Law Commons^™

Systemic Harms And Shareholder Value, Jeffrey N. Gordon

Jeffrey N Gordon

The financial crisis has demonstrated serious flaws in the corporate governance of systemically important financial firms. In particular, the Shareholder Value norm, which has guided corporate governance reform for a generation, proves to be a faulty guide for managerial action in systemically important firms. This is not only because the failure of such firms will have spillovers that defy the cost-internalization of the tort system but also because these spillovers will harm their own majoritarian shareholders. The interests of diversified shareholders fundamentally diverge from the interests of managers and other controllers because the failure of a systemically important financial firm …

Book Review: The Three And A Half Minute Transaction: What Sticky Boilerplate Reveals About Contract Law And Practice, Andrea J. Boyack

Andrea J Boyack

This review situates Gulati & Scott’s findings with respect to sovereign debt instruments and the contracting process in the context of a legal profession on the brink of change. Gulati and Scott’s book addresses the inexplicable failure of lawyers to respond to a sovereign debt litigation outcome by clarifying a boilerplate provision after an adverse judicial interpretation. Their fascinating study of boilerplate in sophisticated transactional legal practice is timely and compelling both in terms of the specific story it tells, namely the persistence of the pari passu clause in sovereign debt instruments, as well as its broader implications: Structural flaws …

Korea’S Financial Regulatory Reforms Responding To The Global Financial Crisis Of 2008: Assessments And Future Prospects, Dong Won Ko

Dong Won Ko

Since the 2008 global financial crisis (GFC), we have seen many reforms, as each country has endeavored to reform its financial regulatory system, including banking and financial regulation. The reforms attempted to respond to the crisis in line with the new global regulatory framework initiated by G-20s and international financial organizations. The Korean Government has also proposed new legislation and financial reforms, in response to the GFC, including reinforcement of protection for financial consumers and strengthening the corporate governance in financial institutions. This article seeks to review the regulatory reform measures, and to analyze whether such measures follow those global …

Transaction Cost-Benefit Analysis, With Applications To Financial Regulation, D. Bruce Johnsen

D. Bruce Johnsen

As Coase convincingly showed, transaction costs inhibit the ability of market participants to achieve first-best outcomes. This paper proposes a novel and relatively simple alternative to traditional cost-benefit analysis when regulated parties face sufficiently low transaction costs that they can bargain directly or rely on competitive markets to set efficient terms of trade. In these settings, the only informational burdens financial market regulators need bear to assess corrective rules is to identify the relevant parties, the “good” they hope to exchange, and the transaction costs that inhibit them from maximizing joint gains from trade. A rule is justified only if …

The Stock Market Reaction To Class Action Filings Post Pslra, Mark S. Klock

Mark S Klock

Using a substantially larger sample than has been used before, and a sample that includes the Great Financial Crisis and its ensuing recession, I investigate the stock market reaction to securities class action filings following the enactment of the Private Securities Litigation Reform Act through the first quarter of 2012. I find that on average, even after adjusting for market downturns, there is a statistically significant negative abnormal return at the time of filing. There is also a statistically significant negative abnormal return during the weeks preceding the filing indicating that the market partially, but not fully, anticipates these filings. …

The Management Of Public Natural Resource Wealth, Paul Rose

Paul Rose

As improved but often more environmentally-obtrusive technologies such as hydraulic fracturing facilitate the extraction of billions of dollars in natural resource wealth, more states are now faced with a welcome but exceedingly complex set of problems: Who should benefit from natural resources extracted from public lands? If the state retains much of this wealth in the form of tax receipts, how should these funds be spent? What do states owe to the communities from which these resources were extracted? What do states owe to future generations? While these are questions of first impression for a few, fortunate states, a number …

---

Go to article

Rebalancing Public And Private In The Law Of Mortgage Transfer, John P. Hunt

John P Hunt

The law governing the United States’ $13 trillion mortgage market is broken. Courts and legislatures around the country continue to struggle with the fallout from the effort to build a 21st century global market in mortgages on a fragmented, arguably archaic legal foundation. These authorities’ struggles stem in large part from the lack of clarity about the legal requirements for mortgage transfer, the key process for contemporary mortgage finance.

We demonstrate two respects in which American mortgage transfer law is unclear and offer suggestions for fixing it. Revisions to the Uniform Commercial Code adopted around the turn of the century …

International Money Laundering: The Need For Icc Investigative And Adjudicative Jurisdiction, Michael R. Anderson

Michael Anderson

Money laundering is one of the most pressing issues in the realm of international financial crimes. One of the biggest issues involved in international money laundering is the problem of adjudication. There is no international organization that currently hears these sorts of claims, forcing nations to adjudicate these crimes on their own, often without adequate resources to effectively investigate and enforce their money laundering statutes.

This article argues that, in order to more effectively prevent and adjudicate international money laundering offenses, the International Criminal Court should adopt an international money laundering statute designating these activities as a crime within the …