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Full-Text Articles in Law
Private Fund Adviser Registration Act Hr-3818, Anita Krug
Private Fund Adviser Registration Act Hr-3818, Anita Krug
All Faculty Scholarship
This paper comments on the Obama administration's 2009 proposal for the regulation of hedge fund investment advisers.
Financial Regulatory Reform And Private Funds, Anita Krug
Financial Regulatory Reform And Private Funds, Anita Krug
All Faculty Scholarship
This white paper comments on the Obama administration's June 2009 proposal for the regulation of hedge fund investment advisers.
The Regulatory Response To Madoff, Anita Krug
The Regulatory Response To Madoff, Anita Krug
All Faculty Scholarship
This white paper evaluates investor protection mechanisms in the securities regulatory regime at the time the Madoff fraud was exposed. It considers whether the post-Madoff call for additional regulation of hedge funds and/or their managers - and/or their respective activities - was warranted.
The Hedge Fund Transparency Act Of 2009, Anita Krug
The Hedge Fund Transparency Act Of 2009, Anita Krug
All Faculty Scholarship
This white paper provides a review and critique of a bill introduced by Senators Charles Grassley (R-Iowa) and Carl Levin (D-Mich.) in the Senate in early 2009 that, if enacted, would have imposed certain registration and disclosure requirements on hedge funds and certain other private funds.
Selection Neglect In Mutual Fund Advertisements, Jonathan Koehler, Molly Mercer
Selection Neglect In Mutual Fund Advertisements, Jonathan Koehler, Molly Mercer
Faculty Working Papers
Mutual fund companies selectively advertise their better-performing funds. However, investors respond to advertised performance data as if those data were unselected (i.e., representative of the population). We identify the failure to discount selected or potentially selected data as selection neglect. We examine these phenomena in an archival study (Study 1) and two controlled experiments (Studies 2 and 3). Study 1 identifies selection bias in mutual fund advertising by showing that the median performance rank for advertised funds is between the 79th and 100th percentile. Study 2 finds that both novice investors and financial professionals fall victim to selection neglect in …
When Less Liability May Mean More Precaution: The Case Of Nanotechnology, David A. Dana
When Less Liability May Mean More Precaution: The Case Of Nanotechnology, David A. Dana
Faculty Working Papers
The heart of the Article is an exploration of the possible role of common law tort liability in both encouraging and deterring voluntary, precautionary study of new products generally and nanotechnology products in particular. A key variable in considering liability's role as an incentive or deterrent to testing is the manufacturer's subjective assessment of the probability that any injuries from its product would be detected by the injured parties and successfully attributed to the product absent research by the manufacturer itself on the adverse effects of the product. Another key variable is the legal standard for tort liability, and specifically …
The Contextual Rationality Of The Precautionary Principle, David A. Dana
The Contextual Rationality Of The Precautionary Principle, David A. Dana
Faculty Working Papers
This article defines the precautionary principle (PP) primarily based on what it is not: it is not quantitative cost-benefit analysis (CBA) or cost-cost analysis of the sort we associate with the Office of Management and Budget in the United States and U.S. policymaking and policy discourse generally. In this definition, the PP is a form of analysis in which the costs of a possible environmental or health risk are not quantified, or if they are, any quantification is likely to be inadequate to capture the full extent of the costs of not taking regulatory measures to mitigate or avoid the …
The Screening Effect Of The Private Securities Litigation Reform Act, Adam C. Pritchard, Stephen J. Choi, Karen K. Nelson
The Screening Effect Of The Private Securities Litigation Reform Act, Adam C. Pritchard, Stephen J. Choi, Karen K. Nelson
Articles
Prior research shows that the Private Securities Litigation Reform Act (PSLRA) increased the significance of merit-related factors in determining the incidence and outcomes of securities fraud class actions (Johnson et al. 2007). We examine two possible explanations for this finding: the PSLRA may have reduced the incidence of nonmeritorious litigation, or it may have changed the definition of merit, effectively precluding claims that would have survived and produced a settlement pre-PSLRA. We find no evidence that pre-PSLRA claims that settled for nuisance value would be less likely to be filed under the PSLRA regime. There is evidence, however, that pre-PSLRA …
Those Who Forget The Regulatory Successes Of The Past Are Condemned To Failure, William K. Black
Those Who Forget The Regulatory Successes Of The Past Are Condemned To Failure, William K. Black
Faculty Works
This paper shows that the reregulation of the savings & loan (S&L) industry was successful because the regulators correctly identified the primary cause of the second phase of the debacle as an epidemic of “accounting control fraud” and took effective measures to contain such frauds. Control frauds occur when the persons controlling a seemingly legitimate organization use it as a “weapon” to defraud. In the financial sector, accounting control fraud is the “weapon of choice.” The regulators’ primary insights were (1) that lenders optimize accounting fraud by engaging in a distinctive operational pattern that would be irrational for any honest …
A Requiem For The Retail Investor?, Alicia J. Davis
A Requiem For The Retail Investor?, Alicia J. Davis
Articles
The American retail investor is dying. In 1950, retail investors owned over 90% of the stock of U.S. corporations. Today, retail investors own less than 30% and represent a very small percentage of U.S. trading volume. Data on the overall level of retail trading in U.S. equity markets are not available. But recent New York Stock Exchange ("NYSE") data reveal that trades by individual investors represent, on average, less than 2% of NYSE trading volume for NYSE-listed firms. There is no question that U.S. securities markets are now dominated by institutional investors. In his article, "The SEC, Retail Investors, and …