Law Commons^™

Contemporary Legal Transplants: Legal Families And The Diffusion Of (Corporate) Law, Holger Spamann Spamann

BYU Law Review

No abstract provided.

Shareholder Compensation As Dividend, James J. Park

Michigan Law Review

This Article questions the prevailing view that securities-fraud actions suffer from a circularity problem. Because shareholder plaintiffs are owners of the defendant corporation, it is commonly argued that shareholder compensation is a payment from shareholders to themselves with substantial transaction costs in the form of attorney fees. But shareholder compensation is no more circular than a dividend, which is a cash payment to shareholders from the company they own with substantial transaction costs in the form of taxes. In fact, shareholder compensation is less circular than a dividend because it is a transfer to shareholders who purchased stock when the …

Conference On Delaware Fiduciary Duty Of Good Faith After Disney: Meaningful Or Mickey Mouse, Renee Jones

Renee Jones

No abstract provided.

Handbook For Promoting Foreign Direct Investment In Medium-Size, Low-Budget Cities In Emerging Markets, Vale Columbia Center On Sustainable International Investment, Millennium Cities Initiative

Columbia Center on Sustainable Investment Books

In November 2009, the Vale Columbia Center on Sustainable International Investment and the Millennium Cities Initiative (MCI) released the Handbook for Promoting Foreign Direct Investment in Medium-size, Low-Budget Cities in Emerging Markets. With foreign direct investment (FDI) flows declining worldwide by an estimated 40-50% this year (following a decline of over 10% in 2008), investment promotion has become more important than ever: in a highly competitive world FDI market, promotion can make all the difference.

Investment promotion is particularly important for cities other than capital cities, as investors in manufacturing and services often locate primarily in a country’s capital …

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.

Auditing The Pcaob: A Test To The Accountability Of The Uniquely Structured Regulator Of Accountants, Michael A. Thomason, Jr.

Vanderbilt Law Review

After a slew of highly publicized corporate accounting scandals during the early 2000s at prominent companies-including Enron, WorldCom, Adelphia, and Tyco-public confidence in the integrity of financial reporting by public companies was undoubtedly shaken. Several major financial reporting frauds demonstrated serious weaknesses with the then self-regulated accounting profession, including the failure of auditors to detect those companies that were "cooking their books." The collapse of several prominent companies not only affected top executives, who often were subjected to civil and criminal charges, but also produced harsh consequences for several other constituencies who relied on the integrity of the accounting firms …

Loss Causation And Class Certification, Steven Serajeddini

Michigan Law Review

Courts have long faced difficulty interpreting loss causation under Section 10b-5 of the Securities Act of 1934. This difficulty stems from the seemingly irreconcilable conflict between this core element of common law fraud and the procedural demands of Rule 23 of the Federal Rules of Civil Procedure, the typical vehicle for a 10b-5 class action. Recently, some courts and commentators have begun to consider loss causation as an individualized inquiry that is not common among class members, and one that therefore warrants consideration at the class certification stage. The existing justifications center on the conceptually distinct 10b-5 element of reliance, …

Will The Sec Survive Financial Regulatory Reform?, Renee Jones

Renee Jones

No abstract provided.

Conference On The Past, Present, And Future Of The Sec, Renee Jones

Renee Jones

No abstract provided.

From Feudal Land Contracts To Financial Derivatives: The Treatment Of Status Through Specific Relief, John J. Chung

Law Faculty Scholarship

No abstract provided.

Regulate Otc Derivatives By Deregulating Them, Lynn A. Stout

Cornell Law Faculty Publications

When credit markets froze up in the fall of 2008, many economists pronounced the crisis inexplicable and unforeseeable. Lawyers who specialize in financial regulation, and especially the small cadre who specialize in derivatives regulation, knew better.That's because the roots of the catastrophe lay not in changes in the markets, but changes in the law. In particular, the credit crisis can be traced to Congress's 2000 passage of the Commodity Futures Modernization Act, which radically altered the traditional legal approach to financial derivatives.

This shift in the legal treatment of financial derivatives has brought the banking system to its knees. The …

Star Creation: The Incubation Of Mutual Funds, Alan R. Palmiter, Ahmed E. Taha

Vanderbilt Law Review

Mutual fund incubation is a process by which new funds are initially operated out of public view. The high-performing funds are then marketed to investors, and the low-performing funds are quietly terminated. This selection process is not revealed to investors, thus creating the illusion that the successful funds' returns were the result of skill rather than luck. Also, some fund companies subsidize their incubator funds in ways that do not continue after the funds are sold to the public. As a result, the high returns of successful incubator funds generally do not persist after the funds are marketed to investors. …

The Future Of Shareholder Democracy, Lisa M. Fairfax

Indiana Law Journal

In 2007, the Securities and Exchange Commission (SEC) considered, and ultimately rejected, a rule that would have required corporations to include shareholder-nominated candidates on the ballot. This Article seeks to ascertain the impact of this rejection. On the one hand, the SEC's rejection appears to be a stunning blow to the shareholders' rights campaign. This is because many shareholders' rights advocates have long considered access to the corporate ballot as the "holy grail" of their campaign for increased shareholder power. Such advocates believe that access to the corporate ballot is critical to ensuring that shareholders can participate legitimately in the …

The Decisions Of The Corporate Special Litigation Committees: An Empirical Investigation, Minor Myers

Indiana Law Journal

Using an original data set gathered from filings with the U.S. Securities and Exchange Commission, this Article tests the prevailing view in corporate law that special litigation committees invariably decide to dismiss shareholder derivative litigation. It demonstrates that (1) special litigation committees decide to pursue or settle claims much more frequently than heretofore recognized; (2) special litigation committees do not otherwise let defendants off the hook when pursuing or settling claims, in view of the financial recovery to the company in either scenario; (3) most shareholder claims subject to the authority of special litigation committees end up settled, not dismissed,- …

The Future Of Shareholder Democracy, Lisa Fairfax

All Faculty Scholarship

This Article seeks to ascertain the impact of the Securities and Exchange Commission's rejection in 2007 of a proxy access rule, a rule that would have required corporations to include shareholder-nominated candidates on the ballot. On the one hand, the SEC's rejection appears to be a stunning blow to the shareholders' rights campaign because many shareholders' rights advocates have long considered access to the corporate ballot as the "holy grail" of their campaign for increased shareholder power. On the other hand, some corporate experts maintain that characterizing proxy access as the indispensable ingredient for sufficient shareholder influence fails to appreciate …

The Future Of Financial Regulation, Renee Jones

Renee Jones

No abstract provided.

Disquiet On The Home Front: Disturbing Crises In The Nation's Markets And Institutions, Shelby D. Green

Pace Law Review

No abstract provided.

The Legitimate Rights Of Public Shareholders, Lawrence E. Mitchell

Washington and Lee Law Review

In recent years there has been significant ongoing academic debate over the expansion ofpublic shareholders 'participation rights in corporate governance. The debate has accompanied a dramatic increase in institutional shareholder and hedge fund activism attempting to influence the conduct ofcorporate affairs. The legitimacy ofshareholderp articipationr ights depends upon the actual role public shareholders play in contributing to the corporation's function of providing goods and services and, ultimately, to economic growth and social welfare. Few in the debate have stopped to examine this question. This Article presents original empirical evidence that demonstrates that public shareholders do not, on net, contributec apitalt …

The Supreme Court’S Impact On Securities Class Actions: An Empirical Assessment Of Tellabs, Adam C. Pritchard, Stephen Choi

Law & Economics Working Papers Archive: 2003-2009

Using a sample of securities fraud class actions filed between 2003 and 2007, we study the impact of a widely-followed Supreme Court decision from that period, Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308 (2007). This decision clarified the law with respect to one of the most hotly contested issues in securities litigation: pleading scienter. The Tellabs decision reversed a very lenient Seventh Circuit decision with respect to pleading scienter, but replaced it with a standard that is nonetheless relatively generous to plaintiffs. Looking at opinions resolving motions to dismiss decided before and after that decision, we …

Why Financial Regulatory Overhaul Is Overrated, Renee Jones

Renee Jones

No abstract provided.

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.

Overview Of Key Defenses In A Section 11 Claim Against An Auditor

Maureen Van Neste

No abstract provided.

Give Smaller Companies A Choice: Solving Sarbanes-Oxley Section 404 Inefficiency, Paul P. Arnold

University of Michigan Journal of Law Reform

This Note argues that smaller public companies should have the option to opt out of Section 404 of the Sarbanes-Oxley Act of 2002. Optional compliance is economically preferable to the current approach of mandatory compliance. Companies that choose to comply with Section 404 will send a signal to the financial markets that their internal controls meet the high standards Section 404 demands, and investors will reward such companies if they actually value the benefit of that company's additional controls. Similarly, companies that benefit less from additional internal accounting will be able to avoid Section 404's high costs. To clarify the …

The Quiet Metamorphosis: How Derivatives Changed The "Business Of Banking", Saule T. Omarova

Cornell Law Faculty Publications

In the wake of an unprecedented global financial crisis, one of the fundamental questions preoccupying policymakers and students of financial regulation worldwide is "How did we get here?" This Article uncovers and analyzes an important part of our recent regulatory history, which provides a key to understanding some of the deeper, hidden causes of the crisis but whose significance legal scholars have so far failed to appreciate.

The Article examines interpretive letters issued by the Office of the Comptroller of the Currency (OCC), the primary regulator of federally chartered U.S. banks, interpreting the National Bank Act of 1863 to allow …

International Rule Of Law And Constitutional Justice In International Investment Law And Arbitration, Ernst-Ulrich Petersmann

Indiana Journal of Global Legal Studies

Judicial administration of justice through reasoned interpretation, application and clarification of legal principles and rules is among the oldest paradigms of constitutional justice. The principles of procedural justice underlying investor-state arbitration remain controversial, especially if confidentiality and party autonomy governing commercial arbitration risk neglecting adversely affected third parties and public interests. There are also concerns that rule-following and formal equality of foreign investors and home states may not ensure substantive justice in the settlement of investment disputes unless arbitrators and courts take more seriously their customary law obligation of settling disputes in conformity with human rights obligations of governments and …

Cuarto Congreso Nacional De Organismos Públicos Autónomos, Bruno L. Costantini García

Bruno L. Costantini García

Memorias del Cuarto Congreso Nacional de Organismos Públicos Autónomos

"El papel de los Organismos Públicos Autónomos en la Consolidación de la Democracia"

Securities Class Actions Move North: A Doctrinal And Empirical Analysis Of Securities Class Actions In Canada, Adam C. Pritchard, Janis P. Sarra

Law & Economics Working Papers Archive: 2003-2009

A number of Canadian provinces recently have adopted legislation providing shareholders with a claim for secondary market fraud. Although the legislation has some similarities to the “fraud on the market” class action found in the United States, the laws have some important differences. This article compares securities class actions in Canada and the United States, highlighting the differences between the two regimes that are likely to have important strategic consequences for class action attorneys and issuers. The article also collects and analyzes data on the securities class actions that have been filed to date against Canadian issuers in both Canada …

London As Delaware?, Adam C. Pritchard

Law & Economics Working Papers Archive: 2003-2009

Regulatory competition has long driven the path of corporate law in the federal system of the United States. Now, jurisdictional competition has spread to exchange listings. New York took an early lead in that competition in the 1990s, but has now been overtaken by London. Can London prevail in the competition for stock listings in the long term? This essay explores that question through the insights offered by Delaware’s dominance in the market for corporate listings. Delaware has prevailed by offering corporate directors a predictable body of that credibly shields directors from the vagaries of political backlash in times of …

Direct And Derivative Claims In Securities Fraud Litigation, Richard A. Booth

Working Paper Series

In the typical securities fraud class action under Rule 10b-5, the plaintiff class consists of buyers who seek damages equal to the difference between the price paid for the stock during the fraud period and the lower price that prevails after corrective disclosure. The argument here is that this claim is really an amalgam of direct and derivative claims and that the derivative claims should result in recovery by the corporation for the benefit of all stockholders. There are three types of losses that arise in the typical stock-drop action. First, part of the loss may be attributable to lower …

Securitization And Systemic Risk Amid Deregulation And Regulatory Failure

Patricia A. McCoy

During the recent housing boom, private-label securitization without regulation was unsustainable. Without regulation, securitization allowed mortgage industry actors to gain fees and to put off risks. The ability to pass off risk allowed lenders and securitizers to compete for market share by lowering their lending standards, which activated more borrowing. Lenders who did not join in the easing of lending standards were crowded out of the market. Meanwhile, the mortgages underlying securities became more exposed to growing default risk, but investors did not receive higher rates of return. Artificially low risk premia caused the asset price of houses to go …