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Full-Text Articles in Law
Nasd Regulation Of Ipo Conflicts Of Interest - Does Gatekeeping Work?, Royce De R. Barondes
Nasd Regulation Of Ipo Conflicts Of Interest - Does Gatekeeping Work?, Royce De R. Barondes
Faculty Publications
This Article contributes to the debate on the efficacy of third party gatekeeping in regulating the capital markets, by presenting empirical evidence of the efficacy of one kind of gatekeeper, a qualified independent underwriter (QIU). Under NASD rules, when an investment bank participating in a securities offering has one of several enumerated conflicts of interest, the securities cannot be sold at a price higher than that recommended by a QIU. Examining 1,188 IPOs from 1997 through 2000 discloses a negative, statistically significant relationship between IPO initial returns and each of (i) the fact that participating NASD members (or their affiliates) …
Correcting The Empirical Foundations Of Ipo-Pricing Regulation, Royce De R. Barondes
Correcting The Empirical Foundations Of Ipo-Pricing Regulation, Royce De R. Barondes
Faculty Publications
Recent events are replete with stories of fraudulent or opportunistic behavior in the initial public offering (IPO) process - behavior that extended to the highest-reputation investment banks. Curiously, notwithstanding this evidence, recent financial economics literature asserts investment bank conflicts of interest certify IPO issuers. This Article develops new empirical evidence that casts doubt on this certification hypothesis by examining the pre-IPO price adjustment of IPOs involving qualified independent underwriters (QIUs), particularly IPOs in which more than ten percent of the net proceeds are being directed to participating investment banks (e.g., to repay a prior extension of credit). These offerings have …
Rule 10b-5 And The "Unfitness" Question, Jayne W. Barnard
Rule 10b-5 And The "Unfitness" Question, Jayne W. Barnard
Faculty Publications
No abstract provided.
Did The Private Securities Litigation Reform Act Work?, Michael A. Perino
Did The Private Securities Litigation Reform Act Work?, Michael A. Perino
Faculty Publications
In 1995 Congress passed the Private Securities Litigation Reform Act (the PSLRA or the Act) to address abuses in securities fraud class actions. In the wake of Enron, WorldCom, Adelphia, and other high profile securities frauds, critics suggest that the law made it too easy to escape liability for securities fraud and thus created a climate in which frauds are more likely to occur. Others claim that the Act has largely failed because it did little to deter plaintiffs' lawyers from filing nonmeritorious cases. This article employs a database of the 1449 class actions filed from 1996 through 2001 to …