Law Commons^™

Sacred Corporate Law, Giancarlo Anello, Sergio Alberto Gramitto Ricci, Mohamed Arafa

Faculty Works

This Article investigates the sacred origins of the corporate form. It sheds light on the sacred rituals performed to establish Ancient Roman cities as legal entities. It discusses the role of the Roman Catholic Church in developing the corporate form and in giving birth to a systemized set of rules regulating corporations, which we commonly call corporate law. It analyzes the limitations to the use of the corporate form in Islamic law as well as the streams of Islamic law jurisprudence that recognize legal capacity to specific entities with religious, social, or charitable purposes. It surveys the characteristics of two …

The Problem With Predators, June Carbone, William K. Black

Faculty Works

Both corporate theory and sex discrimination law start with presumptions that CEOs seek to advance legitimate ends and design the internal organization of business enterprises to achieve such ends. Yet, a growing literature questions why CEOs and boards of directors nonetheless select for Machiavellianism, narcissism, psychopathy, and toxic masculinity, despite the downsides associated with these traits. Three scholarly literatures—economics, criminology, and gender theory—draw on advances in psychology to shed new light on the construction of seemingly dysfunctional corporate cultures. They start by questioning the assumption that CEOs—even CEOs of seemingly mainstream businesses—necessarily seek to advance “legitimate” ends. Instead, they suggest …

A Tale Of Two Crises, William K. Black

Faculty Works

The savings and loan debacle of the 1980s was the worst financial scandal in U.S. history. The estimated present value cost to the taxpayers was $150-175 billion ($1993). The debacle was a major contributor to a sharp recession in real estate values in the Southwest. However, it had only a negligible effect on the general economy.

The Japanese economy, the second largest in the world, also experienced a crisis in the 1980s. Twin “bubbles” in its stock and real estate markets hyper inflated for most of the decade of the 1980s. In general, the bigger the bubble, the worse the …

Successful Financial Regulators Think Like Public Health Experts: Why Regulators Must Fight 'Control Fraud' Like Public Health Specialists, William K. Black

Faculty Works

“Control fraud” is the leading cause of bank failures and financial crises. In “control fraud” the persons controlling a seemingly legitimate entity use it as a weapon to defraud. This essay analyzes the role of regulators in two epidemics of control fraud: the savings & loan debacle of the 1980s and the ongoing financial crises that first became acute in the nonprime mortgage sector.

Effective regulation is essential to prevent and contain such epidemics. An epidemic is the natural outcome of a “pathogenic environment” which requires a reservoir of hosts for the pathogens to infect, and “vectors” to spread the …

How Trust Is Abused In Free Markets: Enron’S 'Crooked 'E’', William K. Black

Faculty Works

A market can have a lemon's problem when one party to the transaction has far superior information to the other and defects are not obvious. The classic bad car, the "lemon" led to the name for this theory. A lemon's market is inefficient. Both consumers and reputable sellers of high quality goods are harmed by the consumer's inability to distinguish superior goods. Frauds, who sell poor quality goods by misrepresenting quality are the only winners. Markets beset by lemon's problems may be improved by government intervention, which can aid both consumers and honest sellers.

In his article "How Trust is …