Better Bounty Hunting: How The Sec's New Whistleblower Program Changes The Securities Fraud Class Action Debate, 2015 Northwestern Pritzker School of Law
Better Bounty Hunting: How The Sec's New Whistleblower Program Changes The Securities Fraud Class Action Debate, Amanda M. Rose
Northwestern University Law Review
No abstract provided.
Managing Cyberthreat, 2015 Author, Educator, Entrepreneur & Professional Corporate Director
Managing Cyberthreat, Lawrence J. Trautman
Lawrence J. Trautman Sr.
Cyber security is an important strategic and governance issue. However, because most corporate CEOs and directors have no formal engineering or information technology training, it is understandable that their lack of actual cybersecurity knowledge is problematic. Particularly among smaller companies having limited resources, knowledge regarding what their enterprise should actually be doing about cybersecurity can’t be all that good. My goal in this article is to explore the unusually complex subject of cybersecurity in a highly readable manner. First, an examination of recent threats is provided. Next, governmental policy initiatives are discussed. Third, some basic tools that can be used …
Major Investor Losses Due To Conflicted Advice: Brokerage Industry Advertising Creates The Illusion Of A Fiduciary Duty, 2015 St. John's University School of Law
Major Investor Losses Due To Conflicted Advice: Brokerage Industry Advertising Creates The Illusion Of A Fiduciary Duty, Joseph C. Peiffer, Christine Lazaro
Faculty Publications
(Excerpt)
No national standard exists today requiring brokerage firms to put their clients’ interests first by avoiding making profits from conflicted advice. In the five years since the passage of the Dodd Frank Act, inaction by the Securities and Exchange Commission (SEC) on a fiduciary standard has cost American investors nearly $80 billion, based on estimated losses of $17 billion per year.
Amid encouraging recent signs of possible action from the Department of Labor and the SEC, there is a compelling case to be made for a ban on conflicted advice in order to protect investors. In the absence of …
The Costs Of Mandatory Cost-Benefit Analysis In Sec Rulemaking, 2015 Indiana University Maurer School of Law
The Costs Of Mandatory Cost-Benefit Analysis In Sec Rulemaking, Donna M. Nagy
Articles by Maurer Faculty
Cost-benefit analysis can be a valuable tool when deployed at the Securities and Exchange Commission's discretion to improve its rulemaking process and the overall quality of SEC rules. However, when a cost-benefit analysis obligation is imposed externally whether from an explicit statutory command or from a de facto requirement enforced through judicial review-the costs of that mandatory cost-benefit analysis can be quite substantial. This Article identifies and explores the qualitative costs that that have already been incurred, and are bound to continue, if the adequacy of the SEC's cost-benefit analysis remains subject to extensive judicial scrutiny. These costs will only …
Stock-Market Law And The Accuracy Of Public Companies’ Stock Prices, 2015 William & Mary Law School
Stock-Market Law And The Accuracy Of Public Companies’ Stock Prices, Kevin S. Haeberle
Faculty Publications
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 information about firms’ …
The Halfway Point Between Barbary Coast And Shangri-La: Extraterritoriality And The Viability Of The Economic Reality Method Post-Parkcentral Global Hub Ltd. V. Porche Automobile Holdings Se, 2015 American University Washington College of Law
The Halfway Point Between Barbary Coast And Shangri-La: Extraterritoriality And The Viability Of The Economic Reality Method Post-Parkcentral Global Hub Ltd. V. Porche Automobile Holdings Se, Kaitlin A. Bruno
American University Law Review
No abstract provided.
New Weaknesses: Despite A Major Win, Arbitration Decisions In 2014 Increase The Us’S Future Exposure To Litigation And Liability, 2015 Columbia Law School, Columbia Center on Sustainable Investment
New Weaknesses: Despite A Major Win, Arbitration Decisions In 2014 Increase The Us’S Future Exposure To Litigation And Liability, Lise Johnson
Columbia Center on Sustainable Investment Staff Publications
In 2014, the US continued its overall record of success in defending investment treaty claims. But it did suffer losses on a number of important issues, and those losses will render the US (and its treaty parties) vulnerable to future claims, litigation expense, and liability. The US’s recent losses, which have thus far been largely ignored in commentary on the US’s experiences in investment arbitration, are highlighted in this briefing note.
Political Uncertainty And The Market For Ipos, 2015 Florida State University College of Law
Political Uncertainty And The Market For Ipos, Jay B. Kesten, Murat C. Mungan
Scholarly Publications
No abstract provided.
Federal Securities Fraud Litigation As A Lawmaking Partnership, 2015 University of Pennsylvania Carey Law School
Federal Securities Fraud Litigation As A Lawmaking Partnership, Jill E. Fisch
All Faculty Scholarship
In its most recent Halliburton II decision, the Supreme Court rejected an effort to overrule its prior decision in Basic Inc. v. Levinson. The Court reasoned that adherence to Basic was warranted by principles of stare decisis that operate with “special force” in the context of statutory interpretation. This Article offers an alternative justification for adhering to Basic—the collaboration between the Court and Congress that has led to the development of the private class action for federal securities fraud. The Article characterizes this collaboration as a lawmaking partnership and argues that such a partnership offers distinctive lawmaking advantages. …
The Broken Buck Stops Here: Embracing Sponsor Support In Money Market Fund Reform, 2015 University of Pennsylvania Carey Law School
The Broken Buck Stops Here: Embracing Sponsor Support In Money Market Fund Reform, Jill E. Fisch
All Faculty Scholarship
Since the 2008 financial crisis, in which the Reserve Primary Fund “broke the buck,” money market funds (MMFs) have been the subject of ongoing policy debate. Many commentators view MMFs as a key contributor to the crisis because widespread redemption demands during the days following the Lehman bankruptcy contributed to a freeze in the credit markets. In response, MMFs were deemed a component of the nefarious shadow banking industry and targeted for regulatory reform. The Securities and Exchange Commission’s (SEC) misguided 2014 reforms responded by potentially exacerbating MMF fragility while potentially crippling large segments of the MMF industry.
Determining the …
It's Not Just About The Money: A Comparative Analysis Of The Regulatory Status Of Bitcoin Under Various Domestic Securities Laws, 2015 American University Washington College of Law
It's Not Just About The Money: A Comparative Analysis Of The Regulatory Status Of Bitcoin Under Various Domestic Securities Laws, Vesna Harasic
American University Business Law Review
No abstract provided.
The Financial Industry's Plan For Resolving Failed Megabanks Will Ensure Future Bailouts For Wall Street, 2015 George Washington University Law School
The Financial Industry's Plan For Resolving Failed Megabanks Will Ensure Future Bailouts For Wall Street, Arthur E. Wilmarth Jr.
Georgia Law Review
Wall Street has achieved a remarkable political comeback from the financial crisis of 2007-2009. Public anger over bailouts of large financial institutions spurred Congress to pass the Dodd- Frank Wall Street Reform and Consumer Protection Act (Dodd- Frank) in July 2010.1 Megabanks, however, used their political influence to weaken Dodd-Frank's provisions, and they have pursued a determined campaign since 2010 to undermine Dodd- Frank's implementation. A primary goal of Dodd-Frank is to end "too big to fail" (TBTF) treatment for systemically important financial institutions (SIFIs) and their creditors. During the debates over Dodd-Frank, however, Wall Street defeated two major initiatives …
Bank Regulation And Securitization: How The Law Improved Transmission Lines Between Real Estate And Banking Crises, 2015 University of Colorado Law School
Bank Regulation And Securitization: How The Law Improved Transmission Lines Between Real Estate And Banking Crises, Erik F. Gerding
Georgia Law Review
Financial crises take many forms. Real estate crises can devastate economies.' So too can bank crises. Stock market crashes can precipitate crises of their own. The "subprime crisis" represents the confluence and worst of all three; like three cyclones merging together in warm offshore waters, these three kinds of crises generated even more destructive force when conjoined. The panic that took shape in U.S. real estate and capital markets in 2007 represents another example in a long historical line of intertwined banking and real estate crises. Securitization served as a new coupling rod joining cycles in real estate and banking …
The Macroprudential Turn: From Institutional 'Safety And Soundness' To Systematic 'Financial Stability' In Financial Supervision, 2015 Cornell Law School
The Macroprudential Turn: From Institutional 'Safety And Soundness' To Systematic 'Financial Stability' In Financial Supervision, Robert C. Hockett
Cornell Law Faculty Publications
Since the global financial dramas of 2008-09, authorities on financial regulation have come increasingly to counsel the inclusion of macroprudential policy instruments in the standard ‘toolkit’ of finance-regulatory measures employed by financial supervisors. The hallmark of this perspective is its focus not simply on the safety and soundness of individual financial institutions, as is characteristic of the traditional ‘microprudential’ perspective, but also on certain structural features of financial systems that can imperil such systems as wholes. Systemic ‘financial stability’ thus comes to supplement, though not to supplant, institutional ‘safety and soundness’ as a regulatory desideratum.
The move from primarily micro- …
Memo To The Obama Administration On The U.S. National Action Plan On Responsible Business Conduct, 2015 Columbia Law School, Columbia Center on Sustainable Development
Memo To The Obama Administration On The U.S. National Action Plan On Responsible Business Conduct, Kaitlin Y. Cordes, Lisa E. Sachs
Columbia Center on Sustainable Investment Staff Publications
In January 2015, CCSI sent a memo to President Obama to provide input on the U.S. National Action Plan on responsible business conduct. The memo applauded the U.S. Government’s decision to develop a National Action Plan consistent with the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises, noting that responsible and rights-respecting outward investment can support sustainable development in host countries, and that the U.S. Government has an important role to play in promoting responsible business operations. The memo urged the government to explore in particular how the National Action Plan can address …
Suitability Obligations Applicable To Securities And Annuities, 2015 St. John's University School of Law
Suitability Obligations Applicable To Securities And Annuities, Christine Lazaro, Benjamin P. Edwards
Faculty Publications
(Excerpt)
Brokers are subject to different regulatory obligations depending on the type of product being recommended to a customer. Generally, brokers are subjected to overlapping oversight and are regulated at both the federal and state level. This oversight becomes even further complicated when a broker sells a product that spans multiple regulatory schemes such as certain annuities, which may be both insurance and securities products.
This article describes a broker’s suitability obligations under the new suitability rule when making recommendations which are covered by that rule. Next, it describes the additional obligations that a broker has when making a recommendation …
The Case For The Regulation Of Bitcoin Mining As A Security, 2015 Georgia Gwinnett College
The Case For The Regulation Of Bitcoin Mining As A Security, Benjamin W. Akins, Jason M. Gordon, Jennifer L. Chapman
Benjamin W. Akins
Bitcoin is rapidly increasing in use throughout the world. Instrumental to the Bitcoin system, the process for introducing new bitcoin into the system is known as “mining.” Mining involves the use of powerful computer systems and complex, computational algorithms to verify or validate prior bitcoin transactions. The reward for successfully undertaking this process is the creation and award of new bitcoin to the miner. Bitcoin mining has become a tedious and difficult process. The race to verify transactions, and thereby earn bitcoin, necessitates more sophisticated processes for verification and greater computational power.
Many bitcoin miners band together in groups called …
The Alternative Investment Market: Helping Small Enterprises Grow Public, 2015 SelectedWorks
The Alternative Investment Market: Helping Small Enterprises Grow Public, Jonathan R. Hornok
Jonathan R. Hornok
The Alternative Investment Market (“AIM”) of the London Stock Exchange is a twenty-year experiment in light securities regulation for small companies. The empirical literature shows that the AIM underperforms premier exchanges; however, this literature should not be taken as evidence that the AIM experiment is a failure, rather that the AIM serves a unique niche. In contrast to companies listing on premier exchange, those listing on the AIM do not undergo significant changes in ownership, control, and leverage after an initial public offering (“IPO”). Instead, these changes occur over time, if the company grows. This Article argues, based on the …
The Bankruptcy Of The Securities Market Paradigm, 2015 Latham & Watkins
The Bankruptcy Of The Securities Market Paradigm, Stephen P. Wink
Stephen P Wink
The current paradigm of securities market regulation in the United States rests on the Efficient Market Hypothesis, a theory that has been largely discredited by modern economics and behavioral finance. The Efficient Market Hypothesis assumes that the price of securities in the market accurately incorporates and reflects all available material information. Building on this notion, regulators have assumed that better information leads to healthier markets—and therefore regulation that enhances disclosure and transparency leads to healthier markets. Over time, this reasoning has elevated these tools, disclosure and transparency, to ends in themselves, despite the flaws in the Efficient Market Hypothesis. Although …
Are Investors’ Gains And Losses From Securities Fraud Equal Over Time?, 2015 University of Michigan Law School
Are Investors’ Gains And Losses From Securities Fraud Equal Over Time?, Alicia J. Davis
Alicia Davis
Leading securities regulation scholars argue that compensating securities fraud victims is inefficient because diversified investors that trade frequently (generally, institutional investors) are as likely to gain from trading in fraud-tainted stocks as they are to suffer harm from doing so. In other words, institutional investors have no expected net losses from fraud over the long term and are effectively hedged against fraud risk. Moreover, individual investors can protect themselves from fraud, as well, by investing through diversified institutional intermediaries. In this Article, I demonstrate, using both probability theory and observational and computer-simulated trading data, that the argument of the compensation …