Law Commons^™

Risk-Seeking Governance, Brian J. Broughman -- Professor Of Law, Matthew T. Wansley -- Assoc. Professor Of Law

Vanderbilt Law Review

Venture capitalists (“VCs”) are increasingly abandoning their traditional role as monitors of their portfolio companies. They are giving startup founders more equity and control and promising not to replace them with outside executives. At the same time, startups are taking unprecedented risks—defying regulators, scaling in unsustainable ways, and racking up billion-dollar losses. These trends raise doubts about the dominant model of VC behavior, which claims that VCs actively monitor startups to reduce the risk of moral hazard and adverse selection. We propose a new theory in which VCs use their role in corporate governance to persuade risk-averse founders to pursue …

To Spac Or Not To Spac: Liberalizing The Regulation Of Capital Markets, Allison N. Swecker

Vanderbilt Journal of Transnational Law

The merger and acquisition world has experienced an uptick in deal flow since 2016, reaching unprecedented levels in 2020 due to enhanced private equity funding and market volatility. While the market volatility spurred by COVID-19 halted traditional initial public offerings (IPOs), the special purpose acquisition company (SPAC) market exploded. The flurry of SPAC activity in the United States triggered the development of SPAC markets worldwide. Unfortunately, SPACs’ great rise to fame in the past few years has come at a cost-—fraud. As such, the US Securities and Exchange Commission (SEC) is left grappling with how to best regulate the market …

How Free Should A Freeport Be?: Reducing Money Laundering In The Art Market Through Freeport Regulation, Cates Grier Saleeby

Vanderbilt Journal of Entertainment & Technology Law

The tax incentives that luxury freeports provide have created opportunities for money laundering and other forms of financial crime through the sale of art. The use of such institutions in combination with the anonymity that art transactions allow can create a series of transactions that are difficult to track, making the market ripe for corrupt behavior. Legislation like the Anti-Money Laundering Act, the Bank Secrecy Act, and the Money Laundering Control Act have helped reduce financial crime, but an approach more narrowly tailored to the art market and the freeports that enable its high value sales would further the goals …

The Divergent Designs Of Mandatory Takeovers In Asia, Umakanth Varottil, Wai Y. Wan

Vanderbilt Journal of Transnational Law

Optimal takeover regulation aims to promote efficient changes of corporate control while curbing inefficient takeovers. Viewed from a comparative perspective, the Anglo-American prototypes of takeover regulation spearhead not only the discourse but also the dissemination of takeover regulation globally. At one end of the spectrum, the law in the United States follows the "market rule," whereby transfers of corporate control benefit from a regulatory free hand. At the other end of the spectrum lies the "mandatory bid rule" (MBR), epitomized by takeover regulation in the United Kingdom. Under the United Kingdom's version of the MBR, an acquirer who acquires de …

Deterring Algorithmic Manipulation, Gina-Gail S. Fletcher

Vanderbilt Law Review

Does the existing anti-manipulation framework effectively deter algorithmic manipulation? With the dual increase of algorithmic trading and the occurrence of “mini-flash crashes” in the market linked to manipulation, this question has become more pressing in recent years. In the past thirty years, the financial markets have undergone a sea change as technological advancements and innovations have fundamentally altered the structure and operation of the markets. Key to this change is the introduction and dominance of trading algorithms. Whereas initial algorithmic trading relied on preset electronic instructions to execute trading strategies, new technology is introducing artificially intelligent (“AI”) trading algorithms that …

To Win Friends And Influence People: Regulation And Enforcement Of Influencer Marketing After Ten Years Of The Endorsement Guides, Craig C. Carpenter, Mark Bonin Ii

Vanderbilt Journal of Entertainment & Technology Law

For the last ten years, social media influencer marketing has been regulated by the Federal Trade Commission (FTC) under the FTC’s Section 5 “unfair practices” authority, guided by the Endorsement Guides, a “best practices” document published by the FTC. This is a fairly “light” regulatory scheme where violators typically enter no-money, no-fault consent decrees and generally undertake to do a better job following the Endorsement Guides in the future. During this time, the practice has flourished, and companies are spending significant portions of their marketing budgets on social media influencer advertising. Recently, the FTC has submitted proposals for increased enforcement …

Emerging Market Economies And International Investment Law: Turkey-Africa Bilateral Investment Treaties, Uche E. Ofodile

Vanderbilt Journal of Transnational Law

This Article offers a critical and penetrating insight into the bilateral investment treaties (BITs) between Turkey and countries in Africa. Since 2003, Turkey has concluded BITs with twenty-eight countries in Africa. This Article seeks answers to some very important questions. In the BITs between Turkey and countries in Africa, is Turkey merely conforming to the norms and standards established by Western countries, or is Turkey changing these norms in fundamental ways? Compared to BITs between Western nations and countries in Africa, are Turkey-Africa BITs more oriented towards sustainable development and, if so, in what respects? In what ways are emerging …

Patents And Mobile Devices In India: An Empirical Survey, Jorge L. Contreras, Rohini Lakshane

Vanderbilt Journal of Transnational Law

Though India has the second-largest wireless subscriber base in the world, with more than 150 domestic mobile device vendors, it has, until recently, remained relatively unaffected by the global smartphone wars. Over the past few years, however, a growing number of patent enforcement actions have been brought by multinational firms against domestic Indian producers. These actions, which have largely resulted in judgments favoring foreign patent holders, have given rise to a variety of proposals for addressing this situation. In order to assess the potential impact of patents on the mobile device market in India, and to assist policy makers in …

The Need For Speed: Regulatory Approaches To High Frequency Trading In The United States And The European Union, Megan Woodward

Vanderbilt Journal of Transnational Law

High frequency trading (HFT) is a financial investment execution technique with a growing presence in world financial markets. Investment firms engaging in HFT use computer-automated algorithms to trade financial instruments at high speeds. There is much debate as to what HFT entails, particularly its risks, benefits, and costs, and whom HFT affects (positively or negatively). In particular, this Note addresses efforts in the United States and the European Union to define and regulate HFT. The proposed Regulation Systems Compliance and Integrity (Reg SCI) and Regulation Automated Trading (Reg AT) in the United States and Markets in Financial Instruments Directive II …

Innovation Rewards: Towards Solving The Twin Market Failures Of Public Goods, Gregory N. Mandel

Vanderbilt Journal of Entertainment & Technology Law

The challenge of achieving socially optimal incentives for innovation in public goods faces twin market failures: a market failure to adequately promote public goods invention and a market failure to implement innovative public goods once developed. Though innovation in private goods sometimes faces the former hurdle, often ameliorated by intellectual property law, the interaction of both market failures for public goods innovation raises unique difficulties.

Environmentally beneficial technology presents an illustration of the innovation problem for public goods. Private actors lack sufficient incentives both to engage in environmentally beneficial innovation and to implement such innovation. While traditional intellectual property law …

How Algorithmic Trading Undermines Efficiency In Capital Markets, Yesha Yadav

Vanderbilt Law Review

This Article argues that the rise of algorithmic trading undermines efficient capital allocation in securities markets. It is a bedrock assumption in theory that securities prices reveal how effectively public companies utilize capital. This conventional wisdom rests on the straightforward premise that prices reflect available information about a security and that investors look to prices to decide where to invest and whether their capital is being productively used. Unsurprisingly, regulation relies pervasively on prices as a proxy for the allocative efficiency of investor capital. Algorithmic trading weakens the ability of prices to function as a window into allocative efficiency.

This …

Explaining The Art Market's Thefts, Frauds, And Forgeries (And Why The Art Market Does Not Seem To Care), Gregory Day

Vanderbilt Journal of Entertainment & Technology Law

Based upon a series of interviews with art market experts, this Article identifies and answers a significant, yet previously unexplored economics puzzle affecting the art market. Economics suggests that markets typically produce efficiency and social wealth, but when they fail, most actors should prefer remedial measures over an inefficient status quo. The art market currently is, and has been, plagued with frauds, thefts, forgeries, and market failure--a state of affairs that the governing legal framework has made worse. Despite this, the art market seems to adamantly, and puzzlingly, defend its business culture, rejecting attempts to remedy inefficiencies. In other words, …

The Fraud-On-The-Market Tort, John C.P. Goldberg, Benjamin C. Zipursky

Vanderbilt Law Review

It is commonplace to observe that there are differences between private 10b-5 actions and common-law actions for deceit, notwithstanding that both travel under the name of "fraud."' It is equally commonplace to suppose that these differences primarily reflect the need to adapt law that was first developed in a world of face-to-face transactions to the modern reality of large-scale, impersonal markets. The poster children for the transition from common-law fraud to securities fraud are, first, the Supreme Court's adoption in Basic, Inc. v. Levinson of the fraud-on-the-market doctrine and, second, the related emergence of securities fraud class actions. Amidst this …

Market-Oriented Subnational Debt Regimes: Empowering The Developing World To Construct Infrastructure, S. Samuel Young

Vanderbilt Journal of Transnational Law

Globally, as national governments continue to decentralize fiscal and governmental responsibility, the sound facilitation of subnational debt markets will play a critical role in the construction of infrastructure. However, sparse scholarship exploring the optimal legal and financial frameworks for encouraging the construction of infrastructure at the subnational level has left a number of open questions. This Note primarily provides a basic overview of subnational debt trends and policies. It first reviews subnational debt regimes, comparing market-oriented regimes with regimes with varying levels of involvement by central governments. Though not always possible, the Note concludes that market-driven incentives generally produce the …

Infringers Or Innovators? Examining Copyright Liability For Cloud-Based Music Locker Services, Brandon J. Trout

Vanderbilt Journal of Entertainment & Technology Law

Music lockers--Internet sites where users may store a copy of their music for later playback--have revolutionized the way people listen to music, allowing them to take their music with them anywhere in the world. However, rights holders are concerned that these locker services potentially infringe music copyrights when they allow their users to upload and stream music and when they use a space-saving technology called "deduplication." This Note delineates the separate rights guaranteed under the Copyright Act as applicable to music lockers: the right to copy and the right of public performance. The analysis looks at several music locker services …

Intercepting Licensing Rights: Why College Athletes Need A Federal Right Of Publicity, Talor Bearman

Vanderbilt Journal of Entertainment & Technology Law

The right of publicity is the right of an individual to control the commercial use of her name, image, likeness, or other identifiable aspects of her persona. In the United States, the right of publicity is a state-law right, not federal, and recognition of the right varies significantly from state to state. The lack of uniformity among states poses significant problems for individuals who are recognizable throughout the United States. Specifically, student athletes, who would lose the ability to play college athletics if they were reimbursed for the use of their images, are among the individuals most at risk of …

Terroir Vs. Trademarks: The Debate Over Geographical Indications And Expansions To The Trips Agreement, Emily C. Creditt

Vanderbilt Journal of Entertainment & Technology Law

The ever expanding global marketplace and increasing sophistication of consumers has led to a heightened desire for high-quality wines, spirits and food products that derive their unique characteristics from the geographical region from which they originate. The particular geographic identity of a product, known as a "geographical indication" can increase the marketability and value of any number of consumer goods, from wines and spirits to rice and cheese. The desire to protect geographical indications from misappropriation and abuse eventually led to the adoption of the Agreement on Trade-Related Aspects for Intellectual Property Rights (TRIPS Agreement) during the establishment of the …

Internet Retailers And Intertype Competition: How The Supreme Court's Incomplete Analysis In Leegin V. Psks Leaves Lower Courts Improperly Equipped To Consider Modern Resale Price Maintenance Agreements, Daniel B. Nixa

Vanderbilt Journal of Entertainment & Technology Law

In Leegin Creative Leather Products, Inc. v. PSKS, Inc., the U.S. Supreme Court held that resale price maintenance (RPM) agreements are to be judged under the rule of reason. An RPM agreement is an agreement between a manufacturer and retailers stipulating that retailers will charge a certain price for the manufacturer's products. This Note argues that the Supreme Court should have instructed lower courts to consider intertype competition in addition to interbrand and intrabrand competition when evaluating RPM agreements under the rule of reason. Two reasons lead to this conclusion. First, the Internet has invigorated intertype competition and has made …

Advertising Obesity: Can The U.S. Follow The Lead Of The Uk In Limiting Television Marketing Of Unhealthy Foods To Children?, David Darwin

Vanderbilt Journal of Transnational Law

Childhood obesity has tripled in the U.S. since the 1970s, and television advertisement of unhealthy foods has been linked to the unhealthy eating habits of children. The United Kingdom, facing a similar problem, promulgated regulations in 2007 banning the advertisement of foods high in fat, sodium, and sugar during programming directed at children below age 16.

In the U.S., industry representatives, public policy advocates, and government officials are debating whether to rely on self-regulation efforts or to implement government-established guidelines. Industry representatives argue that government guidelines would do little to solve the childhood obesity problem and that the UK regulations …

Voodoo Economics: A Look Abroad For A Supply-Side Solution To America's Campaign-Finance Riddle, Matthew T. Sanderson

Vanderbilt Journal of Transnational Law

The title of this Note "voodoo economics" is, at its core, an analogy: U.S. campaign-finance regulation operates like a price ceiling in the political money marketplace. Political campaigns are financed through money-for-access transactions and campaign-finance regulation caps the level of exchange. Like any other price ceiling, regulation is both effective and flawed. It suppresses the "price" of political money but inherently falls victim to some market players' avoidance activities. This price-ceiling analogy, among other things, makes apparent that many proposals forwarded by pro-regulation and deregulation advocates cannot solve the United States' century-old campaign-finance riddle. Instead, attention should turn to shaping …

The International Effects Of The Adoption Of A Consumption Tax In The United States, Matthew Mcmahan

Vanderbilt Journal of Transnational Law

This Note concludes that through the adoption of a consumption tax the United States will benefit from both short-and long-term gains. This Note presents the advantages of consumption taxes and where relevant, discusses a specific consumption tax proposal--the Fairtax Plan. The Author responds to several critiques of consumption taxation, including whether consumption taxes are disproportionately placed on labor, the existence of efficiency gains, the international effects, increased black market activity, and cross-border tax arbitrage.

Bring It On: The High-Stakes Battle Over Whether The Courts, Congress Or The Fec Should Muzzle Independent "527" Television Advertising, Christopher G. Johnson

Vanderbilt Journal of Entertainment & Technology Law

This Note analyzes possible FEC actions, pending court decisions, and proposed legislation that could once again dramatically change the landscape of political advertising. Section I of this Note examines the BCRA and the Supreme Court's subsequent ruling in McConnell v. FEC that created the environment that caused 527's to flourish. Section II focuses on FEC enforcement of campaign finance laws and examines a pending court case considering whether the FEC acted arbitrarily by failing to require all 527's to register as political committees. Section III considers whether courts or law-makers should require 527's to register as political committees in light …

Trip-Ping Over Business Method Patents, Vincent Chiappetta

Vanderbilt Journal of Transnational Law

Professor Chiappetta argues that the current effort to expand substantive international patent law harmonization to include business method patenting is ill-conceived and unsupportable. Such patents cannot be justified on the economic incentive grounds supporting the Western regimes. They are not part of the existing TRIPS agreement, and under present circumstances they should not be added. Any future agreement, bi-lateral or multi-lateral (including an extension of TRIPS), must be based on a better calibrated form of protection (less than patent) and should occur only after the persistent normative differences and the distributional consequences of international substantive harmonization have been addressed.

A Whole Different Ball Game: Ticket Scalping Legislation And Behavioral Economics?, Jasmin Yang

Vanderbilt Journal of Entertainment & Technology Law

Baseball is the sport most closely intertwined with American culture.' In many ways, the scandals associated with baseball, such as antitrust, segregation, and labor disputes, parallel and reflect the nation's development. In helping to shape the nation's collective identity, baseball's history is a sentimental reminder of a time when people were less concerned with profit and more interested in democratic access. And despite its somewhat tarnished image, many people want to champion and maintain the purity of the game. In jarring contrast, ticket scalpers personify the intersection of America's love for baseball with its love of profit. They represent pure …

Pop Goes The Commercial: The Evolution Of The Relationship Between Popular Music And Television Commercials, Nora Miles

Vanderbilt Journal of Entertainment & Technology Law

Although the use of new pop songs in commercials is a recent development, the fact that music plays an important role in advertising is certainly not news. Music is and has always been an integral part in nearly all commercial advertising campaigns. Since the advent of radio and television the consumer public has been exposed to marketing through music. In order to understand the implications of the trends in music advertising, this note examines the more traditional schemes of music in advertising. To that end, there are several different routes an advertiser can choose when selecting music for a particular …

The Government Tunes In To Tune Out The Marketing Of Violent Entertainment To Kids, Shannon Mccoy

Vanderbilt Journal of Entertainment & Technology Law

This Note examines the recent investigation conducted by the Federal Trade Commission ("FTC" or "Commission") and its 2001 Follow-Up to that inquiry. The September 2000 Report ("Report") concluded that the entertainment industry intentionally and aggressively advertises both R and PG-13 movies to children under the age of 18. As a solution, the FTC recommended self-regulation by the entertainment industry. The 2001 Follow-Up to the Report ("Follow-Up") found that although the movie industry has made progress, a greater effort must be exerted to successfully eliminate the marketing of violent entertainment to children.' Both the Report and the Follow-Up demonstrate that self-regulation …

End Game: Ex Parte Seizure Process And The Battle Against Bootleggers, Lucas G. Paglia, Mark A. Rush

Vanderbilt Journal of Entertainment & Technology Law

This Article presents a broad overview of the exparte seizure process, what it is and how it can be deployed by trademark owners to shut down counterfeiters. It first discusses the general structure and mechanics of the TCA. It then proceeds to discuss some important areas of practical concern with respect to proceedings under the Act. The Article concludes by providing a hypothetical case study of the ex parte seizure process in action.

Changes In The Ticket Distribution Industry: Is This The Beginning Of The End For Ticketmaster?, Joycelyn Stevenson

Vanderbilt Journal of Entertainment & Technology Law

This Note aims to explore the legal underpinnings of consumer frustration with Ticketmaster and the rest of the ticket distribution industry as it moves into the electronic age. First, this Note introduces Ticketmaster and examines its use of exclusive dealing agreements with local venues. It then discusses the relevant federal antitrust statutes affecting the industry and the market in which distributors operate. It also analyzes the role exclusive dealing agreements play in stifling competition. Next, this Note discusses the challenges--both legal and economic--to the industry's most visible member. It then discusses Ticketmaster as a possible product of competition in light …

Educating Russia's Future Lawyers--Any Role For The United States?, Jane M. Picker, Sidney P. Picker, Jr.

Vanderbilt Journal of Transnational Law

In the wake of the devaluation of the Russian ruble in 1998 and the resulting flight of foreign investment, which was exacerbated by allegations of massive corruption and capital flight at the highest levels of government in 1999, the question of an appropriate role for the United States in helping Russia to establish an environment able to attract and retain foreign and domestic capital, to maintain a viable globally integrated market-based economic system, and to create a stable civil society, is under discussion.

The authors believe that a viable market economy will not flourish in Russia until a more stable …

Efficiencies And Merger Review In Canada, The European Community, And The United States, Mark A.A. Warner

Vanderbilt Journal of Transnational Law

This Article examines economic efficiencies analysis in the merger review processes of Canada, the European Community, and the United States. In recent years, legal counsel, academics, and policymakers have given greater attention to international harmonization and convergence of competition and antitrust law and policy. This trend has been spurred by the increasing acceptance of efficiency-based economics in competition policy generally and in merger policy particularly. The author, nevertheless, asks whether efficiency-based merger analysis also may create new jurisdictional conflicts among national merger enforcement authorities. For instance, a state concerned with its own domestic competitiveness might emphasize domestic efficiency gains in …