysis To Classify Junk Bonds As Equity For Federal Income Tax Purposes, David V. Ceryak

Indiana Law Journal

No abstract provided.


A Broker-Dealer's Civil Liability To Investor's For Fraud: An Implied Private Right Of Action Under Section 15(C)(1) Of The Securities Exchange Act Of 1934, Charity Scott Oct 1988

A Broker-Dealer's Civil Liability To Investor's For Fraud: An Implied Private Right Of Action Under Section 15(C)(1) Of The Securities Exchange Act Of 1934, Charity Scott

Indiana Law Journal

No abstract provided.


What Did Congress Really Want? An Implied Private Right Of Action Under Section 17(A) Of The 1933 Securities Act, Mark A. Ryan Jul 1988

What Did Congress Really Want? An Implied Private Right Of Action Under Section 17(A) Of The 1933 Securities Act, Mark A. Ryan

Indiana Law Journal

No abstract provided.


The Tender Offer Regulation Battle Continues: Should States Regulate Only Local Companies?, Phyllis E. Grimm Oct 1985

The Tender Offer Regulation Battle Continues: Should States Regulate Only Local Companies?, Phyllis E. Grimm

Indiana Law Journal

No abstract provided.