Securities Law Commons^™

The Regulation Of Trading Markets: A Survey And Evaluation, Paul G. Mahoney, Gabriel V. Rauterberg

Book Chapters

This chapter was prepared for a conference exploring the desirability and structure of a new special study of the securities markets. Our objective is not to resolve all of the questions that commentators have raised about the new equity markets, but to lay the groundwork for a new special study by surveying the state of market regulation, identifying issues, and offering preliminary evaluations.

Stock Market Manipulation And Its Regulation, Merritt B. Fox, Lawrence R. Glosten, Gabriel Rauterberg

Articles

More than eighty years after federal law first addressed stock market manipulation, the federal courts remain fractured by disagreement and confusion concerning manipulation law's most foundational issues. There remains, for example, a sharp split among the federal circuits concerning manipulation law's central question: Whether trading activity alone can ever be considered illegal manipulation under federal law? Academics have been similarly confused-economists and legal scholars cannot agree on whether manipulation is even possible in principle, let alone on how to properly address it in practice.

Investors' Paradox, Anita K. Krug

Articles

For the first time in an era, new investment products for smaller ("retail ") investors are emerging. These products are mutual funds that engage in the types of trading and investment activities that have long been the province of sophisticated investors. Accordingly, the new funds (called "alternative funds") promise to reduce the gulf between retail investors and their sophisticated counterparts, in terms of portfolio diversification and investment results.

This Article describes the complex mix of factors that spawned alternative funds and critically evaluates the funds' potential, the first scholarly work to do so. It additionally unearths the paradox that impedes the ...

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

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 ...

Morality And Securities Fraud, Jayme Herschkopf

Marquette Law Review

Securities fraud features prominently in conversations about financial reform, and for good reason. In addition to the disproportionate number of securities fraud lawsuits and government actions filed every year, securities fraud case law is frequently consulted as an analytical aid for other types of corporate fraud. And yet, in discussing the interpretation and application of the securities laws, scholars, judges, and lawmakers alike have largely overlooked a feature of securities fraud that could offer significant assistance in many challenging areas: namely, that securities fraud, including civil securities fraud, has a pronounced moral dimension.

This Article explores the role that moral ...

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

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 ...

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

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 ...

Crowdfunding Signals, Darian M. Ibrahim

Popular Media

No abstract provided.

Murky Skies Ahead! Analyzing Executive Authority And Future Policies Regarding Corporate Disclosure Of Greenhouse Gases, Chandler Crenshaw

William & Mary Environmental Law and Policy Review

No abstract provided.

Break From Tradition: Questioning The Primacy Of Self-Regulation In American Securities Law, John I. Sanders

Michigan Business & Entrepreneurial Law Review

This Comment outlines the circular path of American securities law—one that begins and ends with the primacy of self-regulation. Part I of this paper describes American securities law between 1792 and 1911 (the “Buttonwood Era”). In this era, a group of New York stock brokers utilized private contract law to create securities regulation for their private club, thereby establishing a tradition of self-regulation. Part II describes a short period of history in which individual states attempted to regulate the se-curities market through state statutes, the so-called “Blue Sky Laws.” Part III details the creation of the federal securities 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

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

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

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 ...

Leverage: State Enforcement Actions In The Wake Of The Robo-Sign Scandal, Raymond H. Brescia

Maine Law Review

In the fall of 2010, the revelations that tens of thousands of foreclosure filings across the nation were likely fraudulent—if not outright criminal—sparked a nation-wide investigation by all fifty state attorneys general to assess the extent of the scandal and its potential impacts, but also to consider likely legal and policy responses to such behavior. One of the tools at the state attorneys general’s disposal that might rein in this behavior includes each state’s Unfair and Deceptive Acts and Practices (UDAP) laws. Such laws typically prohibit “unfair” and “deceptive” practices, which are described loosely in these ...

A Global Body And A Global Problem: The Curious Case Of The G-20 And Securities Regulation, Tamilla Nurizada

Cornell International Law Journal

No abstract provided.

Reviving Reliance, Ann M. Lipton

Fordham Law Review

This Article explores the misalignment between the disclosure requirements of the federal securities laws and the private causes of action available to investors to enforce those requirements. Historically, federally mandated disclosures were designed to allow investors to set an appropriate price for publicly traded securities. Today’s disclosures, however, also enable stockholders to participate in corporate governance and act as a check on managerial misbehavior. To enforce these requirements, investors’ chief option is a claim under the general antifraud statute, section 10(b) of the Securities Exchange Act of 1934. But courts are deeply suspicious of investors’ attempts to use ...