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Full-Text Articles in Law
The Cost Of Securities Fraud, Urska Velikonja
The Cost Of Securities Fraud, Urska Velikonja
Faculty Scholarship
Under the dominant account, securities fraud by public firms harms the firms’ shareholders and, more generally, capital markets. Recent financial legislation—the JOBS Act and the Dodd-Frank Act—as well as the influential 2011 D.C. Circuit decision in Business Roundtable v. SEC reinforce that same worldview. This Article contends that the account is wrong. Misreporting distorts economic decision-making by all firms, both those committing fraud and not. False information, coupled with efforts to hide fraud and avoid detection, impairs risk assessment by providers of human and financial capital, suppliers and customers, and thus misdirects capital and labor to lower-value projects. If fraud …
Matrixx Initiatives, Inc. V. Siracusano: Nasal Spray Decision Throws Corporations Off The Scent Of "Materiality" Definition, Marcie Brecher
Matrixx Initiatives, Inc. V. Siracusano: Nasal Spray Decision Throws Corporations Off The Scent Of "Materiality" Definition, Marcie Brecher
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No abstract provided.
The Missing Link Between Insider Trading And Securities Fraud, Richard A. Booth
The Missing Link Between Insider Trading And Securities Fraud, Richard A. Booth
Faculty Scholarship
In a recent article, I argued that diversified investors - the vast majority of investors - would prefer that securities fraud class actions under the 1934 Act and Rule 10b-5 be dismissed in the absence of insider trading or similar offenses during the fraud period. See Richard A. Booth, The End of the Securities Fraud Class Action as We Know It, 4 Berk. Bus. L. J. 1 (2007), http://ssrn.com/abstract=683197. In this article, I draw on the classic case, SEC v. Texas Gulf Sulfur Company, to show that the federal courts originally viewed securities fraud as inextricably connected to insider trading …
The Thin Line Between Love And Hate: Why Affinity-Based Securities And Investment Fraud Constitutes A Hate Crime, Lisa M. Fairfax
The Thin Line Between Love And Hate: Why Affinity-Based Securities And Investment Fraud Constitutes A Hate Crime, Lisa M. Fairfax
Faculty Scholarship
This article explores the parallels between the prototypical hate crime and affinity fraud—securities and investment fraud that targets identifiable religious, racial and ethnic groups—and asserts that those parallels justify treating affinity fraud as a hate crime.
Form Over Substance?: Officer Certification And The Promise Of Enhanced Personal Accountability Under The Sarbanes-Oxley Act, Lisa M. Fairfax
Form Over Substance?: Officer Certification And The Promise Of Enhanced Personal Accountability Under The Sarbanes-Oxley Act, Lisa M. Fairfax
Faculty Scholarship
This article argues that the requirement under the Sarbanes-Oxley Act (the “Act”) that particular officers certify the accuracy of the financial information contained in their company’s periodic reports fails to alter significantly existing standards of liability for officers who signed or approved such reports prior to the Act’s passage. This failure creates cause for concern about the Act’s potential to meet its objectives. Indeed, the certification requirement represents one of the Act’s principal symbols of officer personal accountability. By demonstrating that the requirement may only be symbolic, my article questions whether the Act can impact the behavior of corporate officers, …
"With Friends Like These ...": Toward A More Efficacious Response To Affinity-Based Securities And Investment Fraud, Lisa M. Fairfax
"With Friends Like These ...": Toward A More Efficacious Response To Affinity-Based Securities And Investment Fraud, Lisa M. Fairfax
Faculty Scholarship
This article highlights the increase in affinity fraud—securities and investment fraud targeting members of a particular racial or ethnic group perpetrated either by a member of that group or someone claiming to advance the groups’ interests. Affinity fraud differs from other forms of securities fraud because perpetrators establish their credibility and the credibility of their investment schemes by appealing to the trust that group members share, often promising that some of the invested funds will be used to assist the group’s church or ethnic community. This reliance on group trust and sense of community persuades otherwise cautious people to participate …