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Securities Law Commons

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2004

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Articles 1 - 30 of 78

Full-Text Articles in Securities Law

No Good Deed Goes Unpunished? Establishing A Self-Evaluating Privilege For Corporate Internal Investigations, Theodore R. Lotchin Dec 2004

No Good Deed Goes Unpunished? Establishing A Self-Evaluating Privilege For Corporate Internal Investigations, Theodore R. Lotchin

William & Mary Law Review

No abstract provided.


Whistling In The Dark? Corporate Fraud, Whistleblowers, And The Implications Of The Sarbanes-Oxley Act For Employment Law, Miriam A. Cherry Nov 2004

Whistling In The Dark? Corporate Fraud, Whistleblowers, And The Implications Of The Sarbanes-Oxley Act For Employment Law, Miriam A. Cherry

Washington Law Review

Passed in 2002 in the wake of the accounting scandals that resulted in billions of dollars of lost value to shareholders, the Sarbanes-Oxley Act has as its major goal the prevention of corporate corruption. This Article analyzes the impact of section 806, the portion of the Sarbanes-Oxlcy Act that provides protections for employees who report securities fraud, and describes the effect that Sarbanes-Oxley has on existing employment law. In addition, this Article contributes to the debate over the general effectiveness of the Sarbanes-Oxley Act, a topic of contention among both academics and press commentators. This Article argues that the Act ...


Preemption Under The Securities Litigation Uniform Standards Act: If It Looks Like A Securities Fraud Claim And Acts Like A Securities Fraud Claim, Is It A Securities Fraud Claim?, Jennifer O'Hare Oct 2004

Preemption Under The Securities Litigation Uniform Standards Act: If It Looks Like A Securities Fraud Claim And Acts Like A Securities Fraud Claim, Is It A Securities Fraud Claim?, Jennifer O'Hare

Working Paper Series

This Article addresses the removal and preemption provisions of the Securities Litigation Uniform Standards Act of 1998 (“SLUSA”). In SLUSA, Congress preempted class actions alleging “an untrue statement or omission of a material fact in connection with the purchase or sale of a covered security.” SLUSA clearly applies to preempt the typical state securities fraud action, forcing plaintiffs into federal court where they will be subject to the rigorous procedural requirements of the Private Securities Litigation Reform Act of 1995. Preemption of false corporate publicity cases was expected and, in fact, intended by SLUSA. However, many courts have also extended ...


The Evidence On Securities Class Actions, Stephen J. Choi Oct 2004

The Evidence On Securities Class Actions, Stephen J. Choi

Vanderbilt Law Review

Shareholders of large publicly held corporations face a well- known collective action problem. To the extent an individual shareholder bears all the costs of activities that benefit the entire group of shareholders (giving the individual shareholder only a fraction of the benefits), the individual shareholder will have marginal incentive to pursue such collective activities. Corporations owe their shareholders specific duties and rights. However, due to the collective action problem, no single shareholder may seek to litigate these rights. In the context of the federal securities laws within the United States, the U.S. regime provides a solution: private class actions ...


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.


Technological Evolution And The Devolution Of Corporate Financial Reporting, Donald C. Langevoort Oct 2004

Technological Evolution And The Devolution Of Corporate Financial Reporting, Donald C. Langevoort

William & Mary Law Review

No abstract provided.


A Model Financial Statement Insurance Act, Lawrence A. Cunningham Sep 2004

A Model Financial Statement Insurance Act, Lawrence A. Cunningham

Boston College Law School Faculty Papers

Building on companion work investigating the efficacy of financial statement insurance (FSI) as an alternative to traditional auditor liability, this Article presents the terms of a national enabling statute to implement this concept. The Model Financial Statement Insurance Act uses the architecture of the U.S. Trust Indenture Act of 1939. It authorizes issuer application for qualification, in connection with annual proxy statement filings, of policies of financial statement insurance. The Model FSI Act deems a series of provisions necessary to achieve securities law objectives to be part of all financial statement insurance policies so proposed, and requires insurers to ...


Future-Priced Convertible Securities & The Outlook For "Death-Spiral" Securities-Fraud Litigation, Zachary T. Knepper Aug 2004

Future-Priced Convertible Securities & The Outlook For "Death-Spiral" Securities-Fraud Litigation, Zachary T. Knepper

ExpressO

No abstract provided.


Analyst And Broker Dealer Liability Under 10(B) For Biased Stock Recommendations, Ann Morales Olazabal Aug 2004

Analyst And Broker Dealer Liability Under 10(B) For Biased Stock Recommendations, Ann Morales Olazabal

ExpressO

In the aftermath of the turn-of-the-millennium Wall Street scandals, class action suits have been brought by thousands of investors against securities analysts and their broker-dealer employers, based upon stock research and recommendations that were allegedly biased by such conflicts of interest as analysts' ownership interest in researched stocks or other relationships between analysts and issuers, and the fact analysts’ compensation was tied to their ability to generate investment banking business from issuers. This work exhaustively analyzes federal 10(b) liability for misleading representations and omissions in this context, through the prism of existing general securities fraud precedent, scant existing authority ...


Expensing Isn't The Only Option: Alternatives To The Fasb's Stock Option Expensing Proposal, Benjamin A. Templin Aug 2004

Expensing Isn't The Only Option: Alternatives To The Fasb's Stock Option Expensing Proposal, Benjamin A. Templin

ExpressO

This paper reviews the arguments for and against the Financial Accounting Standard Board's (FASB) proposal to require that corporations expense options. It identifies two major goals of the proposed rule -- 1) clarity in financial statements and 2) a reduction of corporate fraud by removing the incentive of options. To address these two goals, I adopt a framework of Information Reforms v. Rules of the Game Reforms. The article starts with a history of FASB Statement No. 123 Accounting for Stock-based Compensation and also analyzes the Congressional legislation that attempts to block the measure, the Stock Option Accounting Reform Act ...


A Model Financial Statement Insurance Act, Lawrence A. Cunningham Jul 2004

A Model Financial Statement Insurance Act, Lawrence A. Cunningham

ExpressO

No abstract provided.


Revisiting The Role Of The Future In Accounting Reform, Lawrence A. Cunningham Jul 2004

Revisiting The Role Of The Future In Accounting Reform, Lawrence A. Cunningham

ExpressO

Overlooked in accounting-reform debate emanating from recent financial reporting scandals is the role of forward-looking disclosure inaugurated in the late 1970s and expanded throughout the 1980s and 1990s. Debate centered on whether accounting concepts developed during this period were too rule-bound. An SEC study largely resolved this debate by characterizing US GAAP as a mix of rules and principles embedded in an objectives-based accounting system. The SEC expressed a slight preference for principles over rules in future accounting standard-setting. Some see this resolution as transformative. This Article considers how it may disguise a false dichotomy likely providing false catharsis. Underappreciated ...


Was Arthur Andersen Different? An Empirical Examination Of Major Accounting Firm Audits Of Large Clients, Theodore Eisenberg, Jonathan R. Macey Jul 2004

Was Arthur Andersen Different? An Empirical Examination Of Major Accounting Firm Audits Of Large Clients, Theodore Eisenberg, Jonathan R. Macey

Cornell Law Faculty Publications

Enron and other corporate financial scandals focused attention on the accounting industry in general and on Arthur Andersen in particular. Part of the policy response to Enron, the criminal prosecution of Andersen eliminated one of the few major audit firms capable of auditing many large public corporations. This article explores whether Andersen’s performance, as measured by frequency of financial restatements, measurably differed from that of other large auditors. Financial restatements trigger significant negative market reactions and their frequency can be viewed as a measure of accounting performance. We analyze the financial restatement activity of approximately 1,000 large public ...


Choosing Gatekeepers: The Financial Statement Insurance Alternative To Auditor Liability, Lawrence A. Cunningham Jun 2004

Choosing Gatekeepers: The Financial Statement Insurance Alternative To Auditor Liability, Lawrence A. Cunningham

Boston College Law School Faculty Papers

Positioned in a lively current debate concerning how to design auditor incentives to optimize financial statement auditing, this Article presents the more ambitious financial statement insurance alternative. This breaks from the existing securities regulation framework to draw directly on insurance markets and law. Based on upon an evaluation of major structural and policy-related features of the concept, the assessment prescribes a framework to permit companies, on an experimental-basis and with investor approval, to use financial statement insurance as an optional alternative to the existing model of financial statement auditing backed by auditor liability. The financial statement insurance concept, pioneered by ...


Choosing Gatekeepers: The Financial Statement Insurance Alternative To Auditor Liabilty, Lawrence A. Cunningham Jun 2004

Choosing Gatekeepers: The Financial Statement Insurance Alternative To Auditor Liabilty, Lawrence A. Cunningham

ExpressO

Positioned in a lively current debate concerning how to design auditor incentives to optimize financial statement auditing, this Article presents the more ambitious financial statement insurance alternative. This breaks from the existing securities regulation framework to draw directly on insurance markets and law. Based on upon an evaluation of major structural and policy-related features of the concept, the assessment prescribes a framework to permit companies, on an experimental-basis and with investor approval, to use financial statement insurance as an optional alternative to the existing model of financial statement auditing backed by auditor liability.

The financial statement insurance concept, pioneered by ...


Reconsidering The Prohibition Against General Solicitation During Section 3(C)(7) Offerings, Daniel P. Taub May 2004

Reconsidering The Prohibition Against General Solicitation During Section 3(C)(7) Offerings, Daniel P. Taub

ExpressO

This paper examines the seventy year history of the general solicitation prohibition during private offerings and then analyzes its continuing relevance as applied to Section 3(c)(7) offerings. The S.E.C. Staff recently issued a report questioning the continuing value of prohibiting general solicitation during private offerings made pursuant to Section 3(c)(7) of the Investment Company Act. If the S.E.C. were to follow the recommendation in the S.E.C. Staff Report, this would have tremendous implications for a growing number of hedge funds, and other investment companies utilizing the Section 3(c)(7 ...


International Law And The Ramifications Of The Sarbanes-Oxley Act Of 2002 , Jonathan Shirley May 2004

International Law And The Ramifications Of The Sarbanes-Oxley Act Of 2002 , Jonathan Shirley

Boston College International and Comparative Law Review

This Note examines the international implications of the Sarbanes-Oxley Act of 2002 (SOX). First, it identifies the relevant provisions of SOX and its impact on securities regulation generally. Second, it discusses how SOX impacts foreign companies that list securities on U.S. exchanges. Third, it analyzes how SOX is different from other U.S. securities regulations and discusses the consequences of its extraterritorial application.


The Plight Of The Private Securities Litigation Reform Act In The Post-Enron Era: The Ninth Circuit's Interpretation Of Materiality In Employer-Teamster V. America West, Patrick Hall May 2004

The Plight Of The Private Securities Litigation Reform Act In The Post-Enron Era: The Ninth Circuit's Interpretation Of Materiality In Employer-Teamster V. America West, Patrick Hall

BYU Law Review

No abstract provided.


Securing Truth For Power: Informational Strategy And Regulatory Policy Making, Cary Coglianese Apr 2004

Securing Truth For Power: Informational Strategy And Regulatory Policy Making, Cary Coglianese

ExpressO

No abstract provided.


Facilitating Auditing’S New Early Warning System: Control Disclosure, Auditor Liability And Safe Harbors, Lawrence A. Cunningham Apr 2004

Facilitating Auditing’S New Early Warning System: Control Disclosure, Auditor Liability And Safe Harbors, Lawrence A. Cunningham

ExpressO

This Article considers the interplay between new auditing standards governing audits of internal control over financial reporting and pre-existing legal standards governing auditor liability for audit failure. The interplay produces skewed liability incentives that, if unadjusted, threaten to impair the objective of this new control-audit regime. The regime’s objective is, in part, to provide an early warning to financial statement users when current financial statements are reliable but control weaknesses indicate material risk of a company’s future inability to produce reliable financial statements. To be meaningful, auditor disclosure of material weaknesses and potential effects is necessary.

While liability ...


Facilitating Auditing’S New Early Warning System: Control Disclosure, Auditor Liability And Safe Harbors, Lawrence A. Cunningham Apr 2004

Facilitating Auditing’S New Early Warning System: Control Disclosure, Auditor Liability And Safe Harbors, Lawrence A. Cunningham

Boston College Law School Faculty Papers

This Article considers the interplay between new auditing standards governing audits of internal control over financial reporting and pre-existing legal standards governing auditor liability for audit failure. The interplay produces skewed liability incentives that, if unadjusted, threaten to impair the objective of this new control-audit regime. The regime’s objective is, in part, to provide an early warning to financial statement users when current financial statements are reliable but control weaknesses indicate material risk of a company’s future inability to produce reliable financial statements. To be meaningful, auditor disclosure of material weaknesses and potential effects is necessary. While liability ...


What Counts As Fraud? An Empirical Study Of Motions To Dismiss Under The Private Securities Litigation Reform Act, Adam C. Pritchard Apr 2004

What Counts As Fraud? An Empirical Study Of Motions To Dismiss Under The Private Securities Litigation Reform Act, Adam C. Pritchard

ExpressO

No abstract provided.


Reassessing The Scope Of Conduct Prohibited By Section 10(B) And The Elements Of Rule 10b-5: Reflections On Securities Fraud And Secondary Actors, Andrew S. Gold Apr 2004

Reassessing The Scope Of Conduct Prohibited By Section 10(B) And The Elements Of Rule 10b-5: Reflections On Securities Fraud And Secondary Actors, Andrew S. Gold

Faculty Scholarship

No abstract provided.


The Securities And Exchange Commission Goes Abroad To Regulate Corporate Governance, Roberta S. Karmel Apr 2004

The Securities And Exchange Commission Goes Abroad To Regulate Corporate Governance, Roberta S. Karmel

Faculty Scholarship

No abstract provided.


Securities Supervision And Judicial Review [In China], Zhongle Zhan, Fengying Li, Inseon Paik Apr 2004

Securities Supervision And Judicial Review [In China], Zhongle Zhan, Fengying Li, Inseon Paik

Washington International Law Journal

Since its founding in 1992, the China Securities Regulatory Commission ("CSRC") has, by the design of the central government of China, become the primary regulator of the Chinese securities market. The CSRC has, however, made some controversial decisions in enforcing its securities regulations. In particular, this article addresses the legal implications of the CSRC's failure to comply with controlling securities regulations in rejecting the Hainan Kaili Central Construction Company's listing application and the ramifications of such selective regulatory enforcement. The article provides an analysis of the current relationship between Chinese administrative and securities law.


Let The Money Do The Governing: The Case For Reuniting Ownership And Control, Usha Rodrigues Apr 2004

Let The Money Do The Governing: The Case For Reuniting Ownership And Control, Usha Rodrigues

Scholarly Works

Part I of the Article outlines the problems with the current method of board selection and functioning. Management or management-sympathetic board members often select the board nominees, who share social ties with other board members. Boards tend to avoid "rocking the boat" by questioning management's recommendations, and because of the way the proxy process is structured, shareholders cannot effectively use their votes to oust unsatisfactory board members.

Part II analyzes the SEC's recent proposals for reform, which center on granting shareholders more opportunities to nominate candidates to the board. These proposals attempt to give shareholders a greater voice ...


Gentleman's Agreement: The Antisemitic Origins Of Restrictions On Stockholder Litigation, Lawrence E. Mitchell Mar 2004

Gentleman's Agreement: The Antisemitic Origins Of Restrictions On Stockholder Litigation, Lawrence E. Mitchell

ExpressO

A deeply ingrained, seemingly ineradicable, hostility to plaintiffs’ lawyers and especially to plaintiffs’ lawyers in stockholder suits seems to have existed for most of the past century. This hostility is manifest not only in the tone of judicial opinions but in law review articles, the popular press, and, often, in legislation. This article analyzes the circumstances under which the first security-for-expense statute was adopted in New York in 1944, including the contemporaneous justification for the statute, focusing on the demographics of the New York bar at the time and the ethnic sociology of New York. In so doing, it concludes ...


A New Product For The Corporation Law Market: Audit Committee Certifications, Lawrence A. Cunningham Mar 2004

A New Product For The Corporation Law Market: Audit Committee Certifications, Lawrence A. Cunningham

ExpressO

In the swirling corporate governance reforms led by SOX, the SEC, SROs and PCAOB, Delaware and other states are playing minor roles at best. State absence creates a missing arc in the evolving US corporate governance circle. The circle is drawn as follows: state corporation law charges boards of directors with managing corporations and authorizes board committees; SOX charges audit committees with tasks, including supervising external auditors; SROs require audit committee characteristics like independence and compel disclosure; PCAOB requires external auditors to evaluate audit committee effectiveness. This last step could close the circle except that auditors performing this evaluation generate ...


Comparisons Among Firms: (When) Do They Justify Mandatory Disclosure?, Sharon Hannes Feb 2004

Comparisons Among Firms: (When) Do They Justify Mandatory Disclosure?, Sharon Hannes

ExpressO

Comparisons among firms play a major role in securities analysis. This essay asks if this fact justifies the mandatory nature of securities regulation. Once a firm approaches the public securities markets, federal securities regulations compel it to disclose financial information to the public. A seminal theory argues that firms would not otherwise commit to maintain optimal disclosure levels, since a disclosing firm bears all disclosure costs but does not gain all disclosure benefits.

This paper examines the robustness of this argument in relation to disclosure benefits which arise from comparisons among firms. Financial data of peer firms allows shareholders to ...


Public Company Shareholders Acting As Owners: Three Reforms--Introducing The "Oversight Shareholder" (With E. Fogel & D. Addis), Edward C. Harris Feb 2004

Public Company Shareholders Acting As Owners: Three Reforms--Introducing The "Oversight Shareholder" (With E. Fogel & D. Addis), Edward C. Harris

All Faculty Scholarship

No abstract provided.