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Full-Text Articles in Law

Racism As A Threat To Financial Stability, Cary Martin Shelby Nov 2023

Racism As A Threat To Financial Stability, Cary Martin Shelby

Northwestern University Law Review

This Article draws from several theoretical frameworks such as critical race theory, law and economics, and rule of law conceptions to argue that the Financial Stability Oversight Council (FSOC) should formally recognize racism as a threat to financial stability due to its interconnectedness with recent and projected systemic disruptions. This Article begins by first introducing a novel model created by the author through which to dissect this claim. This “Systemic Disruption Model” provides a theoretical depiction of how racism drives every phase along the life-cycle continuum of a systemic disruption.

First, with respect to the Model’s “Introduction” phase, this Article …


Financial Inclusion, Cryptocurrency, And Afrofuturism, Lynnise Phillips Pantin Nov 2023

Financial Inclusion, Cryptocurrency, And Afrofuturism, Lynnise Phillips Pantin

Northwestern University Law Review

As a community, Black people consistently face barriers to full participation in traditional financial markets. The decentralized nature of the cryptocurrency market is attractive to a community that has been historically and systematically excluded from the traditional financial markets by both private and public actors. As new entrants to any type of financial market, Black people have increasingly embraced blockchain technology and cryptocurrency as a path towards the wealth-building opportunities and financial freedom they have been denied in traditional markets. This Article analyzes whether the technology’s decentralized system will lead to financial inclusion or increased financial exclusion. Without reconciling the …


Auditing Overseas: How The United States Can Learn From Recent Financial Audit Reform In The United Kingdom, Daniel Damitio Aug 2023

Auditing Overseas: How The United States Can Learn From Recent Financial Audit Reform In The United Kingdom, Daniel Damitio

Northwestern University Law Review

Financial auditing is one of the cornerstones of an effective capital market structure. When performed correctly, an independent financial audit provides investors with the security they need to effectively transact based on company disclosures. When this system fails, however, the results for investors and the economy as a whole can be devastating. In recognition of this danger, the market for financial auditing in the United States is regulated by a number of governmental and nongovernmental bodies charged with maintaining its health and effectiveness. But stakeholders within the U.S. market and government have criticized these regulators for failing to adequately respond …


The Missing U.S. Vat: Economic Inequality, American Fiscal Exceptionalism, And The Historical U.S. Resistance To National Consumption Taxes, Ajay K. Mehrotra Aug 2022

The Missing U.S. Vat: Economic Inequality, American Fiscal Exceptionalism, And The Historical U.S. Resistance To National Consumption Taxes, Ajay K. Mehrotra

Northwestern University Law Review

Since the 1970s, economic inequality has soared dramatically across the globe and particularly in the United States. In that time, one of the obstacles of using fiscal policy to address inequality has been the growing myth of the “overtaxed American”—the misguided notion that U.S. taxpayers pay more in taxes than residents of other advanced, industrialized countries. This myth has persisted, in part, because of the peculiar and distinctive nature of the fractured American fiscal and social welfare state. Even a cursory review of comparative tax data shows that the United States, by most measures, is a low-tax country compared to …


The Rise Of "Fringetech": Regulatory Risks In Earned-Wage Access, Nakita Q. Cuttino Apr 2021

The Rise Of "Fringetech": Regulatory Risks In Earned-Wage Access, Nakita Q. Cuttino

Northwestern University Law Review

By many accounts, the financial technology, or FinTech, sector appears to have developed an innovative solution to assist low-income workers with income shortfalls between standard paydays by displacing fringe financial service providers, namely payday lenders. Earned wage access programs facilitate early transfers of earned-but-unpaid wages to low- income workers through mobile platforms, algorithmic technology, and GPS tracking. To many, earned wage access programs represent a win-win for employees and employers. These programs are believed to be cheaper and safer alternatives to payday loans. Preliminary research also suggests these programs improve labor-retention rates for employers and help reduce financial distress for …


Too Many To Fail: Against Community Bank Deregulation, Jeremy C. Kress, Matthew C. Turk Nov 2020

Too Many To Fail: Against Community Bank Deregulation, Jeremy C. Kress, Matthew C. Turk

Northwestern University Law Review

Since the 2008 financial crisis, policymakers and scholars have fixated on the problem of “too-big-to-fail” banks. This fixation, however, overlooks the historically dominant pattern in banking crises: the contemporaneous failure of many small institutions. We call this blind spot the “too-many-to-fail” problem and document how its neglect has skewed the past decade of financial regulation. In particular, we argue that, for so- called community banks, there has been a pronounced and unjustifiable shift toward deregulation, culminating in sweeping regulatory rollbacks in the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018.

As this Article demonstrates, this deregulatory trend rests …


Delaware's New Competition, William J. Moon Apr 2020

Delaware's New Competition, William J. Moon

Northwestern University Law Review

According to the standard account in American corporate law, states compete to supply corporate law to American corporations, with Delaware dominating the market. This “competition” metaphor in turn informs some of the most important policy debates in American corporate law.

This Article complicates the standard account, introducing foreign nations as emerging lawmakers that compete with American states in the increasingly globalized market for corporate law. In recent decades, entrepreneurial foreign nations in offshore islands have used permissive corporate governance rules and specialized business courts to attract publicly traded American corporations. Aided in part by a select group of private sector …


Horizontal Directors, Yaron Nili Mar 2020

Horizontal Directors, Yaron Nili

Northwestern University Law Review

Directors wield increasing influence in corporate America, making pivotal decisions regarding corporate affairs and management. A robust literature recognizes directors’ important role and examines their incentives and performance. In particular, scholars have worried that “busy directors”—those who serve on multiple corporate boards—may face time constraints that affect their performance. Little attention, however, has been paid to directors who sit on the boards of multiple companies within the same industry. This Article terms them “horizontal directors” and spotlights, for the first time, the legal and policy issues they raise. The “horizontal” feature of directorships, a term often used in the antitrust …


Accredited Investors: A Need For Increased Protection In Private Offerings, Christopher R. Zimmerman Oct 2019

Accredited Investors: A Need For Increased Protection In Private Offerings, Christopher R. Zimmerman

Northwestern University Law Review

On June 19, 2019, the SEC released a report examining, in part, the adequacy of the accredited investor definition contained within Regulation D of the Securities Act of 1933 and soliciting public comment on potential changes to that definition. This Note argues that the current accredited investor definition, which determines who may invest in a private offering, does not adequately protect retail investors. Implemented in 1982 with fixed wealth requirements to qualify, the accredited investor definition has never been significantly revised, despite four decades of inflation that dramatically increased the percentage of households who meet the qualifications of an “accredited …


Swamp Money: The Opportunity And Uncertainty Of Investing In Wetland Mitigation Banking, Elan L. Spanjer Oct 2018

Swamp Money: The Opportunity And Uncertainty Of Investing In Wetland Mitigation Banking, Elan L. Spanjer

Northwestern University Law Review

In recent years, the wetland mitigation banking program has emerged as a favored mechanism for protecting the nation’s aquatic resources while allowing for economically beneficial development projects to proceed. Mitigation banks generate wetland credits, which in turn can be sold at a profit to developers who need them to offset wetland impacts. The number of mitigation banks has grown significantly in recent years, and the market has seen an influx of institutional investment. However, investors face significant risks and uncertainty, and many prospective investors lack access to information about wetland credit prices—which are neither reported to the regulatory authorities nor …


Finding The Pearl In The Oyster: Supercharging Ipos Through Tax Receivable Agreements, Christopher B. Grady Feb 2017

Finding The Pearl In The Oyster: Supercharging Ipos Through Tax Receivable Agreements, Christopher B. Grady

Northwestern University Law Review

A new, “supercharged” form of IPO has slowly developed over the last twenty years. This new form of IPO takes advantage of several seemingly unrelated provisions of the tax code to multiply pre-IPO owners’ proceeds from a public offering without reducing the amount public investors are willing to pay for the stock. Supercharged IPOs use a tax receivable agreement to transfer tax assets created by the IPO back to the pre-IPO ownership, “monetizing” the tax assets. As these structures have become more efficient, commentators have expressed concerns that these agreements deceive shareholders who either ignore or do not understand the …