Law Commons^™

Janus Capital Group, Inc. V. First Derivative Traders: The Culmination Of The Supreme Court’S Evolution From Liberal To Reactionary In Rule 10b-5 Actions, Charles W. Murdock

Charles W. Murdock

“Political” decisions such as Citizens United and National Federation of Independent Business (“Obamacare”) reflect the reactionary bent of several Supreme Court justices. But this reactionary trend is discernible in other areas as well. With regard to Rule 10b-5, the Court has handed down a series of decisions that could be grouped into four trilogies. The article examines the trend over the past 40 years which has become increasingly conservative and finally reactionary.

The first trilogy was a liberal one, arguably overextending the scope of Rule 10b-5. This was followed by a conservative trilogy which put a brake on such extension, …

Janus Capital Group, Inc. V. First Derivative Traders: The Culmination Of The Supreme Court’S Evolution From Liberal To Reactionary In Rule 10b-5 Actions, Charles W. Murdock

Charles W. Murdock

“Political” decisions such as Citizens United and National Federation of Independent Business (“Obamacare”) reflect the reactionary bent of several Supreme Court justices. But this reactionary trend is discernible in other areas as well. With regard to Rule 10b-5, the Court has handed down a series of decisions that could be grouped into four trilogies. The article examines the trend over the past 40 years which has become increasingly conservative and finally reactionary.

The first trilogy was a liberal one, arguably overextending the scope of Rule 10b-5. This was followed by a conservative trilogy which put a brake on such extension, …

Janus Capital Group, Inc. V. First Derivative Traders: The Culmination Of The Supreme Court’S Reactionary Rule 10b-5 Jurisprudence Which Protects Fraud At The Expense Of Investors, Charles W. Murdock

Charles W. Murdock

Summary: Janus Capital Group, Inc. v. First Derivative Traders: The Culmination of the Supreme Court’s Reactionary Rule 10b-5 Jurisprudence Which Protects Fraud at the Expense of Investors

“Political” decisions such as Citizens United and National Federation of Independent Business (“Obamacare”) reflect the reactionary bent of several Supreme Court justices. But this reactionary trend is discernible in other areas as well. With regard to Rule 10b-5, the Court has handed down a series of decisions that could be grouped into four trilogies. The article examines the trend over the past 40 years which has become increasingly conservative and finally reactionary.

The …

Janus Capital Group, Inc. V. First Derivative Traders: The Culmination Of The Supreme Court’S Reactionary Rule 10b-5 Jurisprudence Which Protects Fraud At The Expense Of Investors, Charles W. Murdock

Charles W. Murdock

Summary: Janus Capital Group, Inc. v. First Derivative Traders: The Culmination of the Supreme Court’s Reactionary Rule 10b-5 Jurisprudence Which Protects Fraud at the Expense of Investors

“Political” decisions such as Citizens United and National Federation of Independent Business (“Obamacare”) reflect the reactionary bent of several Supreme Court justices. But this reactionary trend is discernible in other areas as well. With regard to Rule 10b-5, the Court has handed down a series of decisions that could be grouped into four trilogies. The article examines the trend over the past 40 years which has become increasingly conservative and finally reactionary.

The …

Janus Capital Group, Inc. V. First Derivative Traders: The Culmination Of The Supreme Court’S Reactionary Rule 10b-5 Jurisprudence Which Protects Fraud At The Expense Of Investors, Charles W. Murdock

Charles W. Murdock

Summary: Janus Capital Group, Inc. v. First Derivative Traders: The Culmination of the Supreme Court’s Reactionary Rule 10b-5 Jurisprudence Which Protects Fraud at the Expense of Investors

“Political” decisions such as Citizens United and National Federation of Independent Business (“Obamacare”) reflect the reactionary bent of several Supreme Court justices. But this reactionary trend is discernible in other areas as well. With regard to Rule 10b-5, the Court has handed down a series of decisions that could be grouped into four trilogies. The article examines the trend over the past 40 years which has become increasingly conservative and finally reactionary.

The …

The Evolution Of The Supreme Court’S Rule 10b-5 Jurisprudence:, Charles W. Murdock

Charles W. Murdock

Summary: The Evolution of the Supreme Court’s Rule 10b-5 Jurisprudence:

Protecting Fraud at the Expense of Investors

This article traces the evolution of Supreme Court jurisprudence over the past forty years through the prism of Rule 10b-5. It uses four “trilogies” to develop this evolution. At the start of the 1970s, the liberal trend characterized by the Warren Court still prevailed. An implied private cause of action was still in favor and litigators were viewed as private attorneys general, enforcing the securities laws to further the policy of protecting investors.

The expansion of Rule 10b-5 was slowed and more judicial …

Cnsx Vs. Tsx-V, Tiffany C. Walsh

Tiffany Walsh J.D., B.Comm.

The Toronto Stock Exchange Venture (TSX-V) and the Canadian National Stock Exchange (CNSX) are both public capital markets that cater to small cap companies that wish to expand their equity financing opportunities. There are many listing requirements to be complied with and several advantages/disadvantages for each market that are analyzed below.

The Dodd-Frank Wall Street Reform And Consumer Protection Act: What Caused The Financial Crisis And Will Dodd-Frank Succeed In Preventing Future Crises?, Charles W. Murdock

Charles W. Murdock

Summary: The Dodd-Frank Wall Street Reform and Consumer Protection Act: What Caused the Financial Crisis and Will Dodd-Frank Succeed in Preventing Future Crises?

We are still experiencing the devastating impact of the financial crisis which came to a head on September 18, 2008 when Secretary Paulson told Congressional leaders that “[u]nless you act, the financial system of this country and the world will melt down in a matter of days.”

To prevent future crises of this magnitude, last year Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act. However, this year, legislation has already been introduced to repeal …

Toward A Just Measure Of Repose: The Statute Of Limitations For Securities Fraud, Michael J. Kaufman

Michael J. Kaufman

Toward a Just Measure of Repose: The Statute of Limitations for Securities Fraud

by

Michael J. Kaufman*

John M. Wunderlich**

ABSTRACT

Statutes of limitations have been part of the architecture of civil litigation for centuries. They are designed to mitigate the risk that evidence of meritorious claims will become stale and also to relieve those who might be exposed to such claims from unending uncertainty about whether they will be brought. The “stale evidence” rationale is rooted in the premise that resolution of claims on their merits is more likely if the evidence, including testimony based on recall, is produced …

Toward A Just Measure Of Repose: The Statute Of Limitations For Securities Fraud, Michael J. Kaufman

Michael J. Kaufman

Toward a Just Measure of Repose: The Statute of Limitations for Securities Fraud

by

Michael J. Kaufman

John M. Wunderlich

ABSTRACT

Statutes of limitations have been part of the architecture of civil litigation for centuries. They are designed to mitigate the risk that evidence of meritorious claims will become stale and also to relieve those who might be exposed to such claims from unending uncertainty about whether they will be brought. The “stale evidence” rationale is rooted in the premise that resolution of claims on their merits is more likely if the evidence, including testimony based on recall, is produced …

The Financial Reform Act: Will It Succeed In Reversing The Causes Of The Subprime Crisis And Prevent Future Crises?, Charles W. Murdock

Charles W. Murdock

Summary: The Financial Reform Act: Will It Succeed in Reversing the Causes of the Subprime Crisis and Prevent Future Crises? By: Professor Charles W. Murdock

The current financial crisis, which could have plunged the world into a financial abyss similar to the Great Depression, is far from resolved. The financial institutions, which this article asserts caused the crisis, have returned to profitability and have paid billions of dollars in bonuses, while ordinary Americans have borne the brunt of the meltdown, with formal unemployment hanging around the 10% mark. This has caused some to comment that profits have been privatized and …

How Incentives Drove The Subprime Crisis, Charles W. Murdock

Charles W. Murdock

How Incentives Drove the Subprime Crisis

In order to address any systemic problem, whether the goal is to change the system, regulate the system, or change the incentives driving a system, it is necessary to appreciate all the drivers operating within the system. In the case of the subprime crisis, one of the drivers was the changing nature of the subprime loans, which was not factored into the models used by the investment bankers, the credit rating agencies, and the issuers of credit default swaps.

This paper is an attempt to look dispassionately at the subprime crisis from a particular …

How Incentives Drove The Subprime Crisis, Charles W. Murdock

Charles W. Murdock

In order to address any systemic problem, whether the goal is to change the system, o regulate the system, or change the incentives driving a system, it is necessary to appreciate all the drivers operating within the system. In the case of the subprime crisis, one of the drivers was the changing nature of the subprime loans, which was not factored into the models used by the investment bankers, the credit rating agencies, and the issuers of credit default swaps.

This paper is an attempt to look dispassionately at the subprime crisis from a particular perspective, namely, the incentives that …

Taking Stock -- Salary And Options Too: The Looting Of Corporate America, Kenneth R. Davis

Kenneth R. Davis

Abstract “Taking Stock – Salary and Options Too: The Looting of Corporate America” Executive compensation has come to mean corporate greed. CEO pay has soared to incomprehensible levels. Even during the current financial crisis, more CEOs saw pay increases than cuts. Public resentment to multi-million dollar paychecks swelled to outrage when AIG and Merrill Lynch used bailout funds to dispense enormous bonuses to executives. The looting of America’s corporations has led to numerous strategies to curb executive compensation. These strategies include heightened corporate disclosure requirements, tax incentives, say-on-pay, and shareholder input into the process for nominating directors. All these strategies …

Taking Stock -- Salary And Options Too: The Looting Of Corporate America, Kenneth R. Davis

Kenneth R. Davis

Abstract of “Taking Stock – Salary and Options Too: The Looting of Corporate American” Executive compensation has come to mean corporate greed. CEO pay has soared to incomprehensible levels. Even during the current financial crisis, more CEOs saw pay increases than cuts. Public resentment to multi-million dollar paychecks swelled to outrage when AIG and Merrill Lynch used bailout funds to dispense enormous bonuses to executives. The looting of America’s corporations has led to numerous strategies to curb executive compensation. These strategies include heightened corporate disclosure requirements, tax incentives, say on pay, and shareholder input into the process for nominating directors. …

Taking Stock -- Salary And Options Too: The Looting Of Corporate America, Kenneth R. Davis

Kenneth R. Davis

Abstract “Taking Stock – Salary and Options Too: The Looting of Corporate America” Executive compensation has come to mean corporate greed. CEO pay has soared to incomprehensible levels. Even during the current financial crisis, more CEOs saw pay increases than cuts. Public resentment to multi-million dollar paychecks swelled to outrage when AIG and Merrill Lynch used bailout funds to dispense enormous bonuses to executives. The looting of America’s corporations has led to numerous strategies to curb executive compensation. These strategies include heightened corporate disclosure requirements, tax incentives, say on pay, and shareholder input into the process for nominating directors. All …

Why Not Tell The Truth?: Deceptive Practices And The Economic Meltdown, Charles W. Murdock

Charles W. Murdock

Today we are witnessing a crisis caused by economic formulae developed without a responsible exercise of judgment and, in many instances, with a shocking disregard for the truth. The virtue of truthfulness is not just some abstract moral principle. Rather, it is a critical component of a well functioning society. As the current situation demonstrates, the lack of regard for truthfulness can have disastrous consequences, not just for our own country, but around the world.

This article will first examine how broadly truth is devalued throughout our society. Second, it will focus on the lack of truthfulness in politics and …

The Fragile Armistice: The Legal, Economic, And Policy Implications Of Trading In A Competitor's Stock, Karl T. Muth

Karl T Muth

This paper examines the legal and other implications when a corporation elects to use corporate treasury resources to trade in a competitor's stock, with a primary focus on short-selling of a direct competitor's stock and the reaction of markets, media, and stakeholders to this activity, as well as a discussion of the practice's relative rarity. Included are brief discussions of the history of securities law around short-selling, the legal landscape internationally, and the timeliness of this particular issue in the context of the market conditions of Q3/Q4-2008.

With Avarice Aforethought: Insider Trading And 10b5-1 Plans, Karl T. Muth

Karl T Muth

The 10b5-1 plan and its growing popularity create a variety of governance problems and temptations for executives at publicly-traded corporations. The thought, in creating a safe harbor for such plans, was to allow insiders to diversify their individual holdings while in possession of nonpublic, material information. The 10b5-1 plan allows the actual liquidation transaction to occur while the plan participant is in possession of inside information, so long as the orders or instructions causing the trade were created as part of a "plan" that predates the insider's acquisition of the pertinent information. This creates a sort of time machine, where …

Corporate Corruption And The Complicity Of Congress And The Supreme Court - The Tortuous Path From Central Bank To Stoneridge Investment Partners, Charles W. Murdock

Charles W. Murdock

The main thrust of this article is that courts and legislatures, particularly the past Republican Congresses and the Supreme Court, as well as lower federal courts, are biased in favor of management; moreover that their failure to hold management to account has emboldened management to engage in illicit behavior and has led to supineness, or worse, by gatekeepers, such as accountants and boards of directors. The willingness of federal courts to disregard blatant corruption and give crooks a free pass by engaging in outcome determinative decision making and strained interpretations of the law is epitomized in the recent decision of …

Corporate Corruption And The Complicity Of Congress And The Supreme Court - The Tortuous Path From Central Bank To Stoneridge Investment Partners, Llc V. Scientific-Atlanta, Inc. [Rev’D 7/6/08], Charles W. Murdock

Charles W. Murdock

The main thrust of this article is that courts and legislatures, particularly the past Republican Congresses and the Supreme Court, as well as lower federal courts, are biased in favor of management; moreover that their failure to hold management to account has emboldened management to engage in illicit behavior and has led to supineness, or worse, by gatekeepers, such as accountants and boards of directors. The willingness of federal courts to disregard blatant corruption and give crooks a free pass by engaging in outcome determinative decision making and strained interpretations of the law is epitomized in the recent decision of …

Corporate Corruption And The Complicity Of Congress And The Supreme Court - The Tortuous Path From Central Bank To Stoneridge Investment Partners, Charles W. Murdock

Charles W. Murdock

The main thrust of this article is that courts and legislatures, particularly the past Republican Congresses and the Supreme Court, as well as lower federal courts, are biased in favor of management; moreover that their failure to hold management to account has emboldened management to engage in illicit behavior and has led to supineness, or worse, by gatekeepers, such as accountants and boards of directors. The willingness of federal courts to disregard blatant corruption and give crooks a free pass by engaging in outcome determinative decision making and strained interpretations of the law is epitomized in the recent decision of …

Corporate Corruption And The Complicity Of Congress And The Supreme Court - The Tortuous Path From Central Bank To Stoneridge Investment Partners, Charles W. Murdock

Charles W. Murdock

This article asserts that Congress and the federal courts are complicit in the widespread corporate corruption that has come to light this past decade. It begins by exploring the notion of bias and then chronicles judicial developments which have protected corporate officials, who have engaged in securities fraud and other wrongful conduct, at the expense of innocent shareholders and investors. It also analyzes the public policy in favor of corruption embodied in the Private Litigation Securities Reform Act, and the actions of federal courts in expanding the protection of PLSRA even beyond that dictated by the language of the statute. …

Corporate Corruption And The Complicity Of Congress And The Supreme Court - The Tortuous Path From Central Bank To Stoneridge Investment Partners, Llc V. Scientific-Atlanta, Inc., Charles W. Murdock

Charles W. Murdock

Corporate Corruption and the Complicity of Congress and the Supreme Court - The Tortuous Path from Central Bank to Stoneridge Investment Partners This article asserts that Congress and the federal courts are complicit in the widespread corporate corruption that has come to light this past decade. It begins by exploring the notion of bias and then chronicles judicial developments which have protected corporate officials, who have engaged in securities fraud and other wrongful conduct, at the expense of innocent shareholders and investors. It also analyzes the public policy in favor of corruption embodied in the Private Litigation Securities Reform Act, …

Corporate Corruption And The Complicity Of Congress And The Supreme Court - The Tortuous Path From Central Bank To Stoneridge Investment Partners, Llc V. Scientific-Atlanta, Inc.., Charles W. Murdock

Charles W. Murdock

This article asserts that Congress and the federal courts are complicit in the widespread corporate corruption that has come to light this past decade. It begins by exploring the notion of bias and then chronicles judicial developments which have protected corporate officials, who have engaged in securities fraud and other wrongful conduct, at the expense of innocent shareholders and investors. It also analyzes the public policy in favor of corruption embodied in the Private Litigation Securities Reform Act, and the actions of federal courts in expanding the protection of PLSRA even beyond that dictated by the language of the statute. …

Auction Rate Securities: Mechanics And Turmoil, Sachin Raval

Sachin R Raval

This study's objective was to understand the origins, mechanics and recent turmoil of the Auction Rate Securities market. Prior to the 2008 collapse, the ARS market had a successful 20-year history. Many investors believed that auction rate securities were cash equivalents with above market yields. Unfortunately, due to the credit crunch, these securities became illiquid, as no buyers were willing to take existing holders' positions. Furthermore, the clearing rate or interest rate of these securities is set through a Dutch auction. In 2006, the SEC conducted a probe of the ARS market. This probe revealed that broker/dealers prevented failed auctions …

The Fortunes & Foibles Of Exchange-Traded Funds, William A. Birdthistle

William Birdthistle

One of the most dynamic and complex new investment vehicles on the market today is the exchange-traded fund, a security that provides the diversification of a mutual fund but trades on an exchange like a stock. In just over a decade, the number of ETFs has proliferated to well over 500, attracting almost half a trillion dollars in investment. Most of that growth has occurred in just the past two years, and ETFs are projected to continue growing at a pace far faster than hedge funds and mutual funds in the coming years. Yet for all this extraordinary growth, legal …

Foreword: On The Borderlands Of Derivatives: Rocket Science For The Next Millennium (Symposium Editor), Philip Hablutzel

Philip N. Hablutzel

No abstract provided.