Digital Commons Network^™

Regulating Robo-Advisors In An Age Of Generative Artificial Intelligence, Daniel Schwarcz, Tom Baker, Kyle Logue

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New generative artificial intelligence (“AI”) tools can increasingly engage in personalized, sustained, and natural conversations with users. This technology has the capacity to reshape the financial services industry, making customized expert financial advice broadly available to consumers. However, AI’s ability to convincingly mimic human financial advisors also creates significant risks of large-scale financial misconduct. Which of these possibilities becomes reality will depend largely on the legal and regulatory rules governing “robo-advisors” that supply fully automated financial advice to consumers.

This Article consequently critically examines this evolving regulatory landscape, arguing that current U.S. rules fail to adequately limit the risk that …

Tossing Sand In The Regulatory Gears: Hurdles To Policy Progress In The Supreme Court, Nina A. Mendelson

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In the last few years, the Supreme Court has been a source of seismic change. In Dobbs v. Jackson Women’s Health Organization, the Court overruled Roe v. Wade, which had protected the right to abortion for nearly fifty years. In Loper Bright Enterprises v. Raimondo, the Court abandoned so-called Chevron deference to particular categories of administrative agency interpretations, a doctrine viewed as bedrock for over forty years. Humphrey’s Executor v. United States, the 1935 ruling validating independent multi-member commissions such as the Federal Trade Commission, Securities and Exchange Commission, and Federal Communications Commission, may soon join the others on the …

Conducting Research With Highly Portable Mri In Community Settings: A Practical Guide To Navigating Ethical Issues And Elsi Checklist, Francis X. Shen, Susan Wolf, Frances Lawrenz, Donnella S. Comeau, Barbara J. Evans, Damien Fair, Martha J. Farah, Michael Garwood, S. Duke Han, July Illes, Jonathan D. Jackson, Eran Klein, Matthew S. Rosen, Efraín Torres, Paul Tuite, J. Thomas Vaughan

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Highly portable and accessible MRI technology will allow researchers to conduct field-based MRI research in community settings. Previous guidance for researchers working with fixed MRI does not address the novel ethical, legal, and societal issues (ELSI) of portable MRI (pMRI). Our interdisciplinary Working Group (WG) previously identified 15 core ELSI challenges associated with pMRI research and recommended solutions. In this article, we distill those detailed recommendations into a Portable MRI Research ELSI Checklist that offers practical operational guidance for researchers contemplating using this technology.

Founder Worship, Effective Altruism, And Corporate Governance, Jennifer S. Fan, Xuan-Thao Nguyen

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Founders are the heart of any startup. Oftentimes, they are given considerable latitude in managing a company, particularly if they are hailed as a visionary founder in a pathbreaking new industry. Additionally, it is assumed that underpinning their actions is the desire to do good. Unfortunately, sometimes this leads to what we term founder worship where the promise of the founder and the innovation may lead to perverse outcomes because too much control is ceded to the founder and there is a lack (or sometimes complete absence of) corporate governance. When unlimited control is coupled with "do gooderism," which in …

A Modern Defense Of Simple Rules For A Complex World, Richard Epstein

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My 1995 book Simple Rules for a Complex World articulated a general proposition that, in most situations, simple legal rules perform better in two key dimensions: (1) they are simpler to interpret and enforce, and (2) they generate efficient incentives on the parties to whom they apply. I then applied that view to matters of general legal theory, to matters of environmental law, and to disputes over labor. These principles apply to all forms of legal regulation, but in this Article, I shall limit my analysis to the five articles in this Collection. These are by Richard Revesz on global …

Deepfake 2024: Will Citizens United And Artificial Intelligence Together Destroy Representative Democracy?, Richard Painter

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Deepfakes – computer generated counterfeit videos and audios of people saying and doing things they never said or did – are proliferating on social media and increasingly will be used to target candidates in elections. Citizens United v. FEC, and cases decided in its aftermath, have opened the floodgates of dark money funded electioneering communications, and some of this money will be spent on deepfakes made and disseminated by persons unknown. Some deepfakes may originate outside the United States, as they become a new instrument for foreign interference in U.S. elections.

The Federal Election Commission (FEC) has been asked by …

Carrie Menkel-Meadow: Dispute Resolution In A Feminist Voice, Andrea K. Schneider

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The presence of women in the law has changed the law’s substance, practice, and process. Carrie Menkel-Meadow, whose scholarship centers on this theme, is one such revolutionary woman.

Professor Menkel-Meadow, who I am proud to call my colleague, co-author, and friend (hereinafter referred to as Carrie), began her career in 1977 with a series of simple questions that sparked a breathtaking body of work. Carrie probed the depth of male domination in the realm of law and wondered what changes female representation might engender. In particular, she focused her inquiry on the value orientation each respective gender might bring to …

Stripped Of Funds, Stripped Of Rights: A Critique Of Guardianship As A Remedy For Elder Financial Harm, Rebekah Diller, Leslie Salzman

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There is a growing consensus in the United States and abroad recognizing the right to “legal capacity”—the right to make legally binding decisions for oneself—as a basic human right. Despite this recognition, adult guardianship—the state court procedure by which a person is declared incapacitated and stripped of decision-making rights—remains a widely used tool, particularly for older adults who have suffered financial exploitation or loss. For this population, guardianship is considered an unpleasant yet necessary remedy to address their financial harms. But what if the cure does not really work as intended, while other, less intrusive means could prevent and redress …

From The Frontlines Of The Modern Movement To End Forced Arbitration And Restore Jury Rights, F. Paul Bland, Myriam E. Gilles, Tanuja Gupta

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No abstract provided.

(Re)Visions Of The Outre-Mer: Looking At The Male Gaze In Jacques Feyder’S Le Grand Jeu (1934), Barry Nevin

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Cinéma colonial is regarded by certain scholars as a highly conventionalised and commercialised film practice that grants spectators a sense of control over the potentially threatening colonial Other, and Belgian director Jacques Feyder has been subject to particularly harsh criticism in this regard. This article argues that Feyder’s Le Grand Jeu (1934), which depicts a young legionnaire’s relationship with a cabaret singer who bears an uncanny resemblance to a previous lover who jilted him in Paris, challenges dominant tendencies in portrayals of gender and colonialism in French cinema of the 1930s. Drawing on the relationship between Laura Mulvey’s theorisation of …

Regulatory Enforcement Under New York's Martin Act: From Financial Fraud To Global Warming, Richard A. Epstein

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No abstract provided.

Public Employee Speech And Magarian’S Dynamic Diversity, Heidi Kitrosser

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No abstract provided.

The Necessity Of The Good Person Prosecutor, Jessica A. Roth

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In a 2001 essay, Professor Abbe Smith asked the question whether a good person—i.e., a person who is committed to social justice—can be a good prosecutor. Although she acknowledged some hope that the answer to her question could be “yes,” Professor Smith concluded that the answer then was “no”—in part because she saw individual prosecutors generally as having very little discretion to “temper the harsh reality of the criminal justice system.” In this Online Symposium revisiting Professor Smith’s question seventeen years later, my answer to her question is “yes”—a good person can be a good prosecutor.

The Special Value Of Public Employee Speech, Heidi Kitrosser

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In this article, I use the 2014 decision of Lane v. Franks as a jumping off point to revisit the rule of Garcetti v. Ceballos, that speech conducted pursuant to one’s public employment is unprotected by the First Amendment. I explain that Garcetti is emblematic of the Supreme Court’s failure to dig beneath the surface of its own long-standing acknowledgment that public employee speech holds special value. If one tunnels into that subterrane, one finds that the value of public employee speech is a function not just of content, but of form. Public employees play a special role under the …

Journalism Standards And "The Dark Arts": The U.K.'S Leveson Inquiry And The U.S. Media In The Age Of Surveillance, Lili Levi

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No abstract provided.

Self-Regulation For The Mortgage Industry, M. Todd Henderson

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No abstract provided.

Deferred Prosecution And Non-Prosecution Agreements And The Erosion Of Corporate Criminal Liability, David M. Uhlmann

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On April 5, 2010, a massive explosion killed twenty-nine miners at Massey Energy's Upper Big Branch mine near Montcoal, West Virginia. Following the explosion, President Barack Obama vowed that the U.S. Department of Labor would conduct "the most thorough and comprehensive investigation possible" and work with the U.S. Department of Justice ("Justice Department" or the "Department") to address any criminal violations. Later in the month, the President and Vice President flew to West Virginia to eulogize the victims and comfort their families. It was the nation's worst coal mining disaster in forty years. The tragic loss of life at the …

The Evolutionary Biology Of Fungi And Fraud, Wendy Gerwick Couture

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In this Article, the authors-a law professor and a biologist-offer a fresh perspective on the use of broad federal fraud statutes to combat fraud by drawing a comparison with the use of multi-site fungicides to combat plant disease. Multi-site fungicides are effective at preventing the evolution of resistant strains of fungi, but they are subject to increased regulatory scrutiny amid concerns about off-target toxicity. Similarly, broad fraud statutes serve as a stopgap to prevent the evolution of new types of fraud, but they are widely criticized as unduly vague and as interfering with the operation of specific fraud statutes. Biologists' …

The Political Economy Of Fraud On The Market, William Wilson Bratton, Michael L. Wachter

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The fraud-on-the-market class action no longer enjoys much academic support. The justifications traditionally advanced by its defenders-compensation for out-of-pocket loss and deterrence of fraud-are thought to have failed due to the action's real world dependence on enterprise liability and issuer-funded settlements. The compensation justification collapses when considered from the point of view of different types of shareholders. Well-diversified shareholders' receipts and payments of damages balance over time and amount to a wash before payment of litigation costs. The shareholders arguably in need of compensation--fundamental value investors who rely on published reports--are undercompensated due to pro rata distribution of settlement proceeds …

The Rise In Elder Bankruptcy Filings And The Failure Of U.S. Bankruptcy Law, John A. E. Pottow

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Recent empirical legal scholarship on the consumer bankruptcy system has uncovered a marked rise in the proportion of elder Americans filing for relief under the Bankruptcy Code. But these studies have not probed the reasons behind that rise, an omission this Article seeks to address. Professor John Pottow and colleagues recently assembled the new dataset of the Consumer Bankruptcy Project (CBP), the largest national sample of consumer debtors in this country, which he uses to explore the sources of elder bankruptcy. The findings are both striking and ominous. While multiple factors, such as health problems and medical debts, contribute to …

Institutionalization, Investment Adviser Regulation, And The Hedge Fund Problem, Anita K. Krug

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This Article contends that more effective regulation of investment advisers could be achieved by recognizing that the growth of hedge funds, private equity funds, and other private funds in recent decades is a manifestation of institutionalization in the investment advisory context. That is, investment advisers today commonly advise these “institutions,” which have supplanted other, smaller investors as advisory clients.

However, the federal securities statute governing investment advisers, the Investment Advisers Act of 1940, does not address the role of private funds as institutions that now intermediate those smaller investors' relationships to investment advisers. Consistent with that failure, investment adviser regulation …

The Nondischargeability Of Student Loans In Personal Bankruptcy Proceedings: The Search For A Theory, John A. E. Pottow

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In fiscal year 2002, approximately 5.8 million Americans borrowed $38 billion (USD) in federal student loans. This was more than triple the $11.7 billion borrowed in 1990. As a rule of thumb, tuition has been increasing at roughly double the rate of inflation in recent years. This troubling trend of accelerating tuition, coupled with the fact that real income has stagnated for men and increased only modestly for women over the past two decades, means that more and more students are going to need to turn to borrowed money to finance their degrees absent a radical restructuring of the postsecondary …

The Sec At 70: Time For Retirement?, Adam C. Pritchard

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The Article proceeds as follows. Part I explains the pathologies of the SEC and explores the relation between those pathologies and the SEC's status as an independent agency. Part II then outlines an alternative regulatory structure primarily situated within the executive branch. I also argue that such a relocation of authority would enhance regulatory effectiveness while simultaneously reducing the cost of excessive regulation. The Article concludes with some thoughts about the viability of my proposal.

Capitalism And Freedom -- For Whom? Feminist Legal Theory And Progressive Corporate Law,, Kellye Y. Testy

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Beginning at least in the 1980s, the version of corporate law and governance prevailing in the U.S. (as well as widely exported to other nations) was a radically privatized one, treating the corporation as a contractual arrangement for maximizing shortterm share price in a laissez faire global marketplace. Though many robust and varied social movements, many of which were bolstered by the 1999 WTO protests in Seattle, have been and are engaged in challenging this hegemony from many angles, few have found their way into corporate law reform. That is not to say, however, that there are no progressive legal …

When Does Competition Improve Regulation?, Frank H. Easterbrook

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No abstract provided.

Enron And The Dark Side Of Shareholder Value, William Wilson Bratton

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This Article addresses the implications that the Enron collapse holds out for the self-regulatory system of corporate governance. The case shows that the incentive structure that motivates actors in the system generates much less powerful checks against abuse than many observers have believed. Even as academics have proclaimed rising governance standards, some standards have declined, particularly those addressed to the numerology of shareholder value. The Article's inquiry begins with Enron's business plan. The Article asserts that there may be more to Enron’s "virtual firm" strategy than meets the eye beholding a firm in collapse. The Article restates the strategy as …

The Beginning Of Herstory For Corporate Law, Kellye Y. Testy

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In The Gender Implications of Corporate Governance Change, Janis Sarra presents what has until now seemed oxymoronic to many: a feminist economic analysis of corporate governance in the global marketplace. In so doing, she joins a growing chorus of corporate governance scholars who are seeking to advance an alternative vision to the neoclassical, shareholder-centered model that is not only dominant in the United States, but is also widely exported-even to nations that do not share similar institutional configurations that support such a model. This diverse group of scholars--whose approaches have been labeled variously as "progressive," "communitarian," and "socio-economic,"--do not …

The Constitution And Encryption Regulation: Do We Need A "New Privacy"?, A. Michael Froomkin

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No abstract provided.

Liberty, Patriarchy, And Feminism, Richard A. Epstein

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No abstract provided.

The Importance Of Being Honset - Lessons From An Era Of Large-Scale Financial Fraud, Anita Ramasastry, Thomas C. Baxter

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In recent years, we have seen a series of staggering losses sustained by large multinational banking organizations. The Daiwa Bank ("Daiwa"), Barings Bank ("Barings") and the Bank of Credit and Commerce International ("BCCI") are three prominent examples. Each of these institutions suffered losses in excess of $1 billion through unauthorized, fraudulent or unlawful conduct by management. In each of these institutions, there existed a key bank official who broke through what might be considered a billion dollar barrier. At Daiwa Bank's New York Branch, there was Toshihbe Iguchi, its Senior Vice President and bond trader. Barings Bank had Nick Leeson, …