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Full-Text Articles in Securities Law
Shareholder Compensation As Dividend, James J. Park
Shareholder Compensation As Dividend, James J. Park
Michigan Law Review
This Article questions the prevailing view that securities-fraud actions suffer from a circularity problem. Because shareholder plaintiffs are owners of the defendant corporation, it is commonly argued that shareholder compensation is a payment from shareholders to themselves with substantial transaction costs in the form of attorney fees. But shareholder compensation is no more circular than a dividend, which is a cash payment to shareholders from the company they own with substantial transaction costs in the form of taxes. In fact, shareholder compensation is less circular than a dividend because it is a transfer to shareholders who purchased stock when the …
Financial Statement Insurance: A New Approach To Ivestor Protection, Stephen Z. Surridge
Financial Statement Insurance: A New Approach To Ivestor Protection, Stephen Z. Surridge
University of Michigan Journal of Law Reform
The accounting profession rapidly is moving toward a crisis in liability. Members of the investing public are suing accountants with mounting frequency and success. This article will analyze briefly the origin and present dimensions of the crisis, and then propose a plan for replacing court-imposed liability with insured liability through the offering of financial statement insurance. The essentials of the plan can be simply stated. Insurance would be offered by accountants to investors on a voluntary basis in conjunction with purchases and sales of corporate stock and securities. Individual investors would be able to purchase from the auditors of a …