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Full-Text Articles in Securities Law
The Reasonable Investor Of Federal Securities Law, Amanda Rose
The Reasonable Investor Of Federal Securities Law, Amanda Rose
Vanderbilt Law School Faculty Publications
Federal securities law defines the materiality of corporate disclosures by reference to the views of a hypothetical reasonable investor. For decades the reasonable investor standard has been a flashpoint for debate with critics complaining of the uncertainty it generates and defenders warning of the under-inclusiveness of bright-line alternatives. This Article attempts to shed fresh light on the issue by considering how the reasonable investor differs from its common law antecedent, the reasonable person of tort law. The differences identified suggest that the reasonable investor standard is more costly than tort laws reasonable person standard - the uncertainty it generates is …
Form Vs. Function In Rule 10b-5 Class Actions, Amanda M. Rose
Form Vs. Function In Rule 10b-5 Class Actions, Amanda M. Rose
Vanderbilt Law School Faculty Publications
The Supreme Court’s widely anticipated decision last term in Halliburton Co. v. Erica P. John Fund, Inc. did little to change the fundamental landscape of securities fraud litigation in the United States. Rule 10b-5 class actions premised on the “fraud-on-the-market” presumption of reliance may still be brought, although it is now clear that defendants may present evidence of lack of price distortion to rebut that presumption at the class certification stage. Halliburton does, however, raise a variety of new questions that will keep plaintiffs’ lawyers and defense counsel fighting for years to come. Determining the answers to these questions will …
Better Bounty Hunting, Amanda Rose
Better Bounty Hunting, Amanda Rose
Vanderbilt Law School Faculty Publications
The SEC’s new whistleblower bounty program has provoked significant controversy. That controversy has centered on the failure of the implementing rules to make internal reporting through corporate compliance departments a prerequisite to recovery. This Article approaches the new program with a broader lens, examining its impact on the longstanding debate over fraud-on-the-market (FOTM) class actions. The Article demonstrates how the bounty program, if successful, will replicate the fraud deterrence benefits of FOTM class actions while simultaneously increasing the costs of such suits — rendering them a pointless yet expensive redundancy. If instead the SEC proves incapable of effectively administering the …
Setting Attorneys' Fees In Securities Class Actions: An Empirical As, Lynn A. Baker, Michael A. Perino, Charles Silver
Setting Attorneys' Fees In Securities Class Actions: An Empirical As, Lynn A. Baker, Michael A. Perino, Charles Silver
Vanderbilt Law Review
n 1995, Congress overrode President Bill Clinton's veto and enacted the Private Securities Litigation Reform Act ("PSLRA"), a key purpose of which was to put securities class actions under the control of institutional investors with large financial stakes in the outcome of the litigation.' The theory behind this policy, set out in a famous article by Professors Elliot Weiss and John Beckerman, was simple: self-interest should encourage investors with large stakes to run class actions in ways that maximize recoveries for all investors. These investors should naturally want to hire good lawyers, incentivize them properly, monitor their actions, and reject …
The Multienforcer Approach To Securities Fraud Deterrence: A Critical Analysis, Amanda Rose
The Multienforcer Approach To Securities Fraud Deterrence: A Critical Analysis, Amanda Rose
Vanderbilt Law School Faculty Publications
Participants in the U.S. capital markets can be sued for securities fraud by a mishmash of enforcers, including the SEC, class action plaintiffs, and state regulators. Does this multi-enforcer approach make sense from a deterrence perspective? This Article suggests that the answer is probably no. Although in theory there are conditions under which a multi-enforcer approach would promote optimal deterrence, it is unclear at best that those conditions exist in the United States. And further empirical research, while warranted, is unlikely to resolve the issue definitively. The status quo tends to persevere in the face of this sort of irreducible …
Mapping The American Shareholder Litigation Experience, Randall Thomas, James D. Cox
Mapping The American Shareholder Litigation Experience, Randall Thomas, James D. Cox
Vanderbilt Law School Faculty Publications
In this paper, we provide an overview of the most significant empirical research that has been conducted in recent years on the public and private enforcement of the federal securities laws. The existing studies of the U.S. enforcement system provide a rich tapestry for assessing the value of enforcement, both private and public, as well as market penalties for fraudulent financial reporting practices. The relevance of the U.S. experience is made broader by the introduction through the PSLRA in late 1995 of new procedures for the conduct of private suits and the numerous efforts to evaluate the effects of those …
There Are Plaintiffs And ... There Are Plaintiffs: An Empirical Analysis Of Securities Class Action Settlements, James D. Cox, Randall S. Thomas, Lynn Bai
There Are Plaintiffs And ... There Are Plaintiffs: An Empirical Analysis Of Securities Class Action Settlements, James D. Cox, Randall S. Thomas, Lynn Bai
Vanderbilt Law Review
Reform of the securities class action is once again the subject of national debate. The impetus for this debate is the reports of three different groups-the Committee on Capital Market Regulation,' the Commission on the Regulation of U.S. Capital Markets in the 21st Century, and McKinsey & Company.3 Each of the reports focuses on a single theme: how the contemporary regulatory culture places U.S. capital markets at a competitive disadvantage to foreign markets. While the reports target multiple regulatory forces in their calls for reform, each report singles out securities class actions as one of the prime villains that place …
Public Pension Funds As Shareholder Activists: A Comment On Choi And Fisch, Randall Thomas
Public Pension Funds As Shareholder Activists: A Comment On Choi And Fisch, Randall Thomas
Vanderbilt Law School Faculty Publications
No abstract provided.
Does The Plaintiff Matter? An Empirical Analysis Of Lead Plaintiffs In Securities Class Actions, Randall Thomas, James D. Cox
Does The Plaintiff Matter? An Empirical Analysis Of Lead Plaintiffs In Securities Class Actions, Randall Thomas, James D. Cox
Vanderbilt Law School Faculty Publications
The PSLRA's lead plaintiff provision was adopted in order to encourage large shareholders with claims in a securities fraud class action to step forward to become the class' representative. Congress' expectation was that these investors would actively monitor the conduct of a securities fraud class action so as to reduce the litigation agency costs that may arise when class counsel's interests diverge from those of the shareholder class. Proponents of the provision claimed that there would be substantial benefits from having institutional investors serve as lead plaintiffs. Now, ten years later, the claim that the lead plaintiff is a more …