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Articles 1 - 5 of 5
Full-Text Articles in Securities Law
The Conflicted Advice Problem: A Response To Conflicts & Capital Allocation, Gina-Gail S. Fletcher
The Conflicted Advice Problem: A Response To Conflicts & Capital Allocation, Gina-Gail S. Fletcher
Faculty Scholarship
No abstract provided.
Central Clearing Of Financial Contracts: Theory And Regulatory Implications, Steven L. Schwarcz
Central Clearing Of Financial Contracts: Theory And Regulatory Implications, Steven L. Schwarcz
Faculty Scholarship
To protect economic stability, post-crisis regulation requires financial institutions to clear and settle most of their derivatives contracts through central counterparties, such as clearinghouses associated with securities exchanges. This Article asks whether regulators should expand the central clearing requirement to non-derivative financial contracts, such as loan agreements. The Article begins by theorizing how and why central clearing can reduce systemic risk. It then examines the theory’s regulatory and economic efficiency implications, first for current requirements to centrally clear derivatives contracts and thereafter for deciding whether to extend those requirements to non-derivative contracts. The inquiry has real practical importance because the …
Revolving Elites: The Unexplored Risk Of Capturing The Sec, James D. Cox, Randall S. Thomas
Revolving Elites: The Unexplored Risk Of Capturing The Sec, James D. Cox, Randall S. Thomas
Faculty Scholarship
Fears have abounded for years that the sweet spot for capture of regulatory agencies is the "revolving door" whereby civil servants migrate from their roles as regulators to private industry. Recent scholarship on this topic has examined whether America's watchdog for securities markets, the Securities and Exchange Commission (SEC), is hobbled by the long-standing practices of its enforcement staff exiting their jobs at the Commission and migrating to lucrative private sector employment where they represent those they once regulated. The research to date has been inconclusive on whether staff revolving door practices have weakened the SEC' s verve. In this …
Engineered Credit Default Swaps: Innovative Or Manipulative?, Gina-Gail S. Fletcher
Engineered Credit Default Swaps: Innovative Or Manipulative?, Gina-Gail S. Fletcher
Faculty Scholarship
Credit default swaps (“CDS”) are, once again, making waves. Maligned for their role in the 2008 financial crisis and condemned by the Vatican, investors are once more utilizing CDS to achieve results of questionable market benefit. A CDS is a financial contract that allows investors to “bet” on whether a borrower will default on its loan. However, rather than waiting to see how their bets pan out, some CDS investors are collaborating with financially distressed borrowers to guarantee the profitability of their CDS positions—“engineering” the CDS’ outcome. Under the CDS contract, these collaborations are not prohibited, yet they have roiled …
The Enduring Distinction Between Business Entities And Security Interests, Ofer Eldar, Andrew Verstein
The Enduring Distinction Between Business Entities And Security Interests, Ofer Eldar, Andrew Verstein
Faculty Scholarship
What are business entities for? What are security interests for? The prevailing answer in legal scholarship is that both bodies of law exist to partition assets for the benefit of designated creditors. But if both bodies of law partition assets, then what distinguishes them? In fact, these bodies of law appear to be converging as increasing flexibility irons out any differences. Indeed, many legal products, such as securitization vehicles, insurance products known as captive insurance, and mutual funds, employ entities to create distinct asset pools. Moreover, recent legal innovations, such as “protected cells,” which were created to facilitate such products, …