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Full-Text Articles in Securities Law

Information Asymmetry And The Protection Of Investors, Kevin S. Haeberle Nov 2019

Information Asymmetry And The Protection Of Investors, Kevin S. Haeberle

Faculty Publications

To some, the reductions in information asymmetry provided by the main securities-specific disclosure, fraud, and insider-trading laws help ordinary investors in meaningful ways. To others, whatever their larger social value, such reductions do little, if anything for these investors. For decades, these two sides of this investor-protection divide have mostly talked past each other.

This Article builds on economic theory to reveal something striking: The reductions in information asymmetry provided by the core securities laws likely impose a long-overlooked cost on buy-and-hold ordinary investors. More specifically, I explain why there is much reason to believe that the reductions take away ...


Making A Market For Corporate Disclosure, Kevin S. Haeberle, M. Todd Henderson Sep 2019

Making A Market For Corporate Disclosure, Kevin S. Haeberle, M. Todd Henderson

Kevin Scott Haeberle

It has long been said that market forces alone will result in a problematic under-sharing of information by public companies. Since the 1930s, the main regulatory response to this market failure has come in the form of the massive mandatory-disclosure regime that sits at the foundation of modern securities law. But this regime—especially when viewed along with its speech-chilling antifraud overlay—no doubt leaves society without all the corporate information from which it would benefit. The typical fix offered to the problem has been more of the same: add to the 100-plus-page list of what firms must disclose, often ...


Information-Dissemination Law: The Regulation Of How Market-Moving Information Is Revealed, Kevin S. Haeberle, M. Todd Henderson Sep 2019

Information-Dissemination Law: The Regulation Of How Market-Moving Information Is Revealed, Kevin S. Haeberle, M. Todd Henderson

Kevin Scott Haeberle

No abstract provided.


A New Market-Based Approach To Securities Law, Kevin S. Haeberle Sep 2019

A New Market-Based Approach To Securities Law, Kevin S. Haeberle

Kevin Scott Haeberle

Modern securities regulation has three main areas, each of which is plagued by a core problem. Mandatory disclosure law leaves society with suboptimal disclosure, as the government calls for too little of some information (for example, management analysis of company prospects) and too much of other information (for example, data about trivial executive perks). Securities fraud law (specifically, its central fraud-on-the-market theory of reliance) yields damages at odds with any reasonable theory of compensation and deterrence. And insider trading law fails to achieve its ends because incentives to police illegal trading and tipping by executives are currently weak.

In this ...


Stock-Market Law And The Accuracy Of Public Companies’ Stock Prices, Kevin S. Haeberle Sep 2019

Stock-Market Law And The Accuracy Of Public Companies’ Stock Prices, Kevin S. Haeberle

Kevin Scott Haeberle

The social benefits of more accurate stock prices—that is, stock-market prices that more accurately reflect the future cash flows that companies are likely to produce—are well established. But it is also thought that market forces alone will lead to only a sub-optimal level of stock-price accuracy—a level that fails to obtain the maximum net social benefits, or wealth, that would result from a higher level. One of the principal aims of federal securities law has therefore been to increase the extent to which the stock prices of the most important companies in our economy (public companies) contain ...


Evaluating Stock-Trading Practices And Their Regulation, Merritt B. Fox, Kevin S. Haeberle Sep 2019

Evaluating Stock-Trading Practices And Their Regulation, Merritt B. Fox, Kevin S. Haeberle

Kevin Scott Haeberle

High-frequency trading, dark pools, and the practices associated with them have come under tremendous scrutiny lately, giving rise to much hot rhetoric. Missing from the discussion, however, is a principled, comprehensive standard for evaluating such practices and the law that governs them. This Article fills that gap by providing a general framework for making serious normative judgments about stock-trading behavior and its regulation. In particular, we argue that such practices and laws should be evaluated with an eye to the secondary trading market's impact on four main aspects of our economy: the use of existing productive capacity, the allocation ...


Securities Law Research Presentation, Adeen Postar Aug 2019

Securities Law Research Presentation, Adeen Postar

Adeen Postar

This research guide is a powerpoint presentation on primary and secondary sources used for securities law research. It also identifies government websites and tips for conducting securities law research.


A New Market-Based Approach To Securities Law, Kevin S. Haeberle Oct 2018

A New Market-Based Approach To Securities Law, Kevin S. Haeberle

Faculty Publications

Modern securities regulation has three main areas, each of which is plagued by a core problem. Mandatory disclosure law leaves society with suboptimal disclosure, as the government calls for too little of some information (for example, management analysis of company prospects) and too much of other information (for example, data about trivial executive perks). Securities fraud law (specifically, its central fraud-on-the-market theory of reliance) yields damages at odds with any reasonable theory of compensation and deterrence. And insider trading law fails to achieve its ends because incentives to police illegal trading and tipping by executives are currently weak.

In this ...


Making A Market For Corporate Disclosure, Kevin S. Haeberle, M. Todd Henderson Apr 2018

Making A Market For Corporate Disclosure, Kevin S. Haeberle, M. Todd Henderson

Faculty Publications

It has long been said that market forces alone will result in a problematic under-sharing of information by public companies. Since the 1930s, the main regulatory response to this market failure has come in the form of the massive mandatory-disclosure regime that sits at the foundation of modern securities law. But this regime—especially when viewed along with its speech-chilling antifraud overlay—no doubt leaves society without all the corporate information from which it would benefit. The typical fix offered to the problem has been more of the same: add to the 100-plus-page list of what firms must disclose, often ...


Decentralized Public Ledger Systems And Securities Law: New Applications Of Blockchain Technology And The Revitalization Of Sections 11 And 12(A)(2) Of The Securities Act Of 1933, Kelsey Bolin Jan 2018

Decentralized Public Ledger Systems And Securities Law: New Applications Of Blockchain Technology And The Revitalization Of Sections 11 And 12(A)(2) Of The Securities Act Of 1933, Kelsey Bolin

Washington University Law Review

When Bitcoin launched in 2009, it was the first virtual cryptocurrency to gain popularity and attain widespread use. Much attention has been paid to Bitcoin’s well-publicized advances and setbacks as the world’s foremost virtual currency. Less attention has been paid, however, to the decentralized public ledger technology that enables Bitcoin to function. That technology is just as innovative as Bitcoin itself. Decentralized public ledgers are a revolution in digital data storage and have the “potential to fundamentally shift the way in which society operates.”

This Note will examine one such societal shift—a change in how shareholders access ...


The Interest Is Not Mutual: Effect Of The Personal Property Securities Act 2009 (Cth) On Contractual Rights Of Set-Off, Caroline Woo Dec 2017

The Interest Is Not Mutual: Effect Of The Personal Property Securities Act 2009 (Cth) On Contractual Rights Of Set-Off, Caroline Woo

The University of Notre Dame Australia Law Review

In Hamersley Iron Pty Ltd v Forge Group Power Pty Ltd (In Liquidation) (Receivers and Managers Appointed), the Supreme Court of Western Australia held that the rights of ANZ, a secured creditor of Forge Group Power Pty Ltd (Forge) holding a security interest under the Personal Property Securities Act 2009 (Cth) (PPSA), trumped Hamersley Iron Pty Ltd’s rights of contractual and equitable set-off. Forge is in receivership and in liquidation. In answering the preliminary issues in dispute between the parties, the Supreme Court examined the complex interaction between contractual and equitable rights, the PPSA and section 553C of the ...


The Perfect Storm Is Brewing Once Again: What Scaling Back Dodd-Frank Will Mean For The Credit Default Swap, Daniel Isaacson Jul 2017

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 ...


Evaluating Stock-Trading Practices And Their Regulation, Merritt B. Fox, Kevin S. Haeberle Jul 2017

Evaluating Stock-Trading Practices And Their Regulation, Merritt B. Fox, Kevin S. Haeberle

Faculty Publications

High-frequency trading, dark pools, and the practices associated with them have come under tremendous scrutiny lately, giving rise to much hot rhetoric. Missing from the discussion, however, is a principled, comprehensive standard for evaluating such practices and the law that governs them. This Article fills that gap by providing a general framework for making serious normative judgments about stock-trading behavior and its regulation. In particular, we argue that such practices and laws should be evaluated with an eye to the secondary trading market's impact on four main aspects of our economy: the use of existing productive capacity, the allocation ...


Much Ado About Nothing: The Limits Of Liability For Item 303 Omissions And The Circuit Split That Never Was, Brian Currie Apr 2017

Much Ado About Nothing: The Limits Of Liability For Item 303 Omissions And The Circuit Split That Never Was, Brian Currie

William & Mary Business Law Review

The implied private action for violations of SEC Rule 10b-5 has a contentious history. When plaintiffs base such actions on representations of forward-looking information, however, the stakes are even higher. Recently, the federal circuit courts revisited this divisive issue while deciding whether an omission from required disclosure of Management’s Discussion and Analysis (MD&A) of financial conditions and results of operations. The apparent disparity between the federal circuit courts has caused great consternation and uncertainty in the corporate legal sphere.

This Note will examine the origins and controversial history of Rule 10b-5 private actions, discuss the treatment of MD ...


Outside A Black Box: Court And Regulatory Review Of Investment Valuations Of Hard-To-Value Securities, Salvatore Massa Nov 2016

Outside A Black Box: Court And Regulatory Review Of Investment Valuations Of Hard-To-Value Securities, Salvatore Massa

William & Mary Business Law Review

Valuation is a critical function of investment advisers that has significant implications for both clients and advisers. One potential risk associated with valuation is that an investment adviser may abuse its position in valuing portfolio assets to accrue higher management and incentive fees to the detriment of clients. Although the valuation function may be viewed as an objective exercise, adviser valuations become subject to greater levels of discretion for hard-to-value securities, making determinations of adviser abuse less clear. Depending on the transparency of the adviser, the valuation process itself may become a black box to the client. Securities and Exchange ...


Shareholder Exit Signs On Us And Eu Highways, Raluca Papadima Sep 2016

Shareholder Exit Signs On Us And Eu Highways, Raluca Papadima

Raluca Papadima

This article discusses legal exit rights (referred to in the United States as appraisal rights and in civil law Europe as withdrawal rights), in the United States, France and Romania. We selected these three countries because they are representative of strong, average and respectively weak capital markets, with varying levels of shareholder activism and litigation (high, normal and respectively low). Additionally, the selection of these countries enabled us to compare the structure of legal exit rights in the United States and in Europe and, within Europe, between two politically, economically and culturally sister countries (France and Romania) which should be ...


Information-Dissemination Law: The Regulation Of How Market-Moving Information Is Revealed, Kevin S. Haeberle, M. Todd Henderson Sep 2016

Information-Dissemination Law: The Regulation Of How Market-Moving Information Is Revealed, Kevin S. Haeberle, M. Todd Henderson

Faculty Publications

No abstract provided.


Chinese Regulation Of Issuer Earnings Forecasts: Recommendations For An Ex Ante Legal Framework, Chengxi Yao Mar 2016

Chinese Regulation Of Issuer Earnings Forecasts: Recommendations For An Ex Ante Legal Framework, Chengxi Yao

William & Mary Business Law Review

No abstract provided.


New Kids On The Blockchain: How Bitcoin's Technology Could Reinvent The Stock Market, Larissa Lee Jan 2016

New Kids On The Blockchain: How Bitcoin's Technology Could Reinvent The Stock Market, Larissa Lee

Larissa Lee

Bitcoin is the first and most successful digital currency in the world. It is polarized in the news almost daily, with either glowing reviews of the many benefits of an alternative and international currency, or doomsday predictions of anarchy, deflation, and another tulip bubble.This Article focuses on the truly innovative aspect of Bitcoin—and that which has gone mostly unnoticed since its inception—the technological platform used to transfer Bitcoin from one party to another. This technology is called the Blockchain. The Blockchain eschews a bank or other middleman and allows parties to transfer funds directly to one another ...


Inclusive Crowdfunding, Andrew A. Schwartz Jan 2016

Inclusive Crowdfunding, Andrew A. Schwartz

Utah Law Review

Retail crowdfunding under Title III of the JOBS Act has a fundamental advantage over accredited crowdfunding and intrastate crowdfunding: the value of inclusivity. What that is worth in a given instance may be difficult to calculate, but it is surely more than zero. This is one reason to expect that retail crowdfunding, once it commences, may prove more successful than many commentators anticipate.


Legal Transplantation Or Legal Innovation? Equity-Crowdfunding Regulation In Taiwan After Title Iii Of The U.S. Jobs Act, Chang-Hsien Tsai Dec 2015

Legal Transplantation Or Legal Innovation? Equity-Crowdfunding Regulation In Taiwan After Title Iii Of The U.S. Jobs Act, Chang-Hsien Tsai

Chang-hsien (Robert) TSAI

Crowdfunding has caused a worldwide revolution in early-stage startup financing during recent years.  In the United States, the expansion of for-profit crowdfunding platforms to fund small businesses and startups prompted Congress to pass the game-changing law on equity crowdfunding, Title III of the JOBS Act in 2012 (“CROWDFUND Act”).  While its specific rules and regulations as adopted by the SEC takes effect this year, the substance of the JOBS Act as a whole is geared more towards the goal of capital formation, over the historically promoted goal of investor protection.  The use of equity crowdfunding has extended over to Taiwan ...


Is Moderation The Highest Virtue? A Comparative Study Of A Middle Way Of Control Transaction Regimes, Yueh-Ping Yang, Pin-Hsien Lee Oct 2015

Is Moderation The Highest Virtue? A Comparative Study Of A Middle Way Of Control Transaction Regimes, Yueh-Ping Yang, Pin-Hsien Lee

Yueh-Ping Yang

Comparative studies of control transaction regimes mostly compare between the Market Rule as adopted in the U.S. and the General Offer Rule ad adopted in European Union, while paying less attention to the Partial Offer Rule, a middle way model adopted in many East Asian countries such as Japan, South Korea, China, Taiwan, etc. In this paper, we attempt to fill this gap by highlighting the Partial Offer Rule adopted in these countries, analyzing this rule’s theoretical foundation and observing its implementation in practice. Our theoretical analyses of the Partial Offer Rule are comprised of two parts. First ...


Article Iii And Seventh Amendment Challenges To Sec Administrative Proceedings After Dodd-Frank, Daniel P. Dwyer Esquire Sep 2015

Article Iii And Seventh Amendment Challenges To Sec Administrative Proceedings After Dodd-Frank, Daniel P. Dwyer Esquire

Daniel P. Dwyer Esquire

This article is a discussion of the evolution of enforcement remedies available to the United States Securities & Exchange Commission and the possibility that, with the enactment of the 2010 Dodd-Frank amendments to the securities laws, Congress encroached on Article III of and the Seventh Amendment to the Constitution. Section of 929P of Dodd-Frank, which allows the SEC to pursue monetary penalties and other forms of relief against unregulated persons in administrative proceedings, is a particular focus. The article relies on a chronological analysis of these areas of law and close case reading to reconcile the disparate and sometimes seemingly contradictory ...


Choosing Among Innocents: Should Donations To Charities Be Protected From Avoidance As Fraudulent Transfers, Jeffrey Davis Aug 2015

Choosing Among Innocents: Should Donations To Charities Be Protected From Avoidance As Fraudulent Transfers, Jeffrey Davis

Jeffrey Davis

In recent years, the nation has experienced the most severe recession since the Great Depression of the 1930s. A recession is like a low tide. When the water recedes, the crabs, slugs, and urchins appear. Similarly, when the economy recedes, Ponzi schemes appear. People cut back on saving and investing, and many are forced to draw on savings and investments. Deprived of its life's blood, a positive cash flow, a Ponzi scheme dies. This explains why so many Ponzi schemes have failed recently, including the schemes of Bernard Madoff in New York, Tom Petters in Minneapolis, Robert Allen Stanford ...


Tender Offers And The Sale Of Control: An Analogue To Determine The Validity Of Target Management Defense Measures, Stuart R. Cohn Aug 2015

Tender Offers And The Sale Of Control: An Analogue To Determine The Validity Of Target Management Defense Measures, Stuart R. Cohn

Stuart R. Cohn

The hostile tender offer phenomenon has spawned wholesale defensive measures adopted by target company management. In recent years, confrontations like those of Occidental Petroleum-Mead Corporation and American Express-McGraw-Hill have resulted in target management causing the eventual withdrawal of the tender offer by employing a variety of defensive measures known colloquially as “scorched earth” tactics. The “urge to merge” among major corporations will continue to produce unsolicited, nonnegotiated tender offers at varying scales of size. Consequently, strategies and techniques have been created at a pace faster than the process of litigation, causing a discernible lag between the ingenuity of corporate management ...


Stock Appreciation Rights And The Sec: A Case Of Questionable Rulemaking, Stuart R. Cohn Aug 2015

Stock Appreciation Rights And The Sec: A Case Of Questionable Rulemaking, Stuart R. Cohn

Stuart R. Cohn

A stock appreciation rights (SARs) program is a form of deferred incentive compensation. Grantees are awarded SAR-units representing an equal number of the grantor’s equity shares currently being traded in public markets. SARs provide grantees the benefit of stock ownership without equity interest, investment, or risk of loss. Stock appreciation rights programs offer various advantages over other forms of executive compensation and have grown rapidly in number. These advantages include the availability of benefits without the requirement of monetary payments, the utilization of SARs as an interest-free form of financing the purchase of stock under tandem stock option programs ...


Securities Markets For Small Issuers: The Barrier Of Federal Solicitation And Advertising Prohibitions, Stuart R. Cohn Aug 2015

Securities Markets For Small Issuers: The Barrier Of Federal Solicitation And Advertising Prohibitions, Stuart R. Cohn

Stuart R. Cohn

How can small issuers find potential investors and stay within the confines of federal securities laws? That is a perplexing question given the very strong prohibitions against advertising and solicitation found in SEC rules and no-action letters. What the registration exemptions purport to give with one hand, i.e. ability to raise capital without the cost and delay of registration, the anti-solicitation rules take away with the other. These rules need to be lifted or modified if small businesses are to have a viable opportunity to seek potential investors.


Demise Of The Director's Duty Of Care: Judicial Avoidance Of Standards And Sanctions Through The Business Judgment Rule, Stuart R. Cohn Aug 2015

Demise Of The Director's Duty Of Care: Judicial Avoidance Of Standards And Sanctions Through The Business Judgment Rule, Stuart R. Cohn

Stuart R. Cohn

Courts love the so-called business judgment rule. It dispenses quickly and easily with derivative actions against corporate directors and officers, and other challenges to corporate conduct. Unfortunately, the business judgment rule has come to mask its underlying premise, i.e. that there must have been a business judgment made. This article examines the dominance of the business judgment rule over the underlying requirement of the duty of care and suggests reform measures that will bring the duty of care back to its appropriate role in determining the merits of management decision-making processes.


The Impact Of Securities Laws On Developing Companies: Would The Wright Brothers Have Gotten Off The Ground?, Stuart R. Cohn Aug 2015

The Impact Of Securities Laws On Developing Companies: Would The Wright Brothers Have Gotten Off The Ground?, Stuart R. Cohn

Stuart R. Cohn

Suppose the Wright brothers, to pursue their dreams of manned flight, needed outside financing. Confronted with the intimidating regulatory requirements of today 's state and federal securities laws, would they ever have gotten off the ground? With historical illustrations, this Essay presents an entertaining look at the serious problems that would be encountered today by entrepreneurs who have ideas but need capital to develop them. It analyzes the regulatory maze and prohibitions of state and federal securities laws and concludes that, in today's marketplace, the Wright brothers probably would have violated several laws to obtain essential financing for their ...


E-Commerce, Cyber, And Electronic Payment System Risks: Lessons From Paypal, Lawrence J. Trautman Aug 2015

E-Commerce, Cyber, And Electronic Payment System Risks: Lessons From Paypal, Lawrence J. Trautman

Lawrence J. Trautman Sr.

By now, almost without exception, every business has an internet presence, and is likely engaged in e-commerce. What are the major risks perceived by those engaged in e-commerce and electronic payment systems? What potential risks, if they become reality, may cause substantial increases in operating costs or threaten the very survival of the enterprise? This article utilizes the relevant annual report disclosures from eBay (parent of PayPal), along with other eBay and PayPal documents, as a potentially powerful teaching device. Most of the descriptive language to follow is excerpted directly from eBay’s regulatory filings. My additions include weaving these ...