Law Commons^™

Constraining Monitors, Veronica Root

Veronica Root

Monitors oversee remediation efforts at dozens, if not hundreds, of institutions that are guilty of misconduct. The remediation efforts that the monitors of today engage in are, in many instances, quite similar to activities that were once subject to formal court oversight. But as the importance and power of monitors has increased, the court’s oversight of monitors and the agreements that most often result in monitorships has, at best, been severely diminished and, at worst, vanished altogether.

The lack of regulation governing monitors is well documented; yet, the academic literature on monitorships to date has largely taken the state of …

The New Global Financial Regulatory Order: Can Macroprudential Regulation Prevent Another Global Financial Disaster?, Behzad Gohari, Karen E. Woody

Karen Woody

This Article posits that the success of macroprudential regulation will depend on four factors. First, the economic philosophy of the central banker in charge of the domestic institution with jurisdiction over macroprudential regulation will prove crucial in the implementation of adopted regulation. If, like Chairman Greenspan, the banker is averse to the exercise of the Central Bank's regulatory oversight authority, then no amount or volume of policy or regulation will prevent or mitigate systemic risks and the accompanying shocks. Second, a sufficiently deep level of international cooperation is required to mitigate regulatory arbitrage, without being so broad that the ensuing …

Algorithmic Risk Assessments And The Double-Edged Sword Of Youth, Megan T. Stevenson, Christopher Slobogin

Christopher Slobogin

Risk assessment algorithms—statistical formulas that predict the likelihood a person will commit crime in the future—are used across the country to help make life-altering decisions in the criminal process, including setting bail, determining sentences, selecting probation conditions, and deciding parole. Yet many of these instruments are “black-box” tools. The algorithms they use are secret, both to the sentencing authorities who rely on them and to the offender whose life is affected. The opaque nature of these tools raises numerous legal and ethical concerns. In this paper we argue that risk assessment algorithms obfuscate how certain factors, usually considered mitigating by …

Fairness And The Willingness To Accept Plea Bargain Offers, Avishalom Tor

Avishalom Tor

In contrast with the common assumption in the plea bargaining literature, we show fairness-related concerns systematically impact defendants' preferences and judgments. In the domain of preference, innocents are less willing to accept plea offers (WTAP) than guilty defendants and all defendants reject otherwise attractive offers that appear comparatively unfair. We also show that defendants who are uncertain of their culpability exhibit egocentrically biased judgments and reject plea offers as if they were innocent. The article concludes by briefly discussing the normative implications of these findings.

Jurisdictional Standards (And Rules), Adam I. Muchmore

Adam I. Muchmore

This Article uses the jurisprudential dichotomy between two opposing types of legal requirements — “rules” and “standards” — to examine extraterritorial regulation by the United States. It argues that there is natural push toward standards in extraterritorial regulation because numerous institutional actors either see standards as the best option in extraterritorial regulation or accept standards as a second-best option when their first choice (a rule favorable to their interests or their worldview) is not feasible. The Article explores several reasons for this push toward standards, including: statutory text, statutory interpretation theories, the nonbinary nature of the domestic/foreign characterization, the tendency …

Private Regulation And Foreign Conduct, Adam I. Muchmore

Adam I. Muchmore

Current U.S. policy on safety regulation for imported food is based largely on ex post measures. Several reform proposals seek to strengthen the ex ante component of this regulatory program. These proposals rely on one or more of three basic strategies: direct extraterritorial regulation; delegation of regulatory authority to private entities; and delegation of regulatory authority to foreign government agencies. This paper explores the ability of each strategy to respond to several principal-agent problems relevant to imported-food safety: the regulatory license problem; interest group capture; and the reality of bribery and threats in many food-exporting countries. Through the lens of …

Legal Entities As Transferable Bundles Of Contracts, Kenneth Ayotte, Henry Hansmann

Kenneth Ayotte

The large, modern business corporation is frequently organized as a complex cluster of hundreds of corporate subsidiaries under the common control of a single corporate parent. Our Article provides new theory and supportive evidence to help explain this structure. We focus, in particular on the advantages of subsidiary entities in providing the option to transfer some or all of the firm's contractual rights and obligations in the future. The theory not only sheds light on corporate subsidiaries but also illuminates a basic function of all types of legal entities, from partnerships to nonprofit corporations. We show that when, as is …

Is The Turkey Halal? Genetically Modified Animal Feed Regulation Where East Meets West, Jennifer Spreng

Jennifer E Spreng

Turkey’s Biosafety Law (2010) imposes some of the world’s most stringent restrictions on the import, release and marketing of genetically modified foodstuffs. The Biosafety Board has not approved a single food event; the Council of State has suspended approval of MON 810; Turks have endured meat and milk price spikes; herders are going bankrupt for lack of affordable feed; and importers have been arrested and prosecuted for trace contamination with unapproved GMOs. It’s a pox an all their houses: Turks want nothing do with GM foodstuffs.

The culprit? The “precautionary principle,” which authorizes taking precautions in the face of scientific …

Att Beforska Barn Och Unga I Hem, Skola, Samhällsvård Och Kriminalvård, Titti Mattsson

Titti Mattsson

The article describes and analyses the legal framework concerning children’s participation in research in Sweden. Research on children is one way to improve children’s living conditions. For example, there is a need for knowledge about children’s and young people’s situation at home, at school, in community care and in correctional facilities. It is inevitable that there arise both ethical and legal issues concerning this research. A law has been in force since 2004, which deals with vetting the ethics of research that involves humans, i.e. the Act (2003:460) concerning the Ethical Review of Research Involving Humans. The article aims to …

Incentivizing Credit Rating Agencies Under The Issuer Pay Model Through A Mandatory Compensation Competition, Robert J. Rhee

Robert Rhee

Credit rating agencies are important institutions of the global capital markets. If they had performed properly, the financial crisis of 2008-2009 would not have occurred. This article offers the simplest fix proposed thus far, and it is contrarian. This Article accepts the central role of rating agencies in the regulation of bond investments, the realities of a duopoly, and the issuer-pay model of compensation. The status quo is the baseline. The role of regulation should be to create the conditions necessary to induce competition. This article proposes that a small, recurring portion of revenue earned by the largest rating agencies …

"Toiling In The Danger And In The Morals Of Despair": Risk, Security, Danger, The Constitution, And The Clinician's Dilemma, Michael L. Perlin, Alison Julia Lynch

Michael L Perlin

Abstract: Persons institutionalized in psychiatric hospitals and “state schools” for those with intellectual disabilities have always been hidden from view. Such facilities were often constructed far from major urban centers, availability of transportation to such institutions was often limited, and those who were locked up were, to the public, faceless and often seen as less than human.

Although there has been regular litigation in the area of psychiatric (and intellectual disability) institutional rights for 40 years, much of this case law entirely ignores forensic patients – mostly those awaiting incompetency-to-stand trial determinations, those found permanently incompetent to stand trial, those …

Navigating Through The Fog Of Cloud Computing Contracts, T. Noble Foster

T. Noble Foster

This paper explores legal issues associated with cloud computing, provides analysis and commentary on typical clauses found in contracts offered by well-known cloud service providers, and identifies strategies to mitigate the risk of exposure to cloud-based legal claims in the critical areas of data security, privacy, and confidentiality. While current research offers numerous case studies, viewpoints, and technical descriptions of cloud processes, our research provides a close examination of the language used in cloud contract terms. Analysis of these contract terms supports the finding that most standard cloud computing contracts are unevenly balanced in favor of the cloud service provider. …

Uncertainty, Daniel A. Farber

Daniel A Farber

The article discusses environmental risks and uncertainties and the current approaches to risk assessment. It is said that conventional risk assessment is a powerful methodology, but over-reliance on it can lead to a failure to acknowledge any risks that do not lend themselves to the technique. Uncertainties can be associated with fat-tailed distributions.

A More Realistic Approach To Directors' Duties, Michelle M. Harner

Michelle M. Harner

Expectations for what fiduciary duties can achieve in the corporate context are unrealistic. This segment of the law—and the alleged deficiencies therein—are blamed for corporate scandals, securities fraud, failed business plans, and even a company's insolvency. Risk is, however, inherent in business, and human beings are flawed. Fiduciary duty law cannot change these basic facts. To the extent we think it can, we will continue to be disappointed and frustrated. This essay considers recasting (and to a greater extent codifying) directors’ duties in a positive frame to help foster better director oversight. It does not suggest that codifying greater clarity …

Towards A Conceptual Model Of User Acceptance Of Location-Based Emergency Services, Anas Aloudat, Katina Michael

Professor Katina Michael

This paper investigates the introduction of location-based services by government as part of an all-hazards approach to modern emergency management solutions. Its main contribution is in exploring the determinants of an individual’s acceptance or rejection of location services. The authors put forward a conceptual model to better predict why an individual would accept or reject such services, especially with respect to emergencies. While it may be posited by government agencies that individuals would unanimously wish to accept life-saving and life-sustaining location services for their well-being, this view remains untested. The theorised determinants include: visibility of the service solution, perceived service …

The Future Prospects Of Embedded Microchips In Humans As Unique Identifiers: The Risks Versus The Rewards, Katina Michael, M.G. Michael

Professor Katina Michael

Microchip implants for humans are not new. Placing heart pacemakers in humans for prosthesis is now considered a straightforward procedure. In more recent times we have begun to use brain pacemakers for therapeutic purposes to combat illnesses such as epilepsy, Parkinson’s Disease, and severe depression. Microchips are even being placed inside prosthetic knees and hips during restorative procedures to help in the gathering of post-operative analytics that can aid rehabilitation further. While medical innovations that utilise microchips abound, over the last decade we have begun to see the potential use of microchip implants for non-medical devices in humans, namely for …

Sublicensing From A Distressed Company: Are You Placing Your Future In The Debtor's Hands?, Michelle M. Harner, David A. Beck

Michelle M. Harner

No abstract provided.

Book Review: The Basics Of Information Security: Understanding The Fundamentals Of Infosec In Theory And Practice, Katina Michael

Professor Katina Michael

Dr Jason Andress (ISSAP, CISSP, GPEN, CEH) has written a timely book on Information Security. Andress who is a seasoned security professional with experience in both the academic and business worlds, categorically demonstrates through his book that underlying the operation of any successful business today is how to protect your most valuable asset- “information”. Andress completed his doctorate in computer science in the area of data protection, and presently works for a major software company, providing global information security oversight and performing penetration testing and risks assessment.

The Big Banks: Background, Deregulation, Financial Innovation And Too Big To Fail, Charles W. Murdock

Charles W. Murdock

Summary: The Big Banks: Background, Deregulation, Financial Innovation and Too Big to Fail

The U.S. economy is still reeling from the financial crisis that exploded in the fall of 2008. This article asserts that the big banks were major culprits in causing the crisis, by funding the non-bank lenders that created the toxic mortgages which the big banks securitized and sold to unwary investors. Paradoxically, banks which were then too big to fail are even larger today.

The article briefly reviews the history of banking from the Founding Fathers to the deregulatory mindset that has been present since 1980. It …

Mitigating Financial Risk For Small Business Entrepreneurs, Michelle M. Harner

Michelle M. Harner

Financial distress by definition threatens a company’s viability. Entrepreneurial and start-up entities are particularly vulnerable to this threat. Yet, much of the discussion following the recent recession focuses almost exclusively on financial institutions and “too-big-to-fail” entities. This essay re-examines lessons gleaned from the recession in the context of smaller, entrepreneurial entities. Specifically, it analyzes how small business entrepreneurs might invoke principles of enterprise risk management to mitigate the long-term impact of financial distress on their business models. It also considers related refinements to extant small business regulations, including the U.S. bankruptcy laws. The essay’s primary objective is to help policymakers, …

Creativity, Improvisation, And Risk: Copyright And Musical Innovation, Olufunmilayo B. Arewa

Olufunmilayo B. Arewa

The goals and beneficiaries of copyright frameworks have long been contested in varied contexts. Copyright is often treated as a policy tool that gives creators incentives to create new works. Incentive theories of copyright often emphasize appropriability, which enables copyright owners to ensure that they profit from their copyrighted works by exercising control over uses of, and access to, such works. Although copyright clearly imposes costs in the form of restrictions on access to copyright-protected works and inefficiencies in the form of deadweight loss, the benefits of copyright are thought by many to outweigh the costs. Copyright discussions may at …

Liability For Future Harm, Alex Stein, Porat Ariel

Alex Stein

This Article considers the possibility of imposing liability in torts for a wrongfully created risk of future harm. We examine the American and English court decisions pertaining to this issue and consider whether a probability-based compensation for the victim’s expected—albeit not yet materialized—harm is just and efficient. We demonstrate how the virtues of a legal regime that allows a tort victim to recover compensation for her expected harm overshadow its vices. We conclude that a person’s risk of sustaining harm in the future should be actionable whenever the risk is substantial. We further conclude that it should be left to …

Risky Business: The Credit Crisis And Failure, Olufunmilayo B. Arewa

Olufunmilayo B. Arewa

The credit crisis represents a watershed event for global financial markets and has been linked to significant declines in real economy performance on a level of magnitude not experienced since World War II. Recognition of the crisis in 2008 has been followed in 2009 and 2010 by a plethora of competing proposals in response to the credit crisis. The result has been a cacophony of visions, voices, and approaches. The sheer noise that has ensued threatens to drown out the fundamental core questions that should be asked about the credit crisis. Among the most important are questions about the relationships …

Trading Places: Securities Regulation, Market Crisis, And Network Risk, Olufunmilayo B. Arewa

Olufunmilayo B. Arewa

The rising power of traders has fundamentally transformed financial market networks and risks. Further, the increased complexity of traded securities and trading strategies within financial networks has magnified shortcomings of existing industry risk management practices as well as dominant regulatory regimes. Financial markets are ultimately places where people trade. Broader social and technological changes have altered the nature of trading activities in financial markets. Innovations in technology, financial instruments, and trading strategies have increased financial market efficiency but have also transformed sources of financial market risks. Financial market networks heighten the need for fundamental rethinking of financial market regulation and …

How The Government Can Protect Home Mortgage Consumers: A Proposal To Provide Consumers A Risk Assessment Of Mortgages, Adeline Park

Adeline Park

The recent sub-prime mortgage crisis has revealed the consumer’s vulnerability in the home mortgage marketplace. Consumers face an overwhelming variety of mortgage options, and are not motivated to invest the necessary time and resources to comprehend the meaning and implications of each loan feature. I propose that the government assess the risk of each loan feature available in the home mortgage market, based on the historical number of foreclosures each loan type has yielded. The government will then require lenders to display the risk assessment icon on all sales, marketing, and advertising materials. The risk assessment icon will identify the …

Whose Eyes Are You Going To Believe: Scott V. Harris And The Perils Of Cognitive Illiberalism, Dan Kahan, David A. Hoffman, Don Braman

David A Hoffman

This paper accepts the unusual invitation to see for yourself issued by the Supreme Court in Scott v. Harris, 127 S. Ct. 1769 (2007). Scott held that a police officer did not violate the Fourth Amendment when he deliberately rammed his car into that of a fleeing motorist who refused to pull over for speeding and instead attempted to evade the police in a high-speed chase. The majority did not attempt to rebut the arguments of the single Justice who disagreed with its conclusion that no reasonable juror could find the fleeing driver did not pose a deadly risk to …