Law Commons^™

Optimal Tax Compliance And Penalties When The Law Is Uncertain, Kyle D. Logue

Articles

This article examines the optimal level of tax compliance and the optimal penalty for noncompliance in circumstances in which the substance of the tax law is uncertain - that is, when the precise application of the Internal Revenue Code to a particular situation is not clear. In such situations, a number of interesting questions arise. This article will consider two of them. First, as a normative matter, how certain should taxpayers be before they rely on a particular interpretation of a substantively uncertain tax rule? If a particular position is not clearly prohibited but neither is it clearly allowed, what …

The Dutch Auction Myth, Peter B. Oh

Articles

The bursting of the internet bubble continues to have ripple effects on the initial public offering (IPO) process. Critics of this process have fashioned a complex set of interconnected objections to the orthodox bookbuilding method for conducting IPOs, pricing shares, and allocating them to preferred investors. Critics instead hail online reverse-bid, or Dutch, auctions (Dutch IPOs) as an alternative method promising more equitable access, efficient prices, and egalitarian allocations.

This article comprehensively assesses the case for Dutch IPOs. Part I dissects critiques of bookbuilding, which rely on anomalous data, derogate established financial literature, and largely evaporate in the face of …

Jurisprudential Schizophrenia: On Form And Function In Islamic Finance, Haider Ala Hamoudi

Articles

Despite its explosive growth over the past several decades, Islamic finance continues to have trouble attracting large numbers of otherwise pious Muslims as potential investors. The underlying reason for this is that the means that the practice employs to circumvent some of the central Muslim bans relating to finance (most notably, the ban on interest) are entirely formal in their structure and are equivalent to conventional structures both legally and economically. However, the practice purports to serve functional ends; namely, through offering Muslims alternative means of finance that are intended to further Islamic ideals of fairness and social justice. This …

Against Irreparable Benefits, Omri Ben-Shahar

Articles

In a recent essay in The Yale Law Journal, Douglas Lichtman argues that courts considering preliminary injunctions should account for irreparable benefits in addition to irreparable harms. This is a provocative idea. If a preliminary injunction harms one party but benefits the other, and if both effects are equally difficult to subsequently undo, why focus on one effect (harm) and ignore the other (benefit)? There is a compelling geometric validity to this symmetry observation. But is this a valuable “flipping” exercise? Does it shed a new light and provide useful insight into the law of injunctions? In this Response I …

Does Nonprofit Ownership Matter?, Jill R. Horwitz

Articles

In recent years, policymakers have increasingly questioned whether nonprofit institutions, particularly hospitals, merit tax exemption. They argue that nonprofit hospitals differ little from their for-profit counterparts in the provision of charity care and, therefore, should either lose their tax-exempt status or adhere to new, strict, and specific requirements to provide free services for the poor. In this Article, I present evidence that hospital ownership-whether it is for-profit, nonprofit, or government owned-has a significant effect on the mix of medical services it offers. Despite notoriously weak enforcement mechanisms, nonprofit hospitals act in the public interest by providing services that are unlikely …

Insider Trading Laws And Stock Markets Around The World: An Empirical Contribution To The Theoretical Law And Economics Debate, Laura Nyantung Beny

Articles

The primary goal of this Article is to bring empirical evidence to bear on the heretofore largely theoretical law and economics debate about insider trading. The Article first summarizes various agency, market, and contractual (or "Coasian") theories of insider trading propounded over the course of this longstanding debate. The Article then proposes three testable hypotheses regarding the relationship between insider trading laws and several measures of stock market performance. Exploiting the natural variation of international data, the Article finds that more stringent insider trading laws are generally associated with more dispersed equity ownership, greater stock price accuracy and greater stock …

Insider Trading Rules Can Affect Attractiveness Of Country's Stock Markets, Laura Nyantung Beny

Articles

The academic debate about the desirability of prohibiting insider trading is longstanding and as yet unresolved. Until Henry Manne’s 1966 book, Insider Trading and the Stock Market, the debate centered on whether insider trading is unfair to public investors who are not privy to private corporate information. However, the fairness approach is malleable and indeterminate and thus does not lend itself to clear-cut policy prescriptions. Since Manne’s book, the focus of the debate has been on the effect of insider trading on economic efficiency. Manne argued that, contrary to the prevailing legal and moral opinion of the time, insider trading …