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Securities Underwriters In Public Capital Markets: The Existence, Parameters And Consequences Of The Fiduciary Obligation To Avoid Conflicts, Andrew F. Tuch
Securities Underwriters In Public Capital Markets: The Existence, Parameters And Consequences Of The Fiduciary Obligation To Avoid Conflicts, Andrew F. Tuch
Scholarship@WashULaw
This article considers whether an investment bank, when acting as underwriter of a public securities offering, owes the issuing company the fiduciary obligation to avoid conflicts of interest. The question has not arisen for final judicial determination and has been overlooked by scholars and regulators. The highly lucrative and visible nature of underwriting work creates powerful incentives for investment banks to accept instructions in the face of this duty. At the same time, the web of loyalties that these institutions owe, by virtue of their broad and diverse range of products and services, creates intractable practical difficulties for compliance with …