Law Commons^™

Boilerplate And The Impact Of Disclosure In Securities Dealmaking, Jeremy Mcclane

Vanderbilt Law Review

Capital markets dealmaking, like many kinds of business transactions, is built on a foundation of copied and recycled language what many call boilerplate. Regulators and the bar periodically call for less reliance on boilerplate, but despite these pressures, boilerplate remains a fixture of ever-growing securities disclosures. This Article explores why boilerplate persists and how it affects investors, showing that boilerplate may have a more complex role than commonly recognized. This Article does so by developing a theory on the effect of boilerplate in securities disclosure-a context that is little studied despite a wealth of literature on boilerplate in other settings--and …

The Securities Black Market: Dark Pool Trading And The Need For A More Expansive Regulation Ats-N, Brian P. Baxter

Vanderbilt Law Review

Procedural law in the United States seeks to achieve three interrelated goals in our system of litigation: efficient processes that achieve "substantive justice" and deter wrongdoing, accurate outcomes, and meaningful access to the courts. For years, however, procedural debate, particularly in the context of due process rights in class actions, has been redirected toward more conceptual questions about the nature of legal claims-are they more appropriately conceptualized as individual property or as collective goods? At stake is the extent to which relevant procedures will protect the right of individual claimants to exercise control over their claims. Those with individualistic conceptions …

Setting Attorneys' Fees In Securities Class Actions: An Empirical As, Lynn A. Baker, Michael A. Perino, Charles Silver

Vanderbilt Law Review

n 1995, Congress overrode President Bill Clinton's veto and enacted the Private Securities Litigation Reform Act ("PSLRA"), a key purpose of which was to put securities class actions under the control of institutional investors with large financial stakes in the outcome of the litigation.' The theory behind this policy, set out in a famous article by Professors Elliot Weiss and John Beckerman, was simple: self-interest should encourage investors with large stakes to run class actions in ways that maximize recoveries for all investors. These investors should naturally want to hire good lawyers, incentivize them properly, monitor their actions, and reject …

Making Banks Transparent, Robert P. Bartlett, Iii

Vanderbilt Law Review

It was March 2007, and in the Mediterranean resort of Monte Carlo, Matt King was making dire predictions about a collapse of the U.S. subprime housing market-a subject that must have seemed as inconsequential as it was foreign to most of this casino town's well- heeled visitors. But for Mr. King, head of quantitative credit strategy for Citigroup, the ramifications of rising subprime foreclosure rates were anything but inconsequential. Speaking at Citigroup's annual credit conference, King emphasized how subprime credit had been repackaged into securities such as collateralized debt obligations ("CDOs"), which now sat in large quantities on banks' balance …

There Are Plaintiffs And ... There Are Plaintiffs: An Empirical Analysis Of Securities Class Action Settlements, James D. Cox, Randall S. Thomas, Lynn Bai

Vanderbilt Law Review

Reform of the securities class action is once again the subject of national debate. The impetus for this debate is the reports of three different groups-the Committee on Capital Market Regulation,' the Commission on the Regulation of U.S. Capital Markets in the 21st Century, and McKinsey & Company.3 Each of the reports focuses on a single theme: how the contemporary regulatory culture places U.S. capital markets at a competitive disadvantage to foreign markets. While the reports target multiple regulatory forces in their calls for reform, each report singles out securities class actions as one of the prime villains that place …

The Evidence On Securities Class Actions, Stephen J. Choi

Vanderbilt Law Review

Shareholders of large publicly held corporations face a well- known collective action problem. To the extent an individual shareholder bears all the costs of activities that benefit the entire group of shareholders (giving the individual shareholder only a fraction of the benefits), the individual shareholder will have marginal incentive to pursue such collective activities. Corporations owe their shareholders specific duties and rights. However, due to the collective action problem, no single shareholder may seek to litigate these rights. In the context of the federal securities laws within the United States, the U.S. regime provides a solution: private class actions. This …

Federalism's Future In The Global Village, Barry Friedman

Vanderbilt Law Review

The world we live in is becoming smaller. Although no doubt people have been saying that since at least the travels of Marco Polo, Columbus, and Vespucci, events appear to be moving with startling rapidity. Global trade, global travel, global communication-all are bringing us together in ways that even twenty years ago we hardly could imagine. The words "globalization" and "internationalization" are heard frequently now, and in many new and different contexts. In contrast to the globalization phenomenon, we are accustomed to thinking about American federalism largely in domestic terms. The primary arena in which the debate about the role …

Swimming Against The Deregulatory Tide, Harry S. Gerla

Vanderbilt Law Review

Increasing pressure from institutional investors during the last two decades has led to indirect discounting practices that some commentators contend threatens the fixed price offering system. In response to this concern the SEC in 1980 approved new NASD rules designed to bar direct or indirect discounting in fixed price public offerings of securities. In this Article Professor Gerla argues that the SEC erred in approving the new NASD rules. Professor Gerla states that the new rules change drastically the Commission's policy that the fixed price system operate without direct or indirect government enforcement. Further, he contends that the SEC approved …

Recent Cases, Richard T. Hurt, Jay D. Christiansen, William J. Rees, William D. Gutermuth

Vanderbilt Law Review

Constitutional Law--Action Under Color of State Law--Legislative Authorization of Private Action Resembling Public Function Constitutes Action Under Color of State Law

The instant case creates a two to two split in the circuits on the question whether the seizure of a tenant's possessions under a land-lord lien statute is action under color of state law. The decisions in Davis and Anastasia provide the potential for abuse that Fuentes was designed to prevent-the indiscriminate entry into the debtor's home and seizure of his belongings without prior notice and hearing.Hall and the instant opinion, however, provide a more equitable result. While the …

Special Project, Kenneth Harmon, Barbara Moss, W. Patrick Mulloy, Ii, Robert H. Brownlee, Walter T. Eccard, Michael D. Kelly, Timothy C. Maguire, Richard M. Pitt, Stephen K. Rush, Robert D. Tuke, Richard C. Stark Special Project Editor

Vanderbilt Law Review

The One Hundred and First Justice: An Analysis of the Opinions of Justice John Paul Stevens, Sitting as Judge on the Seventh Circuit Court of Appeals

This article will examine the opinions written by Mr. Justice Stevens while he served on the Court of Appeals for the Seventh Circuit. The areas examined are constitutional, antitrust, labor, securities, federal tax, administrative, and federal jurisdictional law. This article also will seek to reach some conclusions on Stevens' position in the several areas while he served on the Seventh Circuit and to suggest the factors he may consider important in deciding cases in …

Recent Cases, Law Review Staff

Vanderbilt Law Review

Constitutional Law--Due Process--Replevin Statutes Allowing Seizure of Property Without Notice and Opportunity for Hearing Violate Due Process Clause of Fourteenth Amendment

Constitutional Law--Right to Counsel--Absent Waiver,No Defendant May Be Imprisoned Unless Represented By Counsel At Trial

Federal Rules of Civil Procedure-Class Actions-Class Action Alleging Similar Injury by Separate Defendants Who Acted Similarly but Independently Allowed Under Rule 23(b)(3)

Securities Regulation--Securities Act of 1933-Access Of All Offerees To Additional Desired Information Required For Section 4(2) Private Offering Exemption

Torts-Joint Tort-feasors--Apportionment of Damages Among Negligent Joint Tort-feasors Based upon Relative Responsibility of Parties

The Securities Investor Protection Act Of 1970: A New Federal Role In Investor Protection, Allan Gates

Vanderbilt Law Review

It has long been a matter of common knowledge that securities, investment involves an element of financial risk. In addition to the obvious hazards of injudicious investment, such as market decline and failure of the corporate venture, there is an appreciable risk of financial loss to the investor due to the potential insolvency of his broker-dealer. Until recently it had been the policy of the federal government to restrict its protection against this latter risk to measures designed to prevent broker-dealer insolvencies and, when an insolvency did occur, to an ordering of the priorities of customer claims in bankruptcy. In …

The Williams Amendments: An Evaluation Of The Early Returns, M. Douglas Dunn

Vanderbilt Law Review

The purpose of this note is to examine the judicial interpretation of the Williams Amendments to the Securities Exchange Act. The background of the legislation is outlined to direct attention to its general purpose and to isolate its intended beneficiaries.' A discussion of the actual amendments will provide the informational base necessary for consideration of the recent cases. The critical discussion of the first few cases interpreting the amendments provides the foundation for a suggested approach in applying the available remedies to violators of the Williams Amendments.

The Underwriter's Duty Of "Due Diligence" Under Section 11 Of The Securities Act: Reflections On Barchris, Theodore W. Lenz

Vanderbilt Law Review

The Securities Act of 1933 seeks to protect the investing public by putting into the hands of the potential securities purchaser information upon which he can base an enlightened investing choice. The participants in a public distribution of securities--including the underwriters are required to collect, accurately and completely in a registration statement and an accompanying prospectus, the relevant facts about the company issuing the securities. Failure to do so will render the participants liable under section 11 of the Act. The Act then imposes a duty of care on the underwriter and enforces that duty by the threat of civil …

Creditors' Rights And Security Transactions -- 1960 Tennessee Survey, Forrest W. Lacey

Vanderbilt Law Review

Two cases involving mechanic's liens were decided during the period under survey. Rowland v. Lowe' presented the question of the validity of a material men's lien against the owner of land subject to a contract of sale which required the purchaser to erect improvements on the land. In order to protect the vendor's lien, which was to be retained in the deed, the contract provided:

"The purchaser obligates himself to pay all sums for labor and materials in the construction of the improvements on said lot, and in no event shall there be any lien on the lot of ground …

Fifteen-Year Survey Of Corporate Developments, 1944-1959, Miguel A. De Capriles

Vanderbilt Law Review

The foregoing survey, it is believed, amply demonstrates the kaleidoscopic variety of the corporate developments of the past fifteen years, even though for obvious reasons much of the detail has had to be omitted. General conclusions are difficult to draw. It seems likely that the success of capitalist enterprise in this, period and the self-imposed improvement in standards of corporate. Fanchon & Marco, Inc. v. Paramount Pictures, 202 F.2d 731 (2d Cir. management have retarded the underlying trend toward expansion of the role of government in the regulation of economic affairs. There has been no occasion for new dramatic statutory …

Regulation Of Motor Carrier Securities, Eugene T. Liipfert, John L. Mechem

Vanderbilt Law Review

The origins of the intercity trucking industry were humble. The development of the motor truck and of an intercity highway system which made its use in the transportation of freight practicable led many enterprising individuals to set themselves up as intercity truckers during the decade between 1925 and 1935. Capital requirements were minimal. The initial investment was frequently no more than the down payment on the motor vehicles employed. In the early stages of development, the typical motor carrier was a sole proprietorship, partnership or family-held corporation which relied for its financing on retained earnings of the business and hand-to-mouth …

State "Blue Sky" And Federal Securities Laws, Edward R. Hayes

Vanderbilt Law Review

The subject of state and federal regulation of securities is one with which most lawyers have little familiarity. It may not have been discussed in any of their law school courses;' and their practice may have involved the organization and financing of few if any corporations. This lack of familiarity results in unawareness of the "extent to which security transactions are subject to regulation, a sometimes erroneous assumption that securities may be issued lawfully by the occasional corporate (and even noncorporate) client without necessity for complying with statutory requirements, and an overlooking of possible rights of clients who may have …

Manipulation Of Share Priorities, Alfred F. Conard

Vanderbilt Law Review

Investors, who seldom read law reviews, continue to put their money into preferred stocks. In the last five reported years, approximately 3 billion of dollars worth of preferred shares have been offered to the public, or more than a third of the value of all stock offered. Can Mr. Becht and the investors both be right?

Presumably the investors are directing their attention to different aspects of preferred stock than is Mr. Becht. Like other lawyers, he is considering what managements can do to preferred shareholders if they do their worst. His conclusions are based on the records of cases …

Book Reviews, Hugh L. Sowards (Reviewer), Stanley D. Rose (Reviewer), William D. Warren (Reviewer)

Vanderbilt Law Review

Securities Legislation

By Louis Loss

Boston: Little, Brown & Com-pany, 1951. Pp. xxvii, 1283. $17.50

reviewer: Hugh L. Sowards

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Private Property, the History of an Idea

By Richard Schlatter

New Brunswick: Rutgers University Press, 1951. Pp. 284. $2.50

reviewer: Stanley D. Rose

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Oil and Gas Law: Collection of articles

TEXAS LAW REVIEW

Austin: Texas Law Review, Inc., 1951. Pp. xix, 1736. $15.00

reviewer: William D. Warren

The Investment Advisers Act Of 1940, W.T. Mallison Jr.

Vanderbilt Law Review

There were many questionable business methods which could be used by advisers prior to the passage of the Act. In 1939, it was not uncommon for an adviser to arrange that one client buy a certain security and that another sell the same one. Where the adviser operated on the then commonly accepted basis of receiving a proportion of profits made by his clients, he could not lose by using this technique. The adviser's sole concern was to seek new clients to replace those whose assets or credulity were exhausted. Adviser custody of clients' funds was the basis of most …