Watching Insider Trading Law Wobble: Obus, Newman, Salman And Two Martomas,
2019
Georgetown University Law Center
Watching Insider Trading Law Wobble: Obus, Newman, Salman And Two Martomas, Donald C. Langevoort
Georgetown Law Faculty Publications and Other Works
“The crime of insider trading,” Judge Jed Rakoff has said, “is a straightforward concept that some courts have somehow managed to complicate.” In the last eight years or so, insider trading law has wobbled visibly (in the Second Circuit in particular) in applying the standard for tipper-tippee liability originally set in the Supreme Court’s Dirks decision in 1983: from Obus (2012) to Newman (2014), with a detour to the Supreme Court in Salman (2016), and most recently in two Martoma opinions (2017 and 2018). This essay is about the wobble, with particular attention to the question addressed in Martoma ...
Social Activism Through Shareholder Activism,
2019
George Washington University Law School
Social Activism Through Shareholder Activism, Lisa M. Fairfax
Washington and Lee Law Review
This article is based on the author's keynote address at the 2018-2019 Lara D. Gass Annual Symposium: Civil Rights and Shareholder Activism at Washington and Lee University School of Law, February 15, 2019.
In 1952, the SEC altered the shareholder proposal rule to exclude proposals made “primarily for the purpose of promoting general economic, political, racial, religious, social or similar causes.” The SEC did not reference civil rights activist James Peck or otherwise acknowledge that its actions were prompted by Peck’s 1951 shareholder proposal to Greyhound for desegregating seating. Instead, the SEC indicated that its change simply reflected ...
Chancery’S Greatest Decision: Historical Insights On Civil Rights And The Future Of Shareholder Activism,
2019
Wake Forest University School of Law
Chancery’S Greatest Decision: Historical Insights On Civil Rights And The Future Of Shareholder Activism, Omari Scott Simmons
Washington and Lee Law Review
This article builds upon the author's remarks at the 2018-2019 Lara D. Gass Annual Symposium: Civil Rights and Shareholder Activism at Washington and Lee University School of Law, February 15, 2019.
Shareholder activism—using an equity stake in a corporation to influence management—has become a popular tool to effectuate social change in the twenty-first century. Increasingly, activists are looking beyond financial performance to demand better corporate performance in such areas as economic inequality, civil rights, human rights, discrimination, and diversity. These efforts take many forms: publicity campaigns, litigation, proxy battles, shareholder resolutions, and negotiations with corporate management. However ...
From Public Policy To Materiality: Non-Financial Reporting, Shareholder Engagement, And Rule 14a-8’S Ordinary Business Exception,
2019
University of Kansas School of Law
From Public Policy To Materiality: Non-Financial Reporting, Shareholder Engagement, And Rule 14a-8’S Ordinary Business Exception, Virginia Harper Ho
Washington and Lee Law Review
This article builds upon the author's remarks at the 2018-2019 Lara D. Gass Annual Symposium: Civil Rights and Shareholder Activism at Washington and Lee University School of Law, February 15, 2019.
In 2017, shareholder proposals urging corporate boards to report on their climate-related risk made headlines when they earned majority support from investors at ExxonMobil, Occidental Petroleum, and PPL. The key to this historic vote was the support of Blackrock, State Street, and Vanguard, which broke with management and cast their votes behind the proposals. The 2018 proxy season saw several more climate-related proposals earn majority support, and in ...
Information Asymmetry And The Protection Of Investors,
2019
William & Mary Law School
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 ...
The Social Costs Of Dividends And Share Repurchases,
2019
Pepperdine University
The Social Costs Of Dividends And Share Repurchases, J.B. Heaton
The Journal of Business, Entrepreneurship & the Law
A long-held view in the academy is that shareholders are "residual claimants” in the sense that shareholders are paid in full only after the corporation pays its creditors. The reality on the ground is far different. Corporations give assets away to their shareholders long before they have satisfied creditors, both voluntary contract creditors and involuntary tort creditors. In particular, existing U.S. corporate and voidable transfer laws allow corporations to pay dividends and make share repurchases up to the point where the corporation is insolvent or nearly so. Voluntary creditors can limit dividends and share repurchases by contract, but involuntary ...
Crashing The Boards: A Comparative Analysis Of The Boxing Out Of Women On Boards In The United States And Canada,
2019
Pepperdine University
Crashing The Boards: A Comparative Analysis Of The Boxing Out Of Women On Boards In The United States And Canada, Diana C. Nicholls Mutter
The Journal of Business, Entrepreneurship & the Law
This paper will first provide a critical, comparative look at the Canadian and the federal American responses to the under-representation of women on boards of large, publicly traded corporations. There will be a discussion about the competing conceptions which emerge in addressing the regulation of women on boards in the United States and Canada and why each jurisdiction implemented its policy when it did. The conceptions arising out of questions about under-representation of women on boards tend to fall within two categories: business case rationales and normative rationales. Given the competing conceptions of this issue, this paper will attempt to ...
Cacs And Doorknobs,
2019
Georgetown University Law Center
Cacs And Doorknobs, Anna Gelpern, Jeromin Zettelmeyer
Georgetown Law Faculty Publications and Other Works
In response to debt crises, policy makers often feature Collective Action Clauses (CACs) in sovereign bonds among the pillars of international financial architecture. However, the content of official pronouncements about CACs suggests that CACs are more like doorknobs: a process tool with limited impact on the incidence or ultimate outcome of a debt restructuring. We ask whether CACs are welfare improving and, if so, whether they are pillars or doorknobs. The history of CACs in corporate debt suggests that CACs can be good, bad or unimportant depending on their vulnerability to abuse and the available alternatives, including bankruptcy and debt ...
Direct Listing: How Spotify Is Streaming On The Nyse And Why The Sec Should Press Play,
2019
Pepperdine University
Direct Listing: How Spotify Is Streaming On The Nyse And Why The Sec Should Press Play, Cody L. Lipke
The Journal of Business, Entrepreneurship & the Law
This Note proposes that given Spotify’s successful launch on the NYSE, direct listings will become increasingly popular—primarily for start-ups but also as an exit strategy for VC and PE firms in their nonpublic investments. Part II of this Note will discuss the process of “going public” via an IPO or a direct listing. Part III will use Spotify as an illustrative example of the direct listing process. Part IV will consider the advantages and disadvantages of direct listing. Part V will conclude that the Securities and Exchange Commission (SEC or the Commission) should embrace the direct listing process ...
Beyond Intermediation: A New (Fintech) Model For Securities Holding Infrastructures,
2019
University of Pennsylvania Law School
Beyond Intermediation: A New (Fintech) Model For Securities Holding Infrastructures, Charles W. Mooney Jr.
Faculty Scholarship at Penn Law
Publicly traded securities generally are held by investors in securities accounts with intermediaries such as stockbrokers and central securities depositories—intermediated securities. For many investors this is the only practical means of holding and dealing with securities. These intermediated holding systems (IHSs) impose a variety of risks and costs. Investors are exposed to intermediary risk (default or insolvency of an intermediary holding securities) as well as impediments to the exercise of rights such as voting and asserting claims against securities issuers. The nontransparency of IHSs imposes other social costs, such as obstacles to anti-money laundering enforcement. The emergence of FinTech ...
Securities Regulation,
2019
Osgoode Hall Law School of York University
Breaking Up The Focus On Relationships For Nonpecuniary Insider Trading Personal Benefits,
2019
Fordham University School of Law
Breaking Up The Focus On Relationships For Nonpecuniary Insider Trading Personal Benefits, Bradley Larkin
Fordham Law Review
In 1983, the U.S. Supreme Court adopted the “personal benefit” requirement as an objective test for insider trading to help determine when confidential information is tipped for an improper purpose. Under this test, a tipper acts improperly by receiving a personal benefit for sharing confidential, nonpublic information, even if the tipper does not trade using the information. For instance, when a tipper leaks confidential information to a trading friend or relative, the tipper benefits personally because this amounts to trading on the confidential information and then gifting the profits. The personal benefit requirement is applied differently among the circuits ...
Table Of Contents,
2019
Seattle University School of Law
Table Of Contents, Seattle University Law Review
Seattle University Law Review
No abstract provided.
Crowdfunding Signals,
2019
William & Mary Law School
Crowdfunding Without The Crowd,
2019
William & Mary Law School
Crowdfunding Without The Crowd, Darian M. Ibrahim
Darian M. Ibrahim
No abstract provided.
Making A Market For Corporate Disclosure,
2019
William & Mary Law School
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,
2019
William & Mary Law School
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,
2019
William & Mary Law School
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,
2019
William & Mary Law School
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 ...
Discrimination Platforms,
2019
William & Mary Law School
Discrimination Platforms, Kevin S. Haeberle
Kevin Scott Haeberle
Off-exchange trading today has become defined by its opacity. Indeed, the framing of this symposium on What Happens in the Dark: An Exploration of Dark Pools and High Frequency Trading and its goal of "exam[ing] a portion of the modern market that remains largely outside of the public eye"l is much in line with contemporary thinking in policymaking, academic, and industry circles alike. Yet, off-exchange trading through "dark" pools and the like is far more transparent than thought, and exchange trading the opposite. In fact, much trading through off-exchange platforms is even more transparent than that facilitated by ...