Digital Commons Network^™

The Role Of Online Disinhibition On Social Media Users' Privacy Concerns And Behaviors, Lisa Thompson, Sinyong Choi

Faculty Articles

As social media platforms become central to digital interactions, concerns about both privacy and the disclosure of personal information have evolved. Online disinhibition—the psychological detachment users experience in digital spaces that distance their online behaviors from offline consequences—may shape perceptions of privacy risks, particularly on social media platforms like TikTok. This study examines the relationships between online disinhibition and users’ privacy concerns and protective behaviors while accounting for individuals’ sense of gratification, media awareness, identity, and experience. By exploring dimensions such as anonymity and invisibility, we investigate how these factors are linked to self-disclosure and diminished privacy caution. Findings from …

Criminal Investors, Andrew K. Jennings

Faculty Articles

This Article reassesses the culpability of those who invest in law-breaking firms. Prosecutors currently treat investors as victims of corporate wrongdoing rather than as actors who might bear responsibility for it. This Article observes, though, that investment can facilitate, and even cause, illicit corporate activity. When investors intentionally contribute to those effects, substantive criminal law imposes liability on them just the same as it does on accomplices, conspirators, or principals in other contexts. Despite this formal parity, however, investor criminal liability is more a theoretical proposition than a practical reality.

This Article questions that status quo by asking whether and …

Everything New Is Old Again: The Coming Metaverse, Platforms As Premises, And Addressing Harms That Occur Behind The Veil Of Scale, Lara Putnam, Jena Martin

Faculty Articles

Increasingly, social media companies have engaged in the creation, development, and deployment of "worlds" within a virtual reality setting, leading to significant interactions among users within these engineered spaces. However, this expansion has also been accompanied by harms. While some harms are unique to immersive reality technology, many mirror harms that occur in the analog environment, including fraud, theft, verbal abuse, and child sexual exploitation. Others replicate harms that have already exploded in non-immersive online spaces, including image-based sexual exploitation, cyberstalking, and invasion of privacy. Unfortunately, the architecture and infrastructure of these spaces has created what we coin here to …

The Small Business Killer: How Fincen Enforcement Of The Cta Could Destroy The Last Bastion Of The American Dream, Samantha M. Alecozay

Faculty Articles

The Corporate Transparency Act (CTA), passed into law in 2021 and made effective January 1, 2024, mandates the creation of a nationwide database that collects owner information of certain legal entities to help combat money laundering and other illicit financial activities. The CTA requires that the legal entity owners provide necessary information directly to the federal government, rather than relying on state and/or federal government officials to collect the information on their behalf. Further, failure to comply may result in the legal entity and owners incurring significant civil penalties of up to $591 per day of violation and even criminal …

Role-Reversibility, Ai, And Equitable Justice — Or: Why Mercy Cannot Be Automated, Stephen E. Henderson, Kiel Brennan-Marquez

Faculty Articles

A few years ago, we developed the concept of “role-reversibility” in AI governance: the idea that it matters whether a party exercising judgment is reciprocally vulnerable to the effects of judgment. This idea, we argued, supplies a deontic reason to maintain certain spheres of human judgment even if (or when) truly intelligent machines become demonstrably superior in every utilitarian sense. While computer science remains far from that holy grail, generative AI is raging through systems as diverse as healthcare, finance, advertising, law, and academe, making it imperative to further shore up our claim. We do so by situating role-reversibility within …

Countering Capture: A Political Theory Of Corporate Criminal Liability, Jennifer H. Arlen

Faculty Articles

In order to effectively deter organizational misconduct, countries must hold companies liable for their organizational misconduct. Some scholars argue, however, that countries should not impose criminal liability on companies and instead should rely entirely on civil liability, which can impose the same sanctions on companies as criminal liability. This claim that corporate civil enforcement is as effective as criminal enforcement is incorrect because it overlooks how the choice between the two affects companies’ ability to use their political influence to undermine corporate enforcement intensity. This Article shows that eliminating federal corporate criminal liability would undermine deterrence because large corporations would …

Regulatory Arbitrage And The Persistence Of Financial Misconduct, Colleen Honigsberg, Edwin Hu, Robert J. Jackson Jr.

Faculty Articles

Financial-advisor misconduct often has devastating consequences, leading lawmakers to seek tightened investor protections at the federal level. But many advisors can choose whether to be regulated under the federal regime or instead be overseen by state insurance regulators, giving advisors with a history of misconduct reason to select the laxer state-level regulatory environment. Despite extensive debate over the regulation of financial advice, no prior work has examined those incentives. Using a novel dataset, this Article identifies thousands of financial advisors who have committed serious misconduct and exited the federal regulatory regime—yet continue to advise investors, often using state insurance licenses. …

Unintentional Irony In Landmark Decisions Of The Delaware Supreme Court Regarding Corporate Law, Steven Cleveland

Faculty Articles

No abstract provided.

Expanding The Ponzi Scheme Presumption, David R. Hague

Faculty Articles

Ponzi schemes and other investment frauds inevitably end up in bankruptcy or receivership, leaving behind numerous victims—many of whom invested their life savings in the scheme without any knowledge of its fraudulent nature. Although trustees and receivers can sometimes recover some of the fraudulently acquired funds from the assets of the perpetrators, in most cases, those assets fall woefully short of the victims’ losses. This leads to fraudulent transfer lawsuits (claw-back actions) against those who are suspected to have profited from the wrongdoing.

A transfer is fraudulent if it was made with the actual intent to defraud, but actual fraud …

The New Policing Of Business Crime, Rachel E. Barkow

Faculty Articles

The central goal of this Article is to describe the burgeoning turn to new policing techniques in the business crime context and to offer some initial thoughts on the promises and limits of the approach. Part II begins by explaining the traditional or “old policing” of business crime. After implementing an initial strategy that focused on pursuing individuals, the government turned its attention to the organizations where those individuals operated. It increased the sanctions for violators and sought to target companies in an effort to prompt them to adopt internal compliance pro-grams. The focus on company compliance programs was designed …

The (Un)Enforcement Of Corporate Officers' Duties, Megan Wischmeier Shaner

Faculty Articles

No abstract provided.

Texas Annual Survey: Securities Regulation, George Lee Flint Jr

Faculty Articles

The Fifth Circuit’s determination of a passive investor’s equity interest in a limited liability company as “securities” brings this class of investors under the protection of the Texas Securities Act (“TSA”). The TSA recognizes vicarious liability theories of aiding and abetting liability and control person liability, which hold secondary parties accountable for their actions. During the Survey period, several cases found secondary parties with positions of control or who met the elements of common law fraud culpable. In Fernea v. Merrill Lynch Pierce Fenner & Smith, Inc., the court found that a business could be liable for an employee’s actions …

Credit-Monitoring Damages In Cybersecurity Tort Litigation, Vincent R. Johnson

Faculty Articles

When someone improperly accesses or discloses an individual’s personal information, the subject of that data breach is often at an increased risk of identity theft. One way for an affected data subject to guard against this risk is to subscribe to a credit-monitoring service. Recently, potential cybersecurity defendants have provided credit-monitoring services to affected data subjects voluntarily, and courts have approved credit-monitoring compensation as part of class-action settlements. These developments demonstrate that credit-monitoring expenditures are both reasonable and necessary when a serious breach of data security occurs. Furthermore, the economic loss rule should not bar recovery of credit-monitoring damages because …

Global Finance, Multinationals And Human Rights: With Commentary On Backer’S Critique Of The 2008 Report By John Ruggie, Faith Stevelman

Faculty Articles

This article references the excellent article of Larry Cata Backer, as it provides an analysis of the 2008 Report's "Protect, Respect, Remedy" (PRR) framework. Ruggie's most recent efforts, reflected in the 2010 Report, are directed at operationalizing the PRR framework set forth in the 2008 Report. Both these reports have been vetted internationally amongst governments, lawyers, academics and human rights advocates. How will governments, corporations, trade associations and rights advocates conceptualize and construct the fora and modes of recourse available to persons aggrieving human rights abuses? That question is the central focus of the 2010 Report and, as such, lies …

Regulating After The Fact, Samuel Issacharoff

Faculty Articles

In this Article, I want to make three brief points about the centrality of ex post regulation at the deepest levels of the American conception of the rule of law. First, I want to contrast two regulatory models employed in this country, regulation under the Food and Drug Administration (FDA) and under the Securities and Exchange Commission (SEC), to highlight the difference between ex post and ex ante regulation. Second, I will look more closely at the SEC model to show just how critical private enforcement is to ex post regulation. Finally, I will conclude with a concern about the …

Catastrophic Financial Failures: Enron And More, Geoffrey P. Miller

Faculty Articles

One can only try to understand how the catastrophes happened in the hope of avoiding them in the future. This Article looks across these six cases-WorldCom, Enron, Lincoln Savings, HIH, EIEI, and BCCI-and attempts to identify common threads that might help prevent similar disasters in the future. Each of these six events was a complex phenomenon with its own etiology, development, and resolution. Discussing any one of them in detail, much less comparing all six, is beyond the scope of this Article, which hopes only to touch upon some of the apparent common features that, upon further inquiry, might yield …

Enemy At The Gate: Threats To Information Security, Michael E. Whitman

Faculty Articles

A firm can build more effective security strategies by identifying and ranking the severity of potential threats to its IS efforts.

Audit Committee Effectiveness: A Synthesis Of The Empirical Audit Committee Literature, F. Todd Dezoort, Dana R. Hermanson, Deborah S. Archambeault, Scott A. Reed

Faculty Articles

The article describes the factors that contribute to audit committee effectiveness. An effective audit committee has qualified members with the authority and resources to protect stakeholder interests by ensuring reliable financial reporting, internal controls, and risk management through its diligent oversight efforts. The determinants of audit committee effectiveness includes the audit committee composition, authority, resources and diligence. The major U.S. stock exchanges require that audit committees be composed of at least three independent, financially literate directors. Team issues also are relevant when considering audit committee composition. The audit committee derives its authority from the full board of directors, federal law …

The Sec, The Audit Committee Rules, And The Marketplaces: Corporate Governance And The Future, Helen S. Scott

Faculty Articles

The “Audit Committee Rules” (the Audit Rules) comprise an integrated set of regulations issued by the Securities Exchange Commission (the SEC), the marketplaces, and the accounting profession. The genesis of the Audit Rules was a determination by the SEC that the quality of the financial data reported by companies with publicly traded securities was susceptible to distortion (intentional or otherwise) in response to the pressures of the new, increasingly volatile and demanding marketplace. The SEC further determined that altering the information flow and relationships within a company and between the company and its outside auditors could minimize this potential for …

Preventing Fraudulent Financial Reporting, Mark S. Beasley, Joseph V. Carcello, Dana R. Hermanson

Faculty Articles

Provides information on a study conducted by the Committee of Sponsoring Organizations regarding the detection and prevention of financial fraud. Discussion on the nature of financial frauds; Characteristics of unreliable financial reporting; Views on the role of auditing firms in the prevention of fraud.

Just Say 'No', Mark S. Beasley, Joseph V. Carcello, Dana R. Hermanson

Faculty Articles

The article discusses the prevention of financial fraud within corporations and businesses in the United States. The types of individuals named in the U.S. Securities and Exchange Commission (SEC) files are examined. Different fraud techniques are looked at, including sham sales, the recording of conditional sales, and unauthorized shipments. The author discusses the status of firms after fraud disclosure and the implications it has for finance professionals.

Consumer Protection For Latinos: Overcoming Language Fraud And English Only In The Marketplace, Steven W. Bender

Faculty Articles

Non-English-speaking consumers deserve the same protection as other consumers, and thus, this article advocates guarantees for their ability to strike informed bargains. To safeguard consumers most vulnerable to unfair and deceptive trade practices, this article contemplates a comprehensive strategy of reform that involves the legislatures, administrative agencies, and courts, as well as nonprofit organizations that advocate for language minorities and merchants themselves. Part I examines the growth in numbers of monolingual Latino/a consumers and documents their experience in the American marketplace. Part I also explores the shortcomings of existing remedies under the common law and consumer protection regulation when applied …

Solving The Drug Enforcement Dilemma: Lessons From Economics, Stephen J. Schulhofer

Faculty Articles

Skeptics wonder whether drug prohibition is worth its costs. But legalization is a complex and risky proposition, with political acceptability verging on zero. Thus, we redouble our commitment to vigorous enforcement of drug laws. Each year, the President's Office of National Drug Control Policy calls for another round of increases in expenditure for investigation, prosecution, and imprisonment of drug dealers. Yet success on this front is elusive and partly self-defeating. The billions we invest seldom bring tangible results, and dramatic drug seizures, when they occur, are rapidly offset by new shipments and alternate sources of supply. Worst of all, the …

Oregon Consumer Protection: Outfitting Private Attorneys General For The Lean Years Ahead, Steven W. Bender

Faculty Articles

This article examines Oregon's UTPA with an eye toward legislative and judicial reforms that will strengthen its private cause of action and thereby facilitate private enforcement. First, the scope of the UTPA is examined. Next, private remedies authorized by the UTPA are critiqued. Finally, the role of the DOJ is reformulated in response to declining public resources and increased reliance on private enforcement.