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Articles 1 - 30 of 37
Full-Text Articles in Securities Law
Proving Equal Access To Capital In The Age Of The Startup: The Case For Federal Pre-Emption Of State Blue-Sky Laws, Gerry Griffith
Proving Equal Access To Capital In The Age Of The Startup: The Case For Federal Pre-Emption Of State Blue-Sky Laws, Gerry Griffith
The Journal of Business, Entrepreneurship & the Law
Section I of this comment examines the global opportunities available to startups in the digital economy and how startups’ capital demands evolved in the new era of business. Section II analyzes the differences between merit-based securities regulation existing at the state level and disclosure-based regulation, which is the federal regulatory scheme. This Section provides an overview of the three most common methods of restricted securities registration at the state level. Section III examines the development of blue sky laws and the role states originally played in protecting investors. This Section further explores the evolving relationship between state and federal securities …
Insider Trading Framework In United States And Egyptian Stock Markets, Elsayed Eldaydamony
Insider Trading Framework In United States And Egyptian Stock Markets, Elsayed Eldaydamony
The Journal of Business, Entrepreneurship & the Law
This article examines the law of insider trading in both the American and Egyptian legal systems. It seeks to pinpoint the policy rationale behind prohibiting insider trading, the theories of civil enforcement and criminalization, and the concept of tipping in the United States. It also analyzes the express statutory prohibition under Egyptian law. Furthermore, it explains the doctrinal link between securities fraud and insider trading in the U.S. as well as the enforcement mechanisms in place at the SEC, the NYSE, and the NASDAQ. It also surveys the surveillance authority of the Egyptian Financial Regularity Authority and of the Egyptian …
The Social Costs Of Dividends And Share Repurchases, J.B. Heaton
The Social Costs Of Dividends And Share Repurchases, J.B. Heaton
The Journal of Business, Entrepreneurship & the Law
A long-held view in the academy is that shareholders are "residual claimants” in the sense that shareholders are paid in full only after the corporation pays its creditors. The reality on the ground is far different. Corporations give assets away to their shareholders long before they have satisfied creditors, both voluntary contract creditors and involuntary tort creditors. In particular, existing U.S. corporate and voidable transfer laws allow corporations to pay dividends and make share repurchases up to the point where the corporation is insolvent or nearly so. Voluntary creditors can limit dividends and share repurchases by contract, but involuntary creditors …
Crashing The Boards: A Comparative Analysis Of The Boxing Out Of Women On Boards In The United States And Canada, Diana C. Nicholls Mutter
Crashing The Boards: A Comparative Analysis Of The Boxing Out Of Women On Boards In The United States And Canada, Diana C. Nicholls Mutter
The Journal of Business, Entrepreneurship & the Law
This paper will first provide a critical, comparative look at the Canadian and the federal American responses to the under-representation of women on boards of large, publicly traded corporations. There will be a discussion about the competing conceptions which emerge in addressing the regulation of women on boards in the United States and Canada and why each jurisdiction implemented its policy when it did. The conceptions arising out of questions about under-representation of women on boards tend to fall within two categories: business case rationales and normative rationales. Given the competing conceptions of this issue, this paper will attempt to …
Direct Listing: How Spotify Is Streaming On The Nyse And Why The Sec Should Press Play, Cody L. Lipke
Direct Listing: How Spotify Is Streaming On The Nyse And Why The Sec Should Press Play, Cody L. Lipke
The Journal of Business, Entrepreneurship & the Law
This Note proposes that given Spotify’s successful launch on the NYSE, direct listings will become increasingly popular—primarily for start-ups but also as an exit strategy for VC and PE firms in their nonpublic investments. Part II of this Note will discuss the process of “going public” via an IPO or a direct listing. Part III will use Spotify as an illustrative example of the direct listing process. Part IV will consider the advantages and disadvantages of direct listing. Part V will conclude that the Securities and Exchange Commission (SEC or the Commission) should embrace the direct listing process and will …
The Perfect Storm Is Brewing Once Again: What Scaling Back Dodd-Frank Will Mean For The Credit Default Swap, Daniel Isaacson
The Perfect Storm Is Brewing Once Again: What Scaling Back Dodd-Frank Will Mean For The Credit Default Swap, Daniel Isaacson
The Journal of Business, Entrepreneurship & the Law
The current presidential administration has expressed a concerted desire to “scale back” and even “get rid of” the Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd–Frank). Focusing specifically on Dodd–Frank’s regulation of the credit default swap (CDS), this Article explores two timely queries. First, whether Dodd–Frank’s regulatory response to these financial instruments is a justifiable one, and second, what effect a repeal may have. This Article will show that the “perfect storm” CDS—which contributed so significantly to the 2007–2010 financial crisis—flourished in a regulatory environment that contained two key weaknesses: (1) few restrictions on excessive speculation; and (2) the …
To Be A "Whistleblower," Or Not To Be A "Whistleblower? " That Is The Question-Whether 'Tis Nobler In The Mind Of The Courts To Suffer For Reporting Wrongdoing To The Sec Or Employers Internally: Examining The Recent Circuit Split Regarding The Definition Of A Whistleblower Under Dodd-Frank, Luke I. Landers
The Journal of Business, Entrepreneurship & the Law
Under the current state of the law, the circuit courts are split over whether an employee must report corporate wrongdoing directly to the Securities and Exchange Commission (SEC), or report wrongdoing to a company’s management in order to receive whistleblower protection under Dodd–Frank. The resolution of this circuit split not only will have implications for American employees caught in situations similar to the fiction above, but also will provide a prime opportunity for the Supreme Court to clarify how courts are to understand the interpretive and deferential relationship between the language of legislative statutes and their corresponding bureaucratic regulations. In …
Regulating Moral Hazard: The True Risk Of Dodd-Frank's Risk Retention Requirement, Ethan T. Mobley
Regulating Moral Hazard: The True Risk Of Dodd-Frank's Risk Retention Requirement, Ethan T. Mobley
The Journal of Business, Entrepreneurship & the Law
Dodd–Frank was implemented in response to the Great Recession as a means to curb abuses on Wall Street. The Act mandated broad reform of the financial system, and in particular, required regulators to promulgate rules controlling the complex structure of Asset-Backed Security (ABS). Dodd–Frank required securitizers to retain a portion of the credit risk associated with ABS. The goal was to curb moral hazard—the market failure commonly blamed for the Financial Crisis. However, there is reason to believe Dodd–Frank may “not adequately address” the moral hazard problem. In Part I, this Article will set forth the nuts and bolts of …
The Legal Aspects Of Portfolio Margining: A Move Toward The Lsoc Model, Christian Chamorro-Courtland
The Legal Aspects Of Portfolio Margining: A Move Toward The Lsoc Model, Christian Chamorro-Courtland
The Journal of Business, Entrepreneurship & the Law
This Article focuses on the legal aspects of “portfolio margining” in the United States and their potential for reducing costs and facilitating the management of collateral for the participants involved. First, this Article outlines the level of protection that customer “margin” deposits receive in clearing systems using a Central Counterparty (CCP). Second, it explains the process of portfolio margining from a legal perspective and discusses the benefits of adopting these arrangements. Thirdly, it argues that adopting the “Legal Segregation and Operationally Commingled Model” (LSOC Model) in the futures industry can facilitate the implementation of portfolio margining. Finally, the conclusion explains …
Clarifying The Original Clawback: Interpreting Sarbanes-Oxley Section 304 Through The Lens Of Dodd-Frank Section 954, J. Royce Fichtner, Patrick Heaston, Lou Ann Simpson
Clarifying The Original Clawback: Interpreting Sarbanes-Oxley Section 304 Through The Lens Of Dodd-Frank Section 954, J. Royce Fichtner, Patrick Heaston, Lou Ann Simpson
The Journal of Business, Entrepreneurship & the Law
In the early 2000s, major accounting scandals involving reporting violations and audit failures sent the United States financial markets into turmoil. Congress and President George W. Bush reacted to the controversy by passing the Public Company Accounting Reform and Investor Protection Act, better known as the Sarbanes–Oxley Act (SOX), in July of 2002. Section 304 created an explicit procedure, whereby the SEC could disgorge or clawback a CEO or CFO’s incentive-based compensation or stock gains when such profits were based on inflated financial statements later required to be restated to reflect the company’s true financial position. When the stock market …
Credit Default Swaps And The Empty Creditor Hypothesis—If It Ain’T Broke, Don’T Fix It, Florian Gamper
Credit Default Swaps And The Empty Creditor Hypothesis—If It Ain’T Broke, Don’T Fix It, Florian Gamper
The Journal of Business, Entrepreneurship & the Law
An empty creditor is a creditor who, through the use of derivatives, especially credit default swaps (CDSs), takes a position where she retains the legal rights of a creditor but has little or no economic exposure to a borrower. Thus far, the debate on empty creditors has focused mainly on how the law should react to the perceived problem of empty creditors. The debate also covers the prominent argument that empty creditors violate the underlying corporate law assumption that creditors and shareholders hold their legal rights in proportion to their economic exposure to a company. This article argues that the …
Real Estate Crowdfunding – Modern Trend Or Restructured Investment Model?: Have The Sec’S Proposed Rules On Crowdfunding Created A Closed-Market System?, Cory Baker
The Journal of Business, Entrepreneurship & the Law
Crowdfunding is one of the fastest growing and most controversial segments of online purchasing and investing. Crowdfunding projects have been increasingly geared towards real estate development and are changing the scope of investment by enabling developers to solicit securities-based funding from the public. When the Securities and Exchange Commission (SEC) proposed its rules to allow crowdfunding under the Jumpstart Our Business Startups (JOBS) Act, it raised the issue of whether crowdfunding would be a viable option for building and owning large-scale projects. Offering developers new ways to finance projects, small investors a way in, and the socially conscious an avenue …
Drafting And Securitizing Participation Mortgages: A Re-Introduction, Spencer J. Coopchik, Yildiray Yildirim
Drafting And Securitizing Participation Mortgages: A Re-Introduction, Spencer J. Coopchik, Yildiray Yildirim
The Journal of Business, Entrepreneurship & the Law
This Paper will reintroduce, explore, and expand on the financing arrangement known as a Participation Mortgage. First, this Paper will cover the features, history, and policy purposes behind the mortgage. Second, the Paper will focus on legal mechanics and drafting considerations of Participation Mortgages, so they may later be securitized. Finally, the Paper will explore the possibility and legality of creating Participation Mortgaged Backed Securities to be sold in the secondary market.
Assessing Irving Picard’S Writ Of Certiorari In Picard V. Jp Morgan Chase: Another Chapter In The Saga Of Bernie Madoff And His Impact On The Securities Industry, Bryce Cullinane
The Journal of Business, Entrepreneurship & the Law
An objective analysis of Picard's writ shows the Second Circuit should be affirmed. Picard's arguments are long on emotional appeal and customer-centric public policy but short on the law. The Second Circuit decision is in line with the intent of Congress. Furthermore, adopting Picard's interpretation would raise many issues and create many problems in the financial services industry. Part II of this note provides background on SIPA and the Securities Investor Protection Corporation (SIPC), as well as Section 544 of the Code. Part III provides background on the Picard case, including a brief discussion of Madoff's scheme and Picard's work …
Deranged Disgorgement, James Tyler Kirk
Deranged Disgorgement, James Tyler Kirk
The Journal of Business, Entrepreneurship & the Law
This article seeks to explore the concept of equity embodied in the securities laws as intended by Congress. Accordingly, this article asks whether Congress intended to codify the traditional common law notions of equity in disgorgement, or is the SEC's disgorgement sui generis. To answer this question, the philosophy behind disgorgement is exhaustively fleshed out through a historical case analysis. Next, the article establishes what the author believes to be a new concept, the theory of regulatory equity. Following the establishment of this theory, the practice of offsetting disgorgement is analyzed to see whether it is faithful to this new …
Delaware Corporate Law Recognizes The Fundamental Validity Of The Forum Selection Bylaw: A Survey Of The Boilermakers Litigation, Zachary R. Cormier
Delaware Corporate Law Recognizes The Fundamental Validity Of The Forum Selection Bylaw: A Survey Of The Boilermakers Litigation, Zachary R. Cormier
The Journal of Business, Entrepreneurship & the Law
Boilermakers Local 154 Retirement Fund v. Chevron Corp. represents a new and important chapter in the relationship between the forum selection clause and modern business relations. A forum selection clause is “[a] contractual provision in which the parties establish the place (such as the country, state, or type of court) for specified litigation between them.” Forum selection clauses have most often been analyzed by courts within contractual relationships between businesses, or a business and its customers. The Boilermakers case sets important precedent for forum selection in an equally fundamental business relationship--the corporation and its stockholders. This article will survey the …
Governing The Corporate Insiders: Improving Regulation Fair Disclosure With More Robust Guidance And Stronger Penalties For Individual Executives, Christopher Ippoliti
Governing The Corporate Insiders: Improving Regulation Fair Disclosure With More Robust Guidance And Stronger Penalties For Individual Executives, Christopher Ippoliti
The Journal of Business, Entrepreneurship & the Law
This article discusses the history of Regulation Fair Disclosure (Regulation FD), the problems it was intended to remedy, the scope of the regulation, and acceptable methods of disclosing material information in compliance with the rule. Part III examines specific further guidance and two investigative reports issued by the United States Securities and Exchange Commission (SEC) impacting Regulation FD disclosures. In Part IV, this article sets forth a comprehensive analysis of all the specific enforcement actions pursued by the SEC and the penalties assessed against publicly traded companies and individuals for Regulation FD violations. Part V evaluates the effectiveness of the …
Unilateral Forum Selection Clauses In Corporate Bylaws: A Synopsis Of The Debate, Bryce Cullinane
Unilateral Forum Selection Clauses In Corporate Bylaws: A Synopsis Of The Debate, Bryce Cullinane
The Journal of Business, Entrepreneurship & the Law
No abstract provided.
The Short Road Home To Delaware: Boilermakers Local 154 Retirement Fund V. Chevron, Anne M. Tucker
The Short Road Home To Delaware: Boilermakers Local 154 Retirement Fund V. Chevron, Anne M. Tucker
The Journal of Business, Entrepreneurship & the Law
One of the biggest Delaware Supreme Court cases of 2013 wasn’t. The Delaware Court of Chancery opinion in Boilermakers Local 154 Retirement Fund v. Chevron Corp., upheld the enforceability of Delaware forum selection clause bylaws unilaterally adopted by corporate boards of directors. It was widely expected that the Delaware Supreme Court would uphold the Court of Chancery’s opinion. However, Plaintiffs dismissed their appeal and moved to dismiss their remaining claims in the Court of Chancery, leaving intact Chancellor Strine’s strong support of forum selection clauses. National Industries Group (Holding) v. Carlyle Investment Managements L.L.C. and TC Group, L.L.C., a 2013 …
Exploring The Standard Of Review Of Transactions With Controlling Shareholders After In Re Mfw Shareholders Litigation (Decided May 29th, 2013), Miriam Bitton, Odelia Minnes
Exploring The Standard Of Review Of Transactions With Controlling Shareholders After In Re Mfw Shareholders Litigation (Decided May 29th, 2013), Miriam Bitton, Odelia Minnes
The Journal of Business, Entrepreneurship & the Law
This Article will begin with a review of the MFW case, followed by a review of the judicial history prior to this decision. Then it will try to analyze, albeit partially, some of the reasons for why this judgment is timely and reasonable considering changes that occurred in the last decades. It will also address some of the courts' reasoning and its persuasiveness.
Lessons Of 2013: The Perils Of "Ready, Fire, Aim" And The Importance Of An Integrated Litigation Strategy In Corporate Governance Matters, Thad A. Davis, Leslie A. Wulff
Lessons Of 2013: The Perils Of "Ready, Fire, Aim" And The Importance Of An Integrated Litigation Strategy In Corporate Governance Matters, Thad A. Davis, Leslie A. Wulff
The Journal of Business, Entrepreneurship & the Law
No abstract provided.
Fall 2013 Symposium: Contemporary Trends In Corporate Litigation, Robert Anderson Iv, Myron T. Steele, Katherine J. Blair, Thad A. Davis, James R. Griffin, James J. Moloney
Fall 2013 Symposium: Contemporary Trends In Corporate Litigation, Robert Anderson Iv, Myron T. Steele, Katherine J. Blair, Thad A. Davis, James R. Griffin, James J. Moloney
The Journal of Business, Entrepreneurship & the Law
No abstract provided.
The Jobs Act: Encouraging Capital Formation But Not Ipos, Jesse Scott
The Jobs Act: Encouraging Capital Formation But Not Ipos, Jesse Scott
The Journal of Business, Entrepreneurship & the Law
This note will analyze several of the key provisions of the JOBS Act and their effect on raising capital for small growth companies. The scope of this note will exclude the Title III crowdfunding provisions, as there is already substantial discussion about the topic in the legal and business communities. Part II discusses the IPO registration process. Part III explores the JOBS Act and its effect on securities regulation. Specifically, this note will cover the Title I IPO on-ramp, the Title II changes to Regulation D, the Title IV changes to Regulation A and 144A, and finally the Title V …
Aml In The Spotlight: Compliance Risks For Broker-Dealers And Investment Advisers, John H. Walsh, Cecilia Baute Mavico
Aml In The Spotlight: Compliance Risks For Broker-Dealers And Investment Advisers, John H. Walsh, Cecilia Baute Mavico
The Journal of Business, Entrepreneurship & the Law
In light of regulators' renewed attention, this article discusses recent events, reviews AML enforcement actions against securities firms, and identifies the compliance risks they suggest. The article concludes that the time has come for broker-dealers and advisers alike to take a holistic view of compliance and their AML risks, and to prepare for enhanced oversight and regulation.
Ceo & Employee Pay Discrepancy: How The Government's Policies Have Encouraged The Gap, David R. Meals
Ceo & Employee Pay Discrepancy: How The Government's Policies Have Encouraged The Gap, David R. Meals
The Journal of Business, Entrepreneurship & the Law
This paper examines the role of the U.S. Government in the CEO versus worker pay gap, both in contributing to its creation and the ability to reverse it. To better understand this issue, this paper includes a survey of current U.S. and foreign CEO compensation practices, a survey of theories proposed to explain the divergence between U.S. and foreign CEO compensation, a review of the social and business impact of excessive CEO compensation, and identifies socioeconomic theories regarding the excessive CEO pay trend. This is followed by a review of the history of attempted solutions along with newly enacted and …
Drastic Times Call For Drastic Risk Measures: Why Value-At-Risk Is (Still) A Flawed Preventative Of Financial Crises And What Regulators Can Do About It, Andrew L. Mcelroy
Drastic Times Call For Drastic Risk Measures: Why Value-At-Risk Is (Still) A Flawed Preventative Of Financial Crises And What Regulators Can Do About It, Andrew L. Mcelroy
The Journal of Business, Entrepreneurship & the Law
Bank regulators recently proposed the most fundamental reforms to U.S. banking law in decades, yet the value-at-risk statistic--replete with known deficiencies--remains the basis of the capital adequacy requirement. Consequently, there exists an unresolved tension in the law: the purpose of the banking rules is to require riskier financial institutions to hold additional capital, yet the value-at-risk statistic used to make this assessment induces a perverse incentive to hold the riskiest securities. Overlaid on this framework is the wide latitude afforded to banks in designing their value-at-risk models. This Article explores foreseeable issues with the regulatory reliance on value-at-risk. Moreover, it …
Unfinished Business: Dodd-Frank's Whistleblower Anti-Retaliation Protections Fall Short For Private Companies And Their Employees, Chelsea Hunt Overhuls
Unfinished Business: Dodd-Frank's Whistleblower Anti-Retaliation Protections Fall Short For Private Companies And Their Employees, Chelsea Hunt Overhuls
The Journal of Business, Entrepreneurship & the Law
The Sarbanes-Oxley Act of 2002 (“SOX”) revolutionized the world of securities law whistleblowing. It encouraged employees to reveal corporate fraud by providing federal anti-retaliation protection to incentivize such reports. Securities law whistleblowing was transformed a second time in 2010 when Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). Under Dodd-Frank, employees that report information to the Securities and Exchange Commission (“SEC”) are not only provided federal anti-retaliation protections but also are eligible for a hefty bounty. Two major differences separate these statutes: (1) SOX is limited to employees of companies who are subject to the reporting …
The Quest For Financial Regulatory Reform: Will A Uniform Fiduciary Standard Guide The Way?, Bonnie M. Treichel
The Quest For Financial Regulatory Reform: Will A Uniform Fiduciary Standard Guide The Way?, Bonnie M. Treichel
The Journal of Business, Entrepreneurship & the Law
No abstract provided.
The Rating Agencies: Where We Have Been And Where Do We Go From Here?, Joshua D. Krebs
The Rating Agencies: Where We Have Been And Where Do We Go From Here?, Joshua D. Krebs
The Journal of Business, Entrepreneurship & the Law
The credit rating agencies are supposed to be gatekeepers to the public securities markets. As “gatekeepers,” they are reputational intermediaries in the investment process. Other gatekeepers include: independent auditors, credit rating agencies, securities analysts, investment bankers, and attorneys. The function of these reputational intermediaries is to act as neutral third party advisors to the investment process. While these intermediaries are paid for their opinions by one or more parties to a transaction, in theory the opinions will be neutral. This is due to the thought that any resulting reputational damage from non-neutral opinions would severely damage long-term profitability, in exchange …
L3cs: The Next Big Wave In Socially Responsible Investing Or Just Simply Too Good To Be True?, David J. Schwister
L3cs: The Next Big Wave In Socially Responsible Investing Or Just Simply Too Good To Be True?, David J. Schwister
The Journal of Business, Entrepreneurship & the Law
No abstract provided.