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Banking and Finance Law

Brooklyn Law School

2021

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Articles 1 - 8 of 8

Full-Text Articles in Law

Avoiding Wasteful Competition: Why Trading On Inside Information Should Be Illegal, Michael D. Guttentag Dec 2021

Avoiding Wasteful Competition: Why Trading On Inside Information Should Be Illegal, Michael D. Guttentag

Brooklyn Law Review

This article offers a new and compelling reason to make all trading based on inside information illegal. The value realized by trading on inside information is unusual in two respects. First, inside information is produced at little or no incremental cost and is nevertheless quite valuable. Second, profits made from trading on inside information come largely at the expense of others. When the value of something exceeds the cost to produce it, a wasteful race to be the first to capture the resulting surplus is likely to ensue. Similarly, resources expended solely to take something of value from others are …

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Karmel’S Dissent: The Sec’S Use And Occasional Misuse Of Section 21(A) Reports Of Investigation, James J. Park Dec 2021

Karmel’S Dissent: The Sec’S Use And Occasional Misuse Of Section 21(A) Reports Of Investigation, James J. Park

Brooklyn Journal of Corporate, Financial & Commercial Law

Section 21(a) of the Securities Exchange Act gives the SEC the option of publishing a report of its findings after conducting an investigation. Typically, the SEC issues such reports about once a year to highlight major compliance and enforcement issues. This Article examines the SEC’s use of Section 21(a) investigative reports with special attention to its 1979 report in Spartek, where Commissioner Roberta Karmel filed a famous dissent. In that opinion, she argued that the report effectively sanctioned conduct over which the SEC did not have jurisdiction and that Spartek did not have sufficient notice of its regulatory obligations. While …

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Personal Insolvency In China: Necessities, Difficulties, And Possibilities, Rebecca Parry, Haizheng Zhang, Jiahui Fu Dec 2021

Personal Insolvency In China: Necessities, Difficulties, And Possibilities, Rebecca Parry, Haizheng Zhang, Jiahui Fu

Brooklyn Journal of International Law

There has long been demand for personal insolvency laws in China, yet such laws have hitherto been unavailable, in part due to ideological resistance. In more recent years there has been an increase in borrowing by individuals, which has led to increased calls for honest but unfortunate debtors to be able to obtain a fresh start. Yet there is significant public mistrust of defaulting debtors and in particular there is a shadow cast by those termed the Lao Lai that has led many to question the desirability of such a reform. There has also been a need for change in …

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A Rejection Of Absolutist Duties As A Barrier To Creditor Protection: Facilitating Directorial Decisivness Surrounding Insolvency Through The Business Judgment Rule, Philip Gavin May 2021

A Rejection Of Absolutist Duties As A Barrier To Creditor Protection: Facilitating Directorial Decisivness Surrounding Insolvency Through The Business Judgment Rule, Philip Gavin

Brooklyn Journal of Corporate, Financial & Commercial Law

This Article draws attention to the difficulties that directors may face when seeking to discharge their duties as a corporation approaches insolvency, in particular when directors must discern the point at which a corporation has become insolvent. It argues that discretion allowed to directors by the business judgment rule will be crucial to overcoming these difficulties. To do this, this article examines the nature of duties owed by directors both before and after insolvency, and accepts the stance taken by Delaware courts in recent years towards an expansive understanding of a corporation’s interests upon insolvency. It then considers unresolved issues …

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Proxy Advisors As Issue Spotters, Douglas Sarro May 2021

Proxy Advisors As Issue Spotters, Douglas Sarro

Brooklyn Journal of Corporate, Financial & Commercial Law

When institutional investors hire proxy advisors to prepare reports on matters up for vote at public company shareholder meetings, are they interested primarily in acquiring a bottom-line recommendation on how to vote, on which they can then blindly rely? Or in acquiring information that will help them make their own voting decisions? Supporters of controversial reforms introduced by the Securities and Exchange Commission (SEC) in 2019 and 2020 gravitate toward the former position, arguing that reform is needed to discourage undue reliance on proxy advisor recommendations. Opponents gravitate toward the latter position, arguing that additional regulation generally is unnecessary given …

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Reducing Conflicts Of Interest: A "Glass-Steagall" Split Of Advisory And Consulting Services Of Proxy Advisory Firms, Austin Manna May 2021

Reducing Conflicts Of Interest: A "Glass-Steagall" Split Of Advisory And Consulting Services Of Proxy Advisory Firms, Austin Manna

Brooklyn Journal of Corporate, Financial & Commercial Law

This Note explores a solution to the potential problem with proxy advisory firms that involves an inherent conflict of interest arising from the structure of two services—advisory and consulting services—offered at certain proxy advisory firms in the United States. The solution proposed in this paper applies a Glass-Steagall framework to breakup these two services of the proxy advisory firms. In theory, this would eliminate the inherent conflicts of interest.

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Looking Forward: Professor Roberta Karmel's Prescient Views On The Transformation Of Self-Regulatory Organizations And Of The Securities Market Structure At The Turn Of The Last Century, James Fanto Jan 2021

Looking Forward: Professor Roberta Karmel's Prescient Views On The Transformation Of Self-Regulatory Organizations And Of The Securities Market Structure At The Turn Of The Last Century, James Fanto

Faculty Scholarship

No abstract provided.

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Symposium Introduction: A Tribute To Roberta Karmel, James Fanto Jan 2021

Symposium Introduction: A Tribute To Roberta Karmel, James Fanto

Faculty Scholarship

No abstract provided.

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