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International Crowdfunding: Did The Sec Get It Right When Promulgating Regulation Crowdfunding Relative To Other Leading G20 Crowdfunding Regulations?, Robert A. Dixon Jr. 2018 Northwestern University

International Crowdfunding: Did The Sec Get It Right When Promulgating Regulation Crowdfunding Relative To Other Leading G20 Crowdfunding Regulations?, Robert A. Dixon Jr.

Robert A. Dixon Jr.

Countries are taking measures to boost their economies.  Democratizing capital formation by permitting crowdfunding equities to invigorate the small business strata of economies is one of those measures.  To what extent are countries permitting such capital formation is the focus question of this paper.  With respect to the United States, the SEC promulgated Regulation Crowdfunding in 2015 to effectuate Congress's intent to support small-business capital formation as evidenced by the passage of the JOBS Act in 2012.  Regulation Crowdfunding provides small business securities issuers, intermediaries, and investors rules and restrictions concerning their obligations under the law.  So, how effective ...


Class Actions, Statutes Of Limitations And Repose, And Federal Common Law, Stephen B. Burbank, Tobias Barrington Wolff 2018 University of Pennsylvania Law School

Class Actions, Statutes Of Limitations And Repose, And Federal Common Law, Stephen B. Burbank, Tobias Barrington Wolff

Faculty Scholarship

After more than three decades during which it gave the issue scant attention, the Supreme Court has again made the American Pipe doctrine an active part of its docket. American Pipe addresses the tolling of statutes of limitations in federal class action litigation. When plaintiffs file a putative class action in federal court and class certification is denied, absent members of the putative class may wish to pursue their claims in some kind of further proceeding. If the statute of limitations would otherwise have expired while the class certification issue was being resolved, these claimants may need the benefit of ...


Mom Approval In A World Of Active Shareholders, Edward Rock 2018 NYU School of Law

Mom Approval In A World Of Active Shareholders, Edward Rock

New York University Law and Economics Working Papers

Majority of Minority (MOM) approval is a common mechanism used in many jurisdictions to control conflicts of interest in related party transactions. Recently, in M & F Worldwide, the Delaware Supreme Court held that MOM approval in a controlling shareholder freezeout shifted the standard of review from Entire Fairness to Business Judgement Rule. In this article, I investigate how MOM approval functions in the presence of active shareholders (both hedge funds and actively managed mutual funds).

After reviewing the potential benefits and problems with MOM approval, I review the use of MOM provisions in controlling shareholder freezeouts in the U.S. between 2010 and 2017. I combine this with three case studies involving MOM approval: the Dell MBO; the Oracle/NetSuite merger; and the unsuccessful effort by the Dolan family to take Cablevision private in 2007. I then briefly consider a quite different sort of MOM approval: the EU Takeover Directive’s requirement that conditions mandatory freezeouts on achieving a very high level of ownership (90-95%), typically through a tender offer.

The principal lessons of this investigation are ambiguous. First, I do not find significant evidence that the use of MOM conditions in ...


Insider Tainting: Strategic Tipping Of Material Nonpublic Information, Andrew Verstein 2018 Northwestern University School of Law

Insider Tainting: Strategic Tipping Of Material Nonpublic Information, Andrew Verstein

Northwestern University Law Review

Insider trading law is meant to be a shield, protecting the market and investors from unscrupulous traders, but it can also be a sword. Insofar as we penalize trading on the basis of material, nonpublic information, it becomes possible to share information strategically in order to disable or constrain innocent investors. A hostile takeover can be averted, or a bidding war curtailed, because recipients of such information must then refrain from trading. This Article offers the first general account of “insider tainting,” an increasingly pervasive phenomenon of weaponizing insider trading law.


The Risk Of Regulatory Arbitrage: A Response To Securities Regulation In Virtual Space, Wendy Gerwick Couture 2018 University of Idaho College of Law

The Risk Of Regulatory Arbitrage: A Response To Securities Regulation In Virtual Space, Wendy Gerwick Couture

Washington and Lee Law Review Online

In Securities Regulation in Virtual Space, Eric. C. Chaffee explores the potential applicability of the securities laws to virtual transactions based on virtual activity and argues that, although many of these transactions likely qualify as “investment contracts” under S.E.C. v. W.J. Howey Co., they should be excluded under the context clause because, among other reasons, application of the securities laws would stifle creativity within this innovative space. This Response proposes a reframing of the Howey test as a response to the risk of regulatory arbitrage, argues that the context clause should only exclude transactions that do not ...


Central Clearing Of Financial Contracts: Theory And Regulatory Implications, Steven L. Schwarcz 2018 Duke Law School

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 derivatives and commodity 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 ...


Regulating Robo Advice Across The Financial Services Industry, Tom Baker, Benedict G. C. Dellaert 2018 University of Pennsylvania Law School

Regulating Robo Advice Across The Financial Services Industry, Tom Baker, Benedict G. C. Dellaert

Faculty Scholarship

Automated financial product advisors – “robo advisors” – are emerging across the financial services industry, helping consumers choose investments, banking products, and insurance policies. Robo advisors have the potential to lower the cost and increase the quality and transparency of financial advice for consumers. But they also pose significant new challenges for regulators who are accustomed to assessing human intermediaries. A well-designed robo advisor will be honest and competent, and it will recommend only suitable products. Because humans design and implement robo advisors, however, honesty, competence, and suitability cannot simply be assumed. Moreover, robo advisors pose new scale risks that are different ...


What Conflict Minerals Rules Tell Us About The Legal Transplantation Of Corporate Social Responsibility Standards Without The State: From The United Nations To The United States To Taiwan, Chang-hsien (Robert) TSAI, Yen-nung WU 2017 National Tsinghua University

What Conflict Minerals Rules Tell Us About The Legal Transplantation Of Corporate Social Responsibility Standards Without The State: From The United Nations To The United States To Taiwan, Chang-Hsien (Robert) Tsai, Yen-Nung Wu

Chang-hsien (Robert) TSAI


To resolve global political and scholarly concerns over conflict minerals (“CM”) produced in the Democratic Republic of the Congo and neighboring regions, two kinds of CM-related disclosure rules (or “CM rules”) come into play in regulating their use: government-mandated laws such as Section 1502 of the Dodd-Frank Act in the United States (hereinafter “Sec. 1502”) and transnational voluntary codes such as the Electronic Industry Citizenship Coalition (“EICC”) Code of Conduct. The creation of both of these CM rules could be attributed to the promotion of such concerns by the United Nations. This article is the first attempt to unpack and ...


The Unicorn Governance Trap, Renee Jones 2017 Boston College Law School

The Unicorn Governance Trap, Renee Jones

Boston College Law School Faculty Papers

The recent trend of large-scale start-up companies delaying an IPO creates a new kind of corporate governance problem. The prevalence of “unicorns” – privately held companies with market valuations of $1 billion or more – means the disciplinary mechanisms on which investors traditionally relied no longer function to prevent misconduct or mismanagement by unicorn founders. High profile frauds by unicorns like Zenefits and Theranos, and the recent travails of Uber highlight the need to rethink unicorn governance structure. These burgeoning controversies call for reconsideration of legal reforms that allow unicorns to remain for protracted periods in an ill-defined limbo between private and ...


Sec Filings, Regulatory Deadlines, And Capital Market Consequences, Eli Bartov, Yaniv Konchitchki 2017 New York University

Sec Filings, Regulatory Deadlines, And Capital Market Consequences, Eli Bartov, Yaniv Konchitchki

New York University Law and Economics Working Papers

Timely disclosure of financial statement information is a critical requirement for firms and well-functioning capital markets. Yet, every quarter or year, a non-trivial number of firms are late in filing their financial statements. This paper identifies and probes various capital market consequences for late filings of quarterly and annual financial statements. It examines the short- and long-window reaction to late filings, as well as how equity investors process statements accompanying late filing announcements, such as managers declaring intentions to file within/outside SEC’s allowed grace periods. The paper documents that delayed quarterly filings have distinctly different valuation implications than ...


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

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 ...


Protecting Whistleblowing (And Not Just Whistleblowers), Evan J. Ballan 2017 University of Michigan Law School

Protecting Whistleblowing (And Not Just Whistleblowers), Evan J. Ballan

Michigan Law Review

When the government contracts with private parties, the risk of fraud runs high. Fraud against the government hurts everyone: taxpayer money is wasted on inferior or nonexistent products and services, and the public bears the burdens attendant to those inadequate goods. To combat fraud, Congress has developed several statutory frameworks to encourage whistleblowers to come forward and report wrongdoing in exchange for a monetary reward. The federal False Claims Act allows whistleblowers to file an action in federal court on behalf of the United States, and to share in any recovery. Under the Dodd- Frank Act, the SEC Office of ...


Regulating A Revolution: From Regulatory Sandboxes To Smart Regulation, Dirk A. Zetzsche, Ross P. Buckley, Janos N. Barberis, Douglas W. Arner 2017 Faculty of Law, Economics and Finance, University of Luxembourg

Regulating A Revolution: From Regulatory Sandboxes To Smart Regulation, Dirk A. Zetzsche, Ross P. Buckley, Janos N. Barberis, Douglas W. Arner

Fordham Journal of Corporate & Financial Law

Prior to the global financial crisis, financial innovation was viewed very positively, resulting in a laissez-faire, deregulatory approach to financial regulation. Since the crisis the regulatory pendulum has swung to the other extreme. Post-crisis regulation, plus rapid technological change, have spurred the development of financial technology (FinTech). FinTech firms and data-driven financial service providers profoundly challenge the current regulatory paradigm. Financial regulators increasingly seek to balance the traditional regulatory objectives of financial stability and consumer protection with promoting growth and innovation. The resulting regulatory innovations include RegTech, regulatory sandboxes, and special charters. This Article analyzes possible new regulatory approaches, ranging ...


Venture Capital Contract Design: An Empirical Analysis Of The Connection Between Bargaining Power And Venture Financing Contract Terms, Spencer Williams 2017 Stanford Law School Program on Corporate Governance and Practice

Venture Capital Contract Design: An Empirical Analysis Of The Connection Between Bargaining Power And Venture Financing Contract Terms, Spencer Williams

Fordham Journal of Corporate & Financial Law

This Article presents an empirical analysis of the connection between bargaining power and contract design using an original dataset of over 5,500 equity and debt venture financings from 2004–2015. Using the total supply of venture capital in the U.S. as a measure of relative bargaining power between entrepreneurs and investors, this Article finds that venture capital supply has a statistically significant relationship with price and non-price terms in both equity and debt financings. These results contradict one of three theoretical accounts of bargaining power and support the other two.


A Novel Approach To Defining "Whistleblower" In Dodd-Frank, Ian A. Engoron 2017 J.D. Candidate, Fordham University School of Law

A Novel Approach To Defining "Whistleblower" In Dodd-Frank, Ian A. Engoron

Fordham Journal of Corporate & Financial Law

Following the Financial Crisis of 2008, trust in the financial industry was at an all-time low as the American taxpayer was forced to bailout the very same institutions responsible for their suffering. In response, Congress passed Dodd-Frank in 2010 to ensure another crisis like 2008 never happen again. Section 78u-6 of the Act provides incentives and protections for whistleblowers who report violations of securities laws. In recent years there has been a divide among circuit courts over the question of whether employees who report violations internally to their bosses—and not directly to the SEC—are protected by the Act ...


Crowdfunding Signals, Darian M. Ibrahim 2017 William & Mary Law School

Crowdfunding Signals, Darian M. Ibrahim

Popular Media

No abstract provided.


M-U-N-I: Evidencing The Inadequacies Of The Municipal Securities Regulatory Framework, John Carriel 2017 University of Missouri School of Law

M-U-N-I: Evidencing The Inadequacies Of The Municipal Securities Regulatory Framework, John Carriel

The Business, Entrepreneurship & Tax Law Review

This article argues that the current regulation of the minicipal securities market is inadequate, and that regulatory reform is not only necessary but also permissible as the Securities and Exchange Commission has the legal authority under the current statutory framework to substantially remedy such inadequacy. In making this argument, this article focuses on the legislative history of the Securities Reform Act of 1975, analyses of statutory text, the current regulatory framework surrounding the municipal securities market, prior attempts to effect regulatory reform, and one of the principal issues with the current regulatory framework - the lack of uniform accounting principles in ...


Is Say On Pay All About Pay? The Impact Of Firm Performance, Jill E. Fisch, Darius Palia, Steven Davidoff Solomon 2017 University of Pennsylvania Law School

Is Say On Pay All About Pay? The Impact Of Firm Performance, Jill E. Fisch, Darius Palia, Steven Davidoff Solomon

Steven M. Davidoff Solomon

The Dodd-Frank Act of 2010 mandated a number of regulatory reforms including a requirement that large U.S. public companies provide their shareholders with the opportunity to cast a non-binding vote on executive compensation. The “say on pay” vote was designed to rein in excessive levels of executive compensation and to encourage boards to adopt compensation structures that tie executive pay more closely to performance. Although the literature is mixed, many studies question whether the statute has had the desired effect. Shareholders at most companies overwhelmingly approve the compensation packages, and pay levels continue to be high. Although a lack ...


Is Say On Pay All About Pay? The Impact Of Firm Performance, Jill E. Fisch, Darius Palia, Steven Davidoff Solomon 2017 University of Pennsylvania Law School

Is Say On Pay All About Pay? The Impact Of Firm Performance, Jill E. Fisch, Darius Palia, Steven Davidoff Solomon

Steven Davidoff Solomon

The Dodd-Frank Act of 2010 mandated a number of regulatory reforms including a requirement that large U.S. public companies provide their shareholders with the opportunity to cast a non-binding vote on executive compensation. The “say on pay” vote was designed to rein in excessive levels of executive compensation and to encourage boards to adopt compensation structures that tie executive pay more closely to performance. Although the literature is mixed, many studies question whether the statute has had the desired effect. Shareholders at most companies overwhelmingly approve the compensation packages, and pay levels continue to be high. Although a lack ...


Confronting The Peppercorn Settlement In Merger Litigation: An Empirical Analysis And A Proposal For Reform, Sean J. Griffith, Steven D. Solomon, Jill E. Fisch 2017 Fordham University School of Law

Confronting The Peppercorn Settlement In Merger Litigation: An Empirical Analysis And A Proposal For Reform, Sean J. Griffith, Steven D. Solomon, Jill E. Fisch

Steven Davidoff Solomon

Shareholder litigation challenging corporate mergers is ubiquitous, with the likelihood of a shareholder suit exceeding 90%. The value of this litigation, however, is questionable. The vast majority of merger cases settle for nothing more than supplemental disclosures in the merger proxy statement. The attorneys that bring these lawsuits are compensated for their efforts with a court-awarded fee. This leads critics to charge that merger litigation benefits only the lawyers who bring the claims, not the shareholders they represent. In response, defenders of merger litigation argue that the lawsuits serve a useful oversight function and that the improved disclosures that result ...


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