Securities Law Commons^™

The Obligations And Regulatory Challenges Of Online Broker-Dealers And Trading Platforms, Christine Lazaro, Teresa J. Verges

Faculty Publications

(Excerpt)

Investing has been evolving for decades. On “Mayday” in 1975, the SEC abolished fixed commissions, changing the face of the brokerage industry. A few months later, Charles Schwab opened its first offices, and discount brokerages were born. By the mid-1980s, there were over 600 discount brokers operating. By 1990, discount brokerage firms captured just under than 10% of the market, although Charles Schwab captured 40% of the discount brokerage market. Throughout the 1990s, new firms entered the market, including E*Trade and AmeriTrade. Online trading became more prevalent; by 1999 25% of all trades occurred online. The term “day trader” …

Community-Investor Negotiation Guide 2: Negotiating Contracts With Investors, Sam Szoke-Burke, Rachael Knight, Kaitlin Y. Cordes, Tehtena Mebratu-Tsegaye, Marena Brinkhurst

Columbia Center on Sustainable Investment Staff Publications

Deciding whether or not to allow an investor to use community lands and natural resources is one of the most important decisions a community can make. If an investment project is carried out in a respectful and inclusive way, it may help community members to achieve their development goals, which may include creating jobs and local economic opportunities. But investments come with risks. Investment projects may make the land that community members need for farming and other livelihood activities unavailable for some time. They may pollute local rivers, lakes, air, and soils, or block access to sacred areas or water …

Community-Investor Negotiation Guide 1: Preparing In Advance For Potential Investors, Rachael Knight, Kaitlin Y. Cordes, Sam Szoke-Burke, Tehtena Mebratu-Tsegaye, Marena Brinkhurst

Columbia Center on Sustainable Investment Staff Publications

Deciding whether or not to allow an investor to use community lands and natural resources is one of the most important decisions a community can make. If an investment project is carried out in a respectful and inclusive way, it may help community members to achieve their development goals, which may include creating jobs and local economic opportunities. But investments come with risks. Investment projects may make the land that community members need for farming and other livelihood activities unavailable for some time. They may pollute local rivers, lakes, air, and soils, or block access to sacred areas or water …

Loss Causation, Economic Loss Rules And Offset Defenses – Dismissal Motion Practice After Acticon A.G. V. China North East Petroleum Holdings Ltd., Laurence A. Steckman, Robert E. Conner, Kris Steckman Taylor

Touro Law Review

No abstract provided.

Exculpatory Hedge Clauses In Investment Advisory Contracts: Developments Since Heitman Capital, Francis J. Facciolo, Leland Solon

Faculty Publications

The Investment Company Act of 1940 (ICA) and the Investment Advisers Act of 1940 (IAA) prevent an investment adviser from contractually limiting liability to its advisees through three main routes: statutory anti-waiver prohibitions, the IAA’s anti-fraud provisions, and limitations on indemnification by registered investment companies of their investment advisers. This article focuses on one of these three areas, the IAA’s anti-fraud provisions, and specifically, the SEC’s expansive interpretations of those anti-fraud provisions to cover exculpatory “hedge clauses” – caveats or cautionary statements – by investment advisers purporting to limit their liability to their advisees.

Advising The Individual Investor: Comparing The Federal Regulation Of Investment Advisers, Banks, And Broker-Dealers, Alan M. Ahart

Pepperdine Law Review

No abstract provided.

Revising Federal Securityholder Communication Rules To Respond To Pension Funds' Increasing Market Presence, Kenneth R. Lehman

Pepperdine Law Review

No abstract provided.

Devil In The Bidding Detail, Lisa E. Sachs, Jacky Mandelbaum, Perrine Toledano

Columbia Center on Sustainable Investment Staff Publications

In light of the recent boom in natural resource prices, India is one of them many countries facing heightened scrutiny of the allocation and terms of their resource deals. In India, that scrutiny has uncovered a multi-billion dollar controversy over coal block allocations that has gridlocked Parliament. More generally, citizens in resource-producing countries around the world are asking whether the public is getting a fair value for their countries resources, or whether investors and politicians are walking away with the prize. Finally, the important questions are being asked: how should resources be managed to ensure that they benefit the citizenry, …

Regulation A And The Jobs Act: A Failure To Resuscitate, Rutheford B. Campbell Jr.

Law Faculty Scholarly Articles

Regulation A offers small businesses an exemption from the registration requirements of the Securities Act of 1933. The exemption is generally consistent with the obligation of the Securities and Exchange Commission to fashion exemptions that balance investor protection and capital formation. From the perspective of small businesses, the exemption may appear to provide an efficient access to external capital.

Regulation A, however, has fallen into nearly complete disuse. The millions of small businesses in this country, all of which at some point need external capital to survive and grow, simply do not use Regulation A.

Two reasons account for small …

The Wreck Of Regulation D: The Unintended (And Bad) Outcomes For The Sec’S Crown Jewel Exemptions, Rutheford B. Campbell Jr.

Law Faculty Scholarly Articles

Regulation D is—or at least should be—the crown jewel of the Securities and Exchange Commission's regulatory exemptions from the registration requirements of the Securities Act of 1933. It offers businesses—especially businesses with relatively small capital requirements—fair and efficient access to vital, external capital.

In this article, I present data derived from deep samples of recent Form Ds filed with the Commission. The data show that Regulation D is not working in the way the Commission intended or in a way that benefits society The data reveal that companies attempting to raise relatively small amounts of capital under Regulation D overwhelmingly …

The Road Not Taken: Rethinking Securities Regulation And The Case For Federal Merit Review, Daniel J. Morrissey

University of Richmond Law Review

No abstract provided.

On The Continued Vitality Of Securities Arbitration: Why Reform Efforts Must Not Preclude Predispute Arbitration Clauses, Alicia J. Surdyk

NYLS Law Review

No abstract provided.

The Elusive Balance Between Investor Protection And Wealth Creation, Barbara Black, Jill Gross

Faculty Articles and Other Publications

The enactment of federal securities legislation in the 1930s codified the principle that investors should be shielded from securities fraud, but scholars and policymakers continue to debate the appropriate balance between protecting investors and encouraging capital formation. Congressional activity of the past decade reflects this tension. In the 1990s, Congress enacted two major pieces of legislation to restrict securities fraud class actions because of its belief that frivolous class actions were a drain on entrepreneurism. In 2002, after the EnronIW orldCom et al. corporate scandals, reflecting perhaps a sense that the earlier legislation had tipped the pendulum too far, Congress …

The Insidious Remnants Of State Rules Respecting Capital Formation, Rutheford B. Campbell Jr.

Law Faculty Scholarly Articles

As we move into the Twenty-First Century, state blue sky laws and regulations continue to govern a significant portion of the capital formation activities of our domestic businesses. As a result, state administrators, influenced by their historically informed preferences and local traditions, continue to play important roles when businesses attempt to access external capital sources.

Today, however, the effects of state blue sky laws, regulations, and administrators on capital formation are felt almost exclusively by small businesses. The capital formation activities of larger businesses generally have been freed from state control, most recently by the preemption contained in the National …

Blue Sky Laws And The Recent Congressional Preemption Failure, Rutheford B. Campbell Jr.

Law Faculty Scholarly Articles

Laws regarding the sale of securities may be understood as responses to perceived bargaining failures. The most extreme examples of these bargaining failures are seen in instances in which investors are intentionally misled or defrauded regarding the quality of the investments they receive for their money. Even without the presence of such culpability, however, bargaining failures are likely anytime the trading parties lack sufficient, accurate information necessary to effect value-enhancing trades. When that occurs in trades for capital, the parties to the transaction are misinformed respecting the trade, expectations are not protected, and that precious commodity, capital, may be turned …

Tax Shelter As A Security: The Use Of Tax Returns In A 10b-5 Action, Risa A. Levine

Fordham Urban Law Journal

This student note examines the consequences to investors who initially invest through tax shelters, and whose investments later fail, resulting in liability. The author questions policy for treating those investments in a similar manner to other securities fraud, by looking at the history and procedure of a 10b-5 private cause of action. Tax returns can be used to evaluate the liability and penalties for SEC actions and the ensuing private actions. The author concludes that because 10b-5 actions are judicially created, they must be carefully cabined and screened for reliable indications of harm to the investor. Tax returns should be …

An Open Attack On The Nonsense Of Blue Sky Regulation, Rutheford B. Campbell Jr.

Law Faculty Scholarly Articles

The evolution of state securities laws (hereinafter "blue sky laws") in this country is a classic example of regulation that was, perhaps, initially justified and that was apparently promulgated with the best of motives, but which now is actually harmful to society. Today, blue sky laws are ineffective, philosophically unsound, and unnecessarily expensive, and they should be substantially eliminated. Because of the vested interests that have developed, however, it is unlikely that states will respond to this problem, and it will probably take action by the United States Congress to preempt the area. Such an action is appropriate and, indeed, …

Rule 10b-6: Options Trading By Participants In A Distribution, Michigan Law Review

Michigan Law Review

After briefly discussing the history of options trading, this Note argues that where participants in a distribution trade options, the potential for abuse is sufficient to warrant regulation of this activity. It then evaluates existing statutes and SEC rules that seek to prevent similar abuses and concludes that language in some of these provisions -- particularly rule 10b-6 -- can be construed to prohibit participants in a distribution from engaging in certain put and call transactions that might manipulate the price of the security being distributed.

Real Estate Investments As Securities: The Sufficiency Of The Howey Test Student Symposium - Interpreting The Statutory Definition Of A Security: Some Pragmatic Considerations., John W. Mcleod

St. Mary's Law Journal

The purpose of this article is to examine the kind of protection afforded to real estate investors through the securities acts passed the 1930s. The Supreme Court decision in SEC v. W.I. Howey Co. (1946) held that a security exists when (1) there is an investment of money (2) in a common enterprise (3) with profits to come solely from the efforts of others. This study considers the criticisms of Howey by two legal commentators of the late 1960s, Professor Coffee and Professor Long, in its examination of three main types of real estate investments: land syndications, condominiums, and cooperative …