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Full-Text Articles in Law
In Praise Of Investor Irrationality, Gregory La Blanc, Jeffrey J. Rachlinski
In Praise Of Investor Irrationality, Gregory La Blanc, Jeffrey J. Rachlinski
Cornell Law Faculty Publications
How should a market filled with investors who chronically make bad investments, but is nevertheless efficient, be regulated? A growing body of evidence suggests that this is the state of most securities markets; investors rely on cognitive processes that produce systematically bad choices, and yet the market remains largely efficient. In fact, cognitive errors might be essential to their efficient operation. Even investors who make systematic errors also often possess real and unique information that can contribute to accurate pricing of securities. If such investors became mindful of their limited ability to distinguish between real information and erroneous information, they …
The Sec At 70: Time For Retirement?, Adam C. Pritchard
The Sec At 70: Time For Retirement?, Adam C. Pritchard
Articles
The Article proceeds as follows. Part I explains the pathologies of the SEC and explores the relation between those pathologies and the SEC's status as an independent agency. Part II then outlines an alternative regulatory structure primarily situated within the executive branch. I also argue that such a relocation of authority would enhance regulatory effectiveness while simultaneously reducing the cost of excessive regulation. The Article concludes with some thoughts about the viability of my proposal.
Improving The Efficiency Of The Angel Finance Market: A Proposal To Expand The Intermediary Role Of Finders In The Private Capital Raising Setting, John L. Orcutt
Law Faculty Scholarship
The angel finance market is of critical importance to the financing and creation of rapid-growth start-ups, whose continuous creation plays a substantial role in the success of the U.S. economy. Unfortunately, the angel finance market suffers from systematic problems, including information and agency problems and high transaction costs, that limit its ability to adequately finance these rapid-growth start-ups. One reason for the angel market's inefficiency is the lack of meaningful financial intermediaries that operate in the market. One logical group that could serve a meaningful intermediary role in the angel market is finders. The current regulatory treatment of finders, however, …
Do Institutions Matter? The Impact Of The Lead Plaintiff Provision Of The Private Securities Litigation Reform Act, Adam C. Pritchard, Stephen J. Choi, Jill E. Fisch
Do Institutions Matter? The Impact Of The Lead Plaintiff Provision Of The Private Securities Litigation Reform Act, Adam C. Pritchard, Stephen J. Choi, Jill E. Fisch
Articles
When Congress enacted the Private Securities Litigation Reform Act in 1995 ("PSLRA"), the Act's "lead plaintiff' provision was the centerpiece of its efforts to increase investor control over securities fraud class actions. The lead plaintiff provision alters the balance of power between investors and class counsel by creating a presumption that the investor with the largest financial stake in the case will serve as lead plaintiff. The lead plaintiff then chooses class counsel and, at least in theory, negotiates the terms of counsel's compensation. Congress's stated purpose in enacting the lead plaintiff provision was to encourage institutional investors-pension funds, mutual …
The Sec At 70: Time For Retirement?, Adam C. Pritchard
The Sec At 70: Time For Retirement?, Adam C. Pritchard
Articles
As one grows older, birthdays gradually shift from being celebratory events to more reflective occasions. One's 40th birthday is commemorated rather differently from one's 2lst, which is, in turn, celebrated quite differently from one's first. After a certain point, the individual birthdays become less important and it is the milestone years to whch we pay particular attention. Sadly for entities like the Securities and Exchange Commission, it is only the milestone years (the ones ending in five or zero, for some reason), that draw any attention at all. No one held a conference to celebrate the SEC's 67th anniversary. Clearly …