Banking and Finance Law Commons^™

Summary Of Munoz V. Branch Banking & Trust Co., 131 Nev. Adv. Op. No. 23 (Apr. 30, 2015), Michael S. Valiente

Nevada Supreme Court Summaries

NRS 40.459(1)(c)’s limitation on the amount of deficiency judgment that a successor can recover conflicts with the federal Financial Institutions Reform, Recovery and Enforcement Act’s (“FIRREA”) purpose of facilitating the transfer of assets of failed banks to other institutions. Because NRS 40.459(1)(c) limits the value a successor can recover on a deficiency judgment, its application to assets transferred by the Federal Deposit Insurance Corporation (“FDIC”) frustrates FIRREA’s purpose. Therefore, NRS 40.459(1)(c) is preempted by FIRREA to the extent that NRS 40.459(1)(c) limits deficiency judgment that may be obtained from loans transferred by the FDIC.

Crowdfunding Human Capital Contracts, Max Vogel

Cardozo Law Review

No abstract provided.

Chinese Companies And U.S. Class Actions: Securities Litigation And Product Liability, Geoffrey Sant, Charles M. Yablon, Stephen A. Radin, Kayvan Sadeghi, Christopher A. Seeger, Richard H. Silberberg

Cardozo Journal of International and Comparative Law

The symposium examines the challenges Chinese companies face when navigating U.S. class actions and corporate governance rules, emphasizing the importance of understanding jurisdictional complexities, cultural differences, and legal strategies to mitigate risks. It highlights how Chinese companies must adapt to U.S. legal standards to compete globally while addressing enforcement difficulties and settlement dynamics. The analysis underscores the need for transparency, internal controls, and strategic legal counsel to manage these challenges effectively.

Superior Supererogation: Why Credit Default Swaps Are Securities Under The Investment Advisers Act Of 1940, J. Tyler Kirk

William & Mary Business Law Review

No abstract provided.

Securities Regulations Investigations - United States-Swiss Treaty Attempts To Increase Cooperation In Releasing Names Of Swiss-Based Account Holders Involved In United States Securities And Exchange Commission Investigations, Daniel B. Simon Iii

Georgia Journal of International & Comparative Law

No abstract provided.

The Export Trade Note: A New Instrument For International Trade, Eugene A. Ludwig, Michael J. Coursey

Georgia Journal of International & Comparative Law

No abstract provided.

Disaggregated Classes, Benjamin P. Edwards

Faculty Scholarship

No abstract provided.

Closed-End Fund Ipo Considerations, Benjamin P. Edwards

Faculty Scholarship

No abstract provided.

When Governments Write Contracts: Policy And Expertise In Sovereign Debt Markets, W. Mark C. Weidemaier, Mitu Gulati, Anna Gelpern

Faculty Scholarship

At least three times in the past two decades, national governments and institutions at the regional and international levels have tried to reform sovereign bond contracts to facilitate debt restructuring. Increasingly, these efforts have focused on promoting majority modifications clauses, a species of collective action clause (CAC) that facilitates a binding debt restructuring. Rather than legislate or regulate, governments have convened expert commissions, produced model CACs, and aggressively marketed these clauses to debtors and creditors. When events prove the existing CAC template inadequate or irrelevant, the process begins anew. This paper considers this mode of government intervention, which has a …

Trusting Strangers: Dispute Resolution In The Crowd, Anjanette H. Raymond, Abbey Stemler

Cardozo Journal of Conflict Resolution

Hoping to be the next Pebble, entrepreneurs and businesses have flocked to various crowdfunding platforms to contribute dollars to fund initial launches of products and other investments. As readers are undoubtedly aware, Kickstarter was the first and bestknown crowdfunding website, having helped to launch more than 95,000 projects to date. On March 3, 2014, Kickstarter reported that it passed $1 billion in pledges with over 5.7 million people donating to creative projects. There are currently over 800 crowdfunding platforms, with the bulk of dollars contributed going to social campaigns. Of course, as donations grew and the number of backers surged, …

India, Kavita Mohan, Raj Barot, Aseem Chawla, Ashish Jerjurkar, Divya Ashta, Gagan Kumar, Niyati Chanana, Sharanya G. Ranga, Laxmi Joshi, Fatema Merchant, Priyanka Sharma Goswami, Poorvi Chothani

The International Lawyer

This article surveys significant legal developments in India during the year 2014.

The Evolving Role Of Economic Analysis In Sec Rulemaking, Joshua T. White

Georgia Law Review

Recently, the SEC has come under great scrutiny for how it conducts economic analysis around rulemakings, especially those associated with the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank or the Dodd-Frank Act) Dodd-Frank tasked the SEC with more than 100 rulemaking provisions. Perhaps no criticism had a more profound effect than the D.C. Circuit's decision in Business Roundtable v. SEC, which struck down the SEC's proxy access rule due to inadequate economic analysis.

Regulations are imperfect. They cannot be costlessly executed or enforced. Regulators also lack full information on the actual costs and benefits of proposed policies. For …

The New Stock Market: Sense And Nonsense, Merritt B. Fox, Lawrence R. Glosten, Gabriel Rauterberg

Faculty Scholarship

How stocks are traded in the United States has been totally transformed. Gone are the dealers on NASDAQ and the specialists at the NYSE. Instead, a company’s stock can now be traded on up to sixty competing venues where a computer matches incoming orders. High-frequency traders (HFTs) post the majority of quotes and are the preponderant source of liquidity in the new market.

Many practices associated with the new stock market are highly controversial, as illustrated by the public furor following the publication of Michael Lewis’s book Flash Boys. Critics say that HFTs use their speed in discovering changes in …

Banking And Financial Regulation, Steven L. Schwarcz

Faculty Scholarship

This chapter provides a basic overview of banking and financial regulation for the forthcoming Oxford Handbook of Law and Economics (Francesco Paris, ed.). Among other things, the chapter compares traditional and shadow banking and their regulation, differentiating “micro prudential” regulation (which focuses on protecting individual components of the financial system, such as banks) and “macro prudential” regulation (which focuses on protecting against systemic risk). The chapter also examines how regulation can help to correct market failures that undermine financial efficiency. In that context, it discusses, among other things, capital requirements, ring-fencing, and stress testing. Finally, the chapter examines how regulation …

The Relevance Of Law To Sovereign Debt, W. Mark C. Weidemaier, Mitu Gulati

Faculty Scholarship

The literature on sovereign debt treats law as of marginal significance, largely because the doctrine of sovereign immunity leaves creditors few potent legal remedies against sovereign borrowers. Although sovereign debts can indeed by hard to enforce, the goal of this Essay is to demonstrate that law plays a central, and constantly evolving, role in structuring sovereign debt markets. To list just a few examples, legal rules and institutions (i) decide when a borrower is sovereign, (ii) define the consequences of sovereignty by drawing (or refusing to draw) artificial boundaries between the sovereign and other legal entities, (iii) play some role …

The Macroprudential Turn: From Institutional 'Safety And Soundness' To Systematic 'Financial Stability' In Financial Supervision, Robert C. Hockett

Cornell Law Faculty Publications

Since the global financial dramas of 2008-09, authorities on financial regulation have come increasingly to counsel the inclusion of macroprudential policy instruments in the standard ‘toolkit’ of finance-regulatory measures employed by financial supervisors. The hallmark of this perspective is its focus not simply on the safety and soundness of individual financial institutions, as is characteristic of the traditional ‘microprudential’ perspective, but also on certain structural features of financial systems that can imperil such systems as wholes. Systemic ‘financial stability’ thus comes to supplement, though not to supplant, institutional ‘safety and soundness’ as a regulatory desideratum.

The move from primarily micro- …

Politics In Securities Enforcement, Urska Velikonja

Georgia Law Review

American securities enforcement agencies often face charges that they use their enforcement power to further political goals.' Most recently, Standard & Poor's credit rating agency claimed that the U.S. Department of Justice unfairly singled it out for prosecution for fraudulent credit ratings after it downgraded U.S. sovereign debt. The U.S. Securities and Exchange Commission (SEC or the Commission), too, has been accused of using its enforcement politically: of bringing enforcement actions to improve its political standing, to punish its detractors, or to deflect attention from negative reports about its activities; and of holding back investigations of politically-connected figures.

The Nonfinancial Returns Of Crowdfunding, Andrew A. Schwartz

Publications

Securities crowdfunding — the sale of unregistered securities to the public over the Internet — has come under attack before it has even begun. Legal scholars in particular have expressed concern that investors will lose any money they invest in crowdfunding companies. Even assuming that this may be true from a purely financial perspective, these critics are missing an important point: Crowdfund investors with negative returns will not simply have lost their money, but rather they will have spent it (at least in part) on nonpecuniary benefits, including entertainment, political expression and community building. These nonfinancial returns of crowdfunding are …

Banker Loyalty In Mergers And Acquisitions, Andrew F. Tuch

Scholarship@WashULaw

When investment banks advise on merger and acquisition (M&A) transactions, are they fiduciaries of their clients, gatekeepers for investors, or simply arm’s-length counterparties with no other-regarding duties? Scholars have generally treated M&A advisors as arm’s-length counterparties, putting faith in the power of contract law and market constraints to discipline errant bank behavior. This Article counters that view, arguing that investment banks are rightly characterized as fiduciaries of their M&A clients and thus required to loyally serve client interests.

This Article also develops an analytical framework for assessing the liability rules that will most effectively deter disloyalty on the part of …

The New Financial Order: An Essay For Alan Bromberg - Tributes To Professor Alan R. Bromberg, Joel Seligman

Scholarship@WashULaw

In the aftermath of the 2008-2009 financial crisis, I characterized its causes broadly:

First, there was an ongoing economic emergency, initially rooted in the housing and credit markets, which has been succeeded by the collapse of several leading investment and commercial banks and insurance companies, dramatic deterioration of stock market indices, and a rapidly deepening recession.

Second, there were serious breakdowns in the enforcement and fraud deterrence missions of federal financial regulation, notably as illustrated by matters involving Bear Stearns and the other four then independent investment banks subject to the SEC's former Consolidated Supervised Entities program, the government creation …

Liquidity, Systemic Risk, And The Bankruptcy Treatment Of Financial Contracts, Rizwaan J. Mokal

Brooklyn Journal of Corporate, Financial & Commercial Law

No abstract provided.

The Digital Shareholder, Andrew A. Schwartz

Publications

Crowdfunding, a new Internet-based securities market, was recently authorized by federal and state law in order to create a vibrant, diverse, and inclusive system of entrepreneurial finance. But will people really send their money to strangers on the Internet in exchange for unregistered securities in speculative startups? Many are doubtful, but this Article looks to first principles and finds reason for optimism.

Well-established theory teaches that all forms of startup finance must confront and overcome three fundamental challenges: uncertainty, information asymmetry, and agency costs. This Article systematically examines this “trio of problems” and potential solutions in the context of crowdfunding. …

Private And Public Ordering In Safe Asset Markets, Anna Gelpern, Erik F. Gerding

Publications

An influential literature in economics explores the phenomenon of “safe assets” – when participants across financial markets act “as if” certain debt is risk free – as well as its role in the global financial crisis and its implications for post-crisis reform.

We highlight the role of private ordering in constructing safe assets. Private ordering, including contractual devices and transaction structures, contributes to the creation of these debt contracts, to their collective treatment in financial markets as low risk investments, and to the making of deep and liquid markets in them. These contracts and transaction structures also provide a template …

Mandatory Disclosure And Individual Investors: Evidence From The Jobs Act, Colleen Honisberg, Robert J. Jackson Jr., Yu-Ting Forester Wong

Faculty Scholarship

One prominent justification for the mandatory disclosure rules that define modem securities law is that these rules encourage individual investors to participate in stock markets. Mandatory disclosure, the theory goes, gives individual investors access to information that puts them on a more equal playing field with sophisticated institutional shareholders. Although this reasoning has long been cited by regulators and commentators as a basis for mandating disclosure, recent work has questioned its validity. In particular, recent studies contend that individual investors are overwhelmed by the amount of information required to be disclosed under current law, and thus they cannot and do …

The Financial Industry's Plan For Resolving Failed Megabanks Will Ensure Future Bailouts For Wall Street, Arthur E. Wilmarth Jr.

Georgia Law Review

Wall Street has achieved a remarkable political comeback from the financial crisis of 2007-2009. Public anger over bailouts of large financial institutions spurred Congress to pass the Dodd- Frank Wall Street Reform and Consumer Protection Act (Dodd- Frank) in July 2010.1 Megabanks, however, used their political influence to weaken Dodd-Frank's provisions, and they have pursued a determined campaign since 2010 to undermine Dodd- Frank's implementation. A primary goal of Dodd-Frank is to end "too big to fail" (TBTF) treatment for systemically important financial institutions (SIFIs) and their creditors. During the debates over Dodd-Frank, however, Wall Street defeated two major initiatives …

Conduct Of Business Regulation, Andrew F. Tuch

Scholarship@WashULaw

This chapter provides a survey and comparative analysis of conduct of business (COB) regulation. COB regulation governs financial intermediaries’ conduct toward their clients, that is, toward the actors – whether individuals or institutions – with whom financial intermediaries transact in providing financial products and services. Modal regulatory strategies include anti-fraud rules, and duties of care, loyalty, fair-dealing and best-execution – and variants of these duties.

The chapter describes the justifications for COB regulation, the modal regulatory strategies used and the complex frameworks within which COB regulation operates. It then generally assesses US COB regulation, focusing on the regulation of broker-dealers …

Disclaiming Loyalty: M&A Advisors And Their Engagement Letters, Andrew F. Tuch

Scholarship@WashULaw

Are investment banks fiduciaries of their merger and acquisition clients? If not, what rules, if any, constrain the conflicts of interest M&A advisors may face when advising their clients? These questions are rarely asked but central to the regulation of investment banking activities. In their article Bankers and Chancellors, 93 TEX. L. REV. 1 (2014), Professors William W. Bratton & Michael L. Wachter contend that M&A advisors effectively contract out of fiduciary duties in their client engagement letters, “emerging] in practice as arm’s-length counterparties constrained less by rules of law than by a market for reputation.” They also regard recent …

Brief Of Prof. Steven L. Schwarcz As Amicus Curiae, Steven L. Schwarcz

Faculty Scholarship

No abstract provided.

Evaluating The 2013 Euro Cac Experiment, Elena Carletti, Paolo Colla, Mitu Gulati

Faculty Scholarship

On January 1, 2013, it became mandatory that every new sovereign bond issued by a member of the European Monetary Union include a new contract clause called a Collective Action Clause or CAC. This, we believe, constituted the biggest one-time change to the terms of sovereign debt contracts in history, impacting a market of many trillions of euros. And it was not just that the change was big in terms of the size of the market it impacted; it was big in terms of its impact on the documentation of each individual Euro area sovereign bond contract. To illustrate, prior …

Bank Regulation And Securitization: How The Law Improved Transmission Lines Between Real Estate And Banking Crises, Erik F. Gerding

Georgia Law Review

Financial crises take many forms. Real estate crises can devastate economies.' So too can bank crises. Stock market crashes can precipitate crises of their own. The "subprime crisis" represents the confluence and worst of all three; like three cyclones merging together in warm offshore waters, these three kinds of crises generated even more destructive force when conjoined. The panic that took shape in U.S. real estate and capital markets in 2007 represents another example in a long historical line of intertwined banking and real estate crises. Securitization served as a new coupling rod joining cycles in real estate and banking …