Law Commons^™

Auditing The Pcaob: A Test To The Accountability Of The Uniquely Structured Regulator Of Accountants, Michael A. Thomason, Jr.

Vanderbilt Law Review

After a slew of highly publicized corporate accounting scandals during the early 2000s at prominent companies-including Enron, WorldCom, Adelphia, and Tyco-public confidence in the integrity of financial reporting by public companies was undoubtedly shaken. Several major financial reporting frauds demonstrated serious weaknesses with the then self-regulated accounting profession, including the failure of auditors to detect those companies that were "cooking their books." The collapse of several prominent companies not only affected top executives, who often were subjected to civil and criminal charges, but also produced harsh consequences for several other constituencies who relied on the integrity of the accounting firms …

Star Creation: The Incubation Of Mutual Funds, Alan R. Palmiter, Ahmed E. Taha

Vanderbilt Law Review

Mutual fund incubation is a process by which new funds are initially operated out of public view. The high-performing funds are then marketed to investors, and the low-performing funds are quietly terminated. This selection process is not revealed to investors, thus creating the illusion that the successful funds' returns were the result of skill rather than luck. Also, some fund companies subsidize their incubator funds in ways that do not continue after the funds are sold to the public. As a result, the high returns of successful incubator funds generally do not persist after the funds are marketed to investors. …

Beyond Economics: The U.S. Recognition Of International Financial Reporting Standards As An International Subdelegation Of The Sec's Rulemaking Authority, Jacob L. Barney

Vanderbilt Journal of Transnational Law

A final rule promulgated by the Securities and Exchange Commission (SEC) in 2008 allowing foreign private securities issuers to prepare SEC-required financial disclosures under international financial reporting standards (IFRS) as promulgated by the International Accounting Standards Board (LASB) is a highly significant event for U.S. and global capital markets. However, surprisingly few questions have been asked regarding the SEC's legal authority to take such an unprecedented step.

This Note assesses the recent SEC action with regard to IASB from two perspectives--traditional administrative law, with particular emphasis on delegations by government entities to private parties, and international law, with particular emphasis …

Do Differences In Pleading Standards Cause Forum Shopping In Securities Class Actions?: Doctrinal And Empirical Analyses, Randall Thomas, James D. Cox, Lynn Bai

Vanderbilt Law School Faculty Publications

Federal appellate courts have promulgated divergent legal standards for pleading fraud in securities fraud class actions after the Private Securities Litigation Reform Act (PSLRA). Recently, the U.S. Supreme Court issued a decision in Tellabs v. Makor Issues & Rights that could have resolved these differences, but did not do so. This article provides two significant contributions. We first show that Tellabs avoids deciding the hard issues that confront courts and litigants daily in the wake of the PSLRA's heightened pleading standard. As a consequence, the opinion keeps very much alive the circuits' disparate interpretations of the PSLRA's fraud pleading standard. …

Attorneys, Accountants, And Bankers, Oh My! Primary Liability For Secondary Actors In The Wake Of "Stoneridge", Robert J. Grubb

Vanderbilt Law Review

Mervin "Buddy" Schwartz, Jr., embodied the American Dream. A Pennsylvania resident, Schwartz began working for Hershey Foods in 1961 as a maintenance mechanic.' He eventually became a member of the local union's executive board. A hard worker providing for his family, Schwartz had a thirteen-year perfect attendance record and often worked overtime. He even managed to attend night classes and obtained an associate's degree in Bible studies.

Lacking any financial training, Buddy Schwartz relied on the retirement plan and 401k5 Hershey provided for his retirement. Because he contributed the maximum allowable amount out of each paycheck to his 401k, he …

Mapping The American Shareholder Litigation Experience, Randall Thomas, James D. Cox

Vanderbilt Law School Faculty Publications

In this paper, we provide an overview of the most significant empirical research that has been conducted in recent years on the public and private enforcement of the federal securities laws. The existing studies of the U.S. enforcement system provide a rich tapestry for assessing the value of enforcement, both private and public, as well as market penalties for fraudulent financial reporting practices. The relevance of the U.S. experience is made broader by the introduction through the PSLRA in late 1995 of new procedures for the conduct of private suits and the numerous efforts to evaluate the effects of those …