Law Commons^™

The Panuwat Snowball: Correlation Does Not Equal Materiality, Tanner Gattuso

Catholic University Law Review

Insider trading is a term of art referencing the fraudulent practice of trading securities in a company on the basis of material, nonpublic information about that same company in breach of some duty owed to another. The practice erodes the public’s trust in the integrity of our capital markets for a reason that is rather intuitive: it is inherently unfair to allow an individual to make a quick and certain profit by exploiting material, nonpublic information to which he privy due solely to his position in a company or some other relationship of trust and confidence. In this context, unrelenting …

Federal Data Privacy Regulation: Do Not Expect An American Gdpr, Matt Buckley

DePaul Business & Commercial Law Journal

No abstract provided.

Legal Representation And The Metaverse: The Ethics Of Practicing In Multiple Realities, Madeline Brom

DePaul Business & Commercial Law Journal

No abstract provided.

Welcome Address, Lauren Mckenzie

DePaul Business & Commercial Law Journal

No abstract provided.

Front Matter

DePaul Business & Commercial Law Journal

No abstract provided.

Cryptocurrency: Regulate Or Facilitate? How States' Approaches To Cryptocurrency Can Be Applied On A Federal Level, Kelly Mahoney

Journal of the National Association of Administrative Law Judiciary

Within the past two years, the cryptocurrency market exceeded a record $2 trillion. As of November 2021, there are seventy-five million Bitcoin (a type of cryptocurrency) users and counting. Many states have implemented regulations and policies in response to this massive growth of the crypto market. While some states like Wyoming and Texas welcome cryptocurrency other states, such as New York and Washington, are more apprehensive and seek to constrain cryptocurrency due to its volatility and novelty. In contrast, federal agencies are still debating on how to address cryptocurrency, and glimpses of federal regulation can be seen through the 2021 …

Regulating Best Interest: Sec Confronts The Brave New Markets, Rayaan Hossain

University of Miami Business Law Review

This Note comments on how recent developments in securities regulation deal with today’s securities industry challenges. As usual, the law advances much slower than technology. After decades of debate over heightened standards for broker-dealers giving investment advice, the Securities and Exchange Commission (“SEC”) introduced Regulation Best Interest (Reg BI). Our modern market demands that broker-dealers execute quick trades on behalf of their clients as well as provide broader investment advice. The popularity of online trading platforms (“OTPs”) only exacerbated the need for regulatory changes. The theme of this paper surmises how Reg BI responds to the rise of the retail …

Spacs, Forward-Looking Statements, And Rule 419: Is Sec Rulemaking Needed?, Nicholas Vota

St. John's Law Review

(Excerpt)

On October 8, 2020, FirstMark Horizon Acquisition Corp. (“FirstMark” or “Company”) closed an initial public offering (“IPO”) of 41,400,000 units. Each unit was priced at $10.00 and “consist[ed] of one share of Class A common stock of the Company . . . and one-third of one redeemable warrant of the Company.” Each whole warrant provided its holder with the right to purchase “one share of Class A [c]ommon [s]tock for $11.50 per share.” FirstMark generated $414,000,000 in connection with the IPO. These funds were then placed in a trust account and maintained by a trustee.

In a filing submitted …

Session 5: Banking, Capital Markets, And The Crypto Revolution - A Look Back And Projection Of The Future Of Fintech, Joseph R. Cutler, Lawrence Kaplan, Youssef Sneifer, Jill Williamson

SITIE Symposiums

In Session Five of the SITIE 2023 Symposium: Enabling Innovation in Law and Society, Joseph M. Vincent moderated as the four panelists, Joseph R. Cutler, Lawrence Kaplan, Youssef Sneifer, and Jill Williamson, discussed banking, capital markets, and the crypto revolution by looking back and projecting the future of the financial technology (FinTech) industry. The discussion commenced with a conversation on banking deposits, then moved into a discussion on cryptocurrency companies and the challenges they have faced in recent years in the banking industry. The panelists further discussed artificial intelligence (AI) technology’s impact on FinTech, open banking, and challenges facing cryptocurrency …

Session 4: Fireside Virtual Chat With Bruce Jackson, Associate General Counsel, Microsoft, Bruce Jackson

SITIE Symposiums

Rhymes all have in common? Besides musical talent, they have all been represented by Bruce Jackson, one of the founding partners of the entertainment law firm, Jackson, Brown, Powell, and St. George. Jackson, a Brooklynite and longtime Microsoft attorney, is a force in the legal industry. Jackson started at Microsoft in the year 2000 as Corporate Counsel for the digital media division. Jackson now serves as Associate General Counsel and Managing Director for Strategic Partnerships out of the Office of the President for Microsoft. Jackson recently published his first book, Never Far From Home: My Journey from Brooklyn to Hip …

Session 3: Diversity Enhancing Intellectual Property, Jordi Goodman, Nina Srejovic

SITIE Symposiums

The field of intellectual property suffers from a lack of diversity. Women are underrepresented as credited inventors in the United States. Additionally, multi-gender inventor groups are underrepresented compared to all-male and, sometimes, even all-female groups. This representation has changed over time, with changes not always reflecting an increase in female representation. This is particularly true when studying gender-disparity as it exists in the field of computer programming and software patents. While women were well represented in computer programming at field’s inception, this changed after World War II because men lobbied to push women out of the field. Women have since …

Session 2: Diversity As Key To Innovation - Stem Education, Richard Tapia

SITIE Symposiums

Richard A. Tapia is a professor at Rice University, where he has taught since 1970. Tapi specializes in optimization theory and numerical analysis. It has been his lifelong work to help underrepresented minorities achieve academic success and success in life.

In this talk, Tapia emphasizes the importance of diversity in STEM fields and highlights the failures of the education system in supporting underrepresented minorities. Tapia opines that more efforts need to be made to bring domestic underrepresented minorities into STEM positions and to recognize the value they bring. Tapia believes that, to address the lack of minority representation in STEM …

Session 1b: Innovation In Legal Contracts And Deals - How Lexion Is Incorporating Ai Into Document Revision, Lexion

SITIE Symposiums

Here, Gaurav Oberoi (CEO and Founder, Lexion) & Jessica Nguyen (Chief Legal Officer, Lexion) discuss Lexion and how it will change the legal industry. Lexion seeks to revolutionize how companies manage the contracts that they use. It has begun to corner a particular market in the rapidly growing field of Artificial Intelligence (AI), helping in-house attorneys to improve their workflow by automatically analyzing documents. By using AI, the program can successfully remove what the CEO of Lexion refers to as “low value” work. This allows overworked in-house attorneys to not only do more work in a faster time frame, but …

Session 1a: Innovation In The Delivery Of Legal Services And Access To Justice, Vikktoria

SITIE Symposiums

In session one, Walid Romaya and Tabrez Ebrahim, co-founders of Vikktoria, discuss their company and its contributions to improving access to justice. With a dual focus on achieving a broader access to justice and in providing matchmaking services for legal professionals looking for a larger client base, Vikktoria aims to disrupt the legal services industry through its mobile app. Based in California, Vikktoria has begun to expand to various metro areas around the country and hopes to provide broader access to justice by giving those with little to no legal knowledge an easy way to find a local attorney, book …

Introduction, Steven Bender

SITIE Symposiums

No abstract provided.

Sec V. Panuwat: The Federal Pursuit Of Shadow Trading, Kayla Kershen

Brooklyn Journal of Corporate, Financial & Commercial Law

In 2021, the SEC filed a complaint against a biopharmaceutical executive, Matthew Panuwat, for trading on material non-public information in violation of both the federal securities laws and his employer’s company policies. However, because the subject of the confidential information was not his employer, but a similarly situated peer company, Panuwat’s conduct constitutes “shadow trading.” The SEC’s enforcement, and the Northern District of California’s subsequent approval, indicate that company insiders may face liability for shadow trading. However, as written, the SEC arguably bases its attachment of federal liability on the company policies that Panuwat was bound by and violated. This …

Entire Fairness Or Bust: The Burst Of The 2020-2021 Spac Bubble, Nicole Lynch

Brooklyn Journal of Corporate, Financial & Commercial Law

Special Purpose Acquisition Companies (SPACs) have skyrocketed in recent years as an alternative for taking private companies public through an initial public offering (IPO). SPACs are blank-check companies that raise capital through public exchanges for the “special purpose” of acquiring a privately held company. Once acquired, the private company will take the SPAC’s place on the public exchange, effectively accomplishing the same thing as a traditional IPO but without all the onerous reporting requirements and upfront costs. For these reasons, SPACs have become the next big thing in securities markets despite being around since the 1990s. Throughout 2020 and 2021, …

The Business Of Securities Class Action Lawyering, Stephen J. Choi, Jessica Erickson, Adam C. Pritchard

Law & Economics Working Papers

Plaintiffs’ lawyers in the United States play a key role in combating corporate fraud. Shareholders who lose money as a result of fraud can file securities class actions to recover their losses, but most shareholders do not have enough money at stake to justify overseeing the cases filed on their behalf. As a result, plaintiffs’ lawyers control these cases, deciding which cases to file and how to litigate them. Recognizing the agency costs inherent in this model, the legal system relies on lead plaintiffs and judges to monitor these lawyers and protect the best interests of absent class members. Yet …

The Perfect Storm: A Look At The Robinhood Shutdown And The Shady Security Practices Of Payment For Order Flow, Gamification, And Clickwrap Agreements, Justin M. Taylor

University of Massachusetts Law Review

SEC guidelines and Federal Courts have stated, and recently upheld, that brokerdealers do not owe a fiduciary duty to retail investors if they do not provide them with investment advice, but this opens up retail investors to significant and costly mistreatment by financial institutions with no avenue for recourse. Using payment for order flow, gamification, and click-wrap agreements by broker-dealers creates a conflict of interest between themselves and the retail investors they act on behalf of. This article argues that retail investors should have an avenue of recourse against financial institutions when they breach their duty to these investors by …

Meme Corporate Governance, Dhruv Aggarwal, Albert H. Choi, Yoon-Ho Alex Lee

Law & Economics Working Papers

Can retail investors revolutionize corporate governance and make public companies more responsive to social concerns? The U.S. stock market offered an unusual experiment to test the impact of retail investors in 2021, when there was a dramatic influx of retail investors into the shareholder base of companies such as GameStop and AMC. The meme surge phenomenon elicited a variety of reactions from scholars and practitioners. While some worried that affected companies’ share prices were becoming disjointed from their financial fundamentals, others predicted that retail shareholders will reduce the power of large institutional investors and democratize corporate governance. This Article presents …

Spac Mergers, Ipos, And The Pslra's Safe Harbor: Unpacking Claims Of Regulatory Arbitrage, Amanda M. Rose

William & Mary Law Review

Communications in connection with an initial public offering (IPO) are excluded from the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 (PSLRA). Unsurprisingly, IPO issuers do not share projections publicly—the liability risk is too great. By contrast, communications in connection with a merger are not excluded from the safe harbor, and special purpose acquisition companies (SPACs) routinely share their merger targets’ projections publicly. Does the divergent application of the PSLRA’s safe harbor in traditional IPOs and SPAC mergers create an opportunity for “regulatory arbitrage” and, if so, what should be done about it? …

Cost Of Capitol: Analyzing Congressional Insider Trading Regulation, Hannah Levy

Finance Undergraduate Honors Theses

The United States Congress has involved itself with the financial regulation of big business for decades. The legislative body has passed a multitude of laws over time which foster greater transparency and trust between individual investors and big business. Until recently, legislators have avoided passing laws which regulate their own financial activity. Recent investigations revealing that dozens of federal lawmakers have violated financial disclosure laws and made stock trades on insider information has successfully angered the public and forced Congress to consider tighter restrictions. But can Americans trust their legislators to effectively regulate themselves? If no legislative action is taken, …

Transferred Emissions Are Still Emissions: Why Fossil Fuel Asset Sales Need Enhanced Transparency And Carbon Accounting, Jack Arnold, Martin Lockman, Perrine Toledano, Martin Dietrich Brauch, Shraman Sen, Michael Burger

Columbia Center on Sustainable Investment

In a widely reported trend, the “Oil Supermajors” — BP, Chevron, ConocoPhillips, Eni, ExxonMobil, Shell, and TotalEnergies — are selling off many upstream fossil fuel assets.

Selling these assets to entities that will continue producing and selling the fossil fuel resources does not necessarily reduce greenhouse gas emissions, but the supermajors have used these asset sales to support claims that they are making progress toward reaching net-zero greenhouse gas emissions.

Emissions reporting frameworks allow companies to conflate the apparent emissions reductions from asset sales with direct reductions from efficiency improvements and asset retirements. In doing so, they hinder the ability …

“Finfluencers In The Wild” A Call For Regulation Addressing The Growth Of Online Investment Advice, Mia Stefanou

Brooklyn Law Review

Illustrated in part by the abnormal market volatility that resulted from the popularity of meme stocks in early 2021, a new era of securities trading is taking place. With increasing frequency, investors look to social media discourse for investment advice. The current regulatory regime in the United States fails to address the increasing prominence of a new type of market participant—the “finfluencer.” This new breed of advisor is the social media influencer who provides investment advice to other users online. This note discusses the global conversations surrounding the emergence of this group, examines the US governance framework, specifically the Investment …

The Unreasonableness Of Reasonable: Rethinking The Reasonable Investor Standard, Alexandra Li

Northwestern University Law Review

This Note explores the “reasonable investor” standard in light of recent developments in pandemic-era securities litigation. Scholars have long criticized the reasonable investor standard for determining materiality. Given the dramatic backdrop of the COVID-19 pandemic, the limitations of the standard are becoming ever more evident. This Note provides a brief history of the development of the current standard and highlights some of its problems through two recent COVID-19 securities fraud cases. This Note argues that the reasonable investor standard is no longer sufficient to protect investors. Through examining tort law and First Amendment jurisprudence, this Note differentiates between the “reasonable” …

Post-Pandemic Finra Arbitration: To Zoom Or Not To Zoom?, Jill I. Gross

Elisabeth Haub School of Law Faculty Publications

This Article contributes to the literature exploring the impact of the pandemic on arbitration and explores whether parties arbitrating their disputes during the pandemic have had access to justice equivalent to the justice that was available pre-pandemic. Though it is difficult to draw any conclusions about FINRA arbitration due to the confidential and non-reasoned nature of awards, the Article focuses on arbitration of securities industry disputes at one forum, FINRA DRS. In particular, the Article analyzes data about FINRA customer arbitrations over the course of the pandemic, from onset in March 2020 through mid-2022, when most municipalities had lifted COVID-19 …

The Securities Law Disclosure Conundrum For Publicly Traded Litigation Finance Companies, Robert F. Weber

University of Michigan Journal of Law Reform

The Article examines a peculiar legal dilemma—implicating securities law, legal ethics, and evidence law—that arises when litigation finance companies (LFCs) become public companies. LFCs provide funding to litigants and law firms for prosecuting lawsuits in exchange for a share of the lawsuit recoveries. In recent years, LFCs have significantly altered the landscape of the civil justice system in common law jurisdictions. But their assets, which are just rights to proceeds from lawsuits, are notoriously opaque— who really can predict what a jury will do when it comes to liability and damages? When LFCs go public, this opacity frustrates public investors’ …

Securities And Exchange Commission Vs. Kim Kardashian, Cryptocurrencies And The "Major Questions Doctrine", Jerry W. Markham

William & Mary Business Law Review

The SEC has brought some highly publicized enforcement actions against Kim Kardashian and other celebrity social media influencers who received undisclosed payments for their endorsement of cryptocurrencies. This Article describes those cases and analyzes whether the SEC exceeds its authority under the Constitutional “major questions doctrine” recently applied by the Supreme Court in West Virginia v. EPA. That doctrine prohibits a federal agency from regulating activities that raise a major question that Congress, rather than the agency, must resolve. Such a question is one in which there is major political and economic interest and over which the agency has …

The Future Of China's U.S.-Listed Firms: Legal And Political Perspectives On Possible Decoupling, Rebecca Parry, Qingxiu Bu

William & Mary Business Law Review

There is a long history of Chinese firms raising capital on leading U.S. exchanges. These shares have proved attractive and are estimated at $1 trillion value, in spite of deep mismatches between Chinese internal approaches to corporate governance and those taken under U.S. securities regulations. Chinese listings of nonstate firms, particularly in the technology sector, had depended on a largely laissez-faire initial approach to the expansion through foreign listings, including tolerance of the opaque Variable Interest Entity (VIE) structures adopted as a means to bypass Chinese restrictions on foreign ownership. Concerns regarding data security had, however, prevented compliance by Chinese …