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Articles 1 - 30 of 138
Full-Text Articles in Banking and Finance Law
Nanosecond Policies: Comparing Us And Chinese Approaches To High-Frequency Trading Regulation, Bilal Laghari
Nanosecond Policies: Comparing Us And Chinese Approaches To High-Frequency Trading Regulation, Bilal Laghari
Brooklyn Journal of International Law
High frequency trading has transformed global financial markets, introducing both efficiency gains and significant regulatory concerns. This Note analyzes the divergent approaches of the United States and China in regulating high frequency trading, focusing on how each system addresses issues of market manipulation, information asymmetry, and systemic risk. It contends that the United States’ reliance on outdated and indirect regulatory mechanisms, such as Regulation NMS, has failed to keep pace with technological advancements. In contrast, China’s more recent and targeted regulatory framework provides clearer guidance and stronger oversight of high frequency trading practices. This Note concludes that a hybrid approach, …
The Constitution And Financial Freedom: Analyzing First Amendment Claims About Cryptocurrencies, Mithun Imbulamure
The Constitution And Financial Freedom: Analyzing First Amendment Claims About Cryptocurrencies, Mithun Imbulamure
Brooklyn Journal of Corporate, Financial & Commercial Law
In recent years, the United States has intensified regulatory oversight of cryptocurrency technologies. In August 2022, the Treasury Department's Office of Foreign Assets Control sanctioned Tornado Cash, a cryptocurrency mixer, leading to the prosecution and conviction of its developers for operating an unlicensed money transmitting business. Congress also amended § 6050I of the Tax Code through the Infrastructure Investment and Jobs Act, extending cash transaction reporting requirements to digital assets. These developments prompted cryptocurrency advocates to assert First Amendment protections for their activities, arguing that compelled disclosure requirements violate associational privacy and that computer code constitutes protected speech. The government …
Law Grapples With Its Achilles’ Heel? Uncertainties, Digital Experiments, And The Ai Frontier, Heng Wang
Law Grapples With Its Achilles’ Heel? Uncertainties, Digital Experiments, And The Ai Frontier, Heng Wang
Brooklyn Journal of Corporate, Financial & Commercial Law
The governance of digitalization—which encompasses developments such as artificial intelligence (AI) and central bank digital currencies (CBDCs)—confronts serious challenges. At the core of these challenges are uncertainties, which form the central obstacle to effective governance. These uncertainties range from cyber risks to shifting societal responses. Law, as an institutionalized framework of governance, faces mounting pressure and wrestles with a fundamental vulnerability: traditional legal frameworks struggle to address uncertainties in digitalization. To tackle the pervasive challenges of uncertainties, this article addresses two connected questions: What uncertainties does law face in governing digitalization shaped by emerging technologies? How can a learning-oriented governance …
Can The New Literature About Debt Make A Real Difference In The Real World?, Norman I. Silber
Can The New Literature About Debt Make A Real Difference In The Real World?, Norman I. Silber
Brooklyn Journal of Corporate, Financial & Commercial Law
Thank you for inviting me to participate in this symposium organized around a group of new books about “Debt in the Real World.” My discussion in Part I considers from a historical perspective the place these books occupy as part of a long tradition of consumer reform which has combined popular literature with scholarship to promote change. Part II then explores themes common to this new wave. Part III closes by arguing that as in earlier periods the new wave can make headway notwithstanding attacks on governmental interventions; that there may be space in our political geography for some of …
Chapter 9 Bankruptcy: The Solution That Causes Problems, Peter C. Alexander
Chapter 9 Bankruptcy: The Solution That Causes Problems, Peter C. Alexander
Brooklyn Journal of Corporate, Financial & Commercial Law
There is a little-known form of bankruptcy called a “Chapter 9,” reserved for insolvent cities, villages, and other municipalities. Occasionally, one reads about a city or a county that has filed for Chapter 9 relief, like Detroit, Michigan, or Orange County, California; however, it is very hard to file a Chapter 9 case, in part, because existing law requires a municipality to obtain permission from its home state before it can file for relief in the U.S. Bankruptcy Court. An additional constraint is that the only option municipalities have when seeking bankruptcy relief is to file a Chapter 9 because …
Barbarians At The Gate Or Angels At The Crossroads? Examining The Impact Of The Uk Green Taxonomy On Private Equity Firms, Melek Redzheb, Fatjon Kaja
Barbarians At The Gate Or Angels At The Crossroads? Examining The Impact Of The Uk Green Taxonomy On Private Equity Firms, Melek Redzheb, Fatjon Kaja
Brooklyn Journal of Corporate, Financial & Commercial Law
This Article explores whether the UK Green Taxonomy will foster sustainable corporate governance in private equity-backed portfolio companies. We explore how the Taxonomy will address the greenwashing problem that plagues financial markets, including the private equity industry. Our analysis suggests that general partners will have a twofold response to the new reforms. In the short term, they will seek to address the social concerns of limited partners by negatively screening unsustainable companies and cherry-picking more sustainable ones (the so-called “exit” strategy). In the long term, however, they will adopt a dynamic strategy to transform unsustainable targets into sustainable enterprises on …
Show Me The Money: Approaches To Anti-Money Laundering Compliance For Digital Assets, Mollie Rouan
Show Me The Money: Approaches To Anti-Money Laundering Compliance For Digital Assets, Mollie Rouan
Brooklyn Journal of Corporate, Financial & Commercial Law
The European Union’s Markets in Crypto-Assets Regulation (“MiCA”) created a harmonized framework to regulate digital asset issuance and services that were not already covered by existing regulations. Notably, MiCA requires virtual asset providers to adhere to the Financial Action Task Force Recommendation 16 (“FATF”), also known as the Travel Rule. Though the Travel Rule has existed for almost 20 years, its application to crypto asset transfers is entirely new. The purpose of the Travel Rule is to detect and prevent money laundering and terrorist financing, but its application to cryptocurrency wallet transactions is criticized for being overly burdensome and invasive …
The Dubious Role Of Institutional Investors In Driving The Green Transition: Legal And Economic Constraints, Giovanni Strampelli
The Dubious Role Of Institutional Investors In Driving The Green Transition: Legal And Economic Constraints, Giovanni Strampelli
Brooklyn Journal of Corporate, Financial & Commercial Law
There is a well-established trend that the process of transition to a sustainable economic growth model marked by the pursuit of environmental, social and governance (“ESG”) objectives has large companies at its center, which are considered an essential hub for this purpose given their weight in the global economy. In this context, the role of shareholders, especially institutional investors, plays an important role. Indeed, it is widely recognized that they, having an increasing prominence in the shareholder base of large, listed companies, can push these public companies to adopt more virtuous conduct in the areas of, among others, environmental protection …
Blueprints For The Gilded Age Of Borrowing: Theorizing Mutually Beneficial Policies For The Golden Age Of Private Credit, Sam Friedman
Blueprints For The Gilded Age Of Borrowing: Theorizing Mutually Beneficial Policies For The Golden Age Of Private Credit, Sam Friedman
Brooklyn Law Review
Through financial ingenuity, lending practices often generate an indirect yet significant impact on the average person’s finances. Relatedly, the 2007–2008 Financial Crisis revealed the profound and far-reaching consequences attributable to risky lending. Congress sought to curb lenders’ risk appetite by passing the Dodd-Frank Act, legislation which commissioned new, industry-specific oversight bodies. However, this legislative antidote had a side effect: it engendered a new class of borrowers—those precluded, based on a variety of risk diagnostics, from obtaining capital from the most popular lenders. But when the conventional borrowing doors closed, private lending markets opened in earnest. Since the Covid-19 pandemic, growth …
Opening Wall Street To Main Street: A Proposed Framework For Expanding Private Equity To The Public, Willis Huynh
Opening Wall Street To Main Street: A Proposed Framework For Expanding Private Equity To The Public, Willis Huynh
Brooklyn Law Review
Private equity has become one of the most powerful engines of the modern economy, yet its gates remain closed to the vast majority of Americans. Under current federal securities laws, access to private funds is reserved for “accredited investors” and “qualified purchasers,” wealth-based categories that exclude most American households. This Note argues that these thresholds no longer serve as reliable proxies for sophistication and instead entrench economic inequality by reserving the highest-yielding asset class for the already wealthy. Tracing the development of private equity from its venture-capital roots through the SEC’s recent regulatory efforts—including the vacated 2023 Private Fund Rules—this …
Emerging Compliance In The Generative Decentralized Era, Nizan Geslevich Packin
Emerging Compliance In The Generative Decentralized Era, Nizan Geslevich Packin
Brooklyn Journal of Corporate, Financial & Commercial Law
Is it the end of compliance as we know it? Emerging technologies such as Artificial Intelligence (“AI”), including Generative AI (“GenAI”), and blockchain are reshaping regulatory compliance in the Web 3.0 era. As machine-generated data becomes the norm, traditional models reliant on human oversight are becoming obsolete, necessitating swift adaptation from regulators and industry stakeholders. Historically, compliance was designed to be managed by humans due to the need for critical thinking, ethical considerations, and nuanced decision-making. Yet, in today’s era, this approach is no longer viable. Addressing this need, Regulatory Technology (“RegTech”) has played a key role in modernizing compliance …
Impact Ipsa Loquitur: A Reverse Hand Rule For Consumer Finance, Edward Janger, Susan Block-Lieb
Impact Ipsa Loquitur: A Reverse Hand Rule For Consumer Finance, Edward Janger, Susan Block-Lieb
Faculty Scholarship
No abstract provided.
Emerging Technologies And Perfection Of Security Interests: A Financial University Of Uncertainty, Elizabeth M. Wagenbach
Emerging Technologies And Perfection Of Security Interests: A Financial University Of Uncertainty, Elizabeth M. Wagenbach
Brooklyn Law Review
Since the founding of Bitcoin in 2009, digital assets, such as cryptocurrency, have exploded in popularity. Cryptocurrency has been associated with stories of immense profit and immense loss. The lucky transactors have been able to capitalize on the price fluctuations of cryptocurrency, while the unlucky transactors became victims of the same volatility, losing tremendous amounts of money. The novelty and ingenuity of cryptocurrency has been coupled with mass confusion to transactors and regulators alike. These early days of cryptocurrency have been characterized by a sort of regulatory tug of war that is a direct result of confusion of what cryptocurrency …
Enterprise, Liability, And Insolvency: An Essay In Honor Of Aaron Twerski, Edward Janger
Enterprise, Liability, And Insolvency: An Essay In Honor Of Aaron Twerski, Edward Janger
Faculty Scholarship
No abstract provided.
Beyond Consumer Protection: Standardized Stablecoins Disclosure As Information Infrastructure, Shuping Li
Beyond Consumer Protection: Standardized Stablecoins Disclosure As Information Infrastructure, Shuping Li
Brooklyn Journal of International Law
This article argues for standardized disclosure for stablecoins regulation. Information disclosure has long been considered a primary tool for consumer protection. Stablecoin issuers should disclose honestly and responsibly about the qualification of themselves, as well as the value, quantity, and operational mechanism of their stablecoins. Such disclosure can prevent issuers from taking advantage of information asymmetries for consumer exploitation or fraud. It is then up to the consumers to make informed investment or consumption decisions. More importantly, this paper argues that the fundamental role of information disclosure is to form a knowledge base for financial regulation and policymaking. The importance …
Reimagining Financial Whistleblower Protection: A Proposal For Stronger Protection Under The Sarbanes-Oxley Act, Matthew J. Gilligan
Reimagining Financial Whistleblower Protection: A Proposal For Stronger Protection Under The Sarbanes-Oxley Act, Matthew J. Gilligan
Brooklyn Law Review
Whistleblowers occupy a unique place in American society. They operate in nearly every sphere of modern life, exposing unlawful conduct by financial institutions, technology companies, and government entities, just to name a few. When whistleblowers encounter retaliatory behavior, they are faced with an uphill battle to hold their employer accountable. This note discusses the circuit split regarding whistleblower protections under the Sarbanes-Oxley Act, which was recently granted cert by the US Supreme Court. Until recently, no circuit required whistleblowers suing their employers for engaging in retaliatory behavior to show that the employer acted with retaliatory intent. The Second Circuit broke …
Sec V. Panuwat: The Federal Pursuit Of Shadow Trading, Kayla Kershen
Sec V. Panuwat: The Federal Pursuit Of Shadow Trading, Kayla Kershen
Brooklyn Journal of Corporate, Financial & Commercial Law
In 2021, the SEC filed a complaint against a biopharmaceutical executive, Matthew Panuwat, for trading on material non-public information in violation of both the federal securities laws and his employer’s company policies. However, because the subject of the confidential information was not his employer, but a similarly situated peer company, Panuwat’s conduct constitutes “shadow trading.” The SEC’s enforcement, and the Northern District of California’s subsequent approval, indicate that company insiders may face liability for shadow trading. However, as written, the SEC arguably bases its attachment of federal liability on the company policies that Panuwat was bound by and violated. This …
Banking-As-A-Service: Fintechs Walking The Regulatory Perimeter, Braeden Hodges
Banking-As-A-Service: Fintechs Walking The Regulatory Perimeter, Braeden Hodges
Brooklyn Journal of Corporate, Financial & Commercial Law
Financial technology (fintech) has ushered into today’s financial markets a wave of innovations that have revolutionized the way financial services are rendered and consumed. One such transformation is Banking-as-a-Service (BaaS): a partnership model through which nonbank businesses offer federally regulated banking products directly to consumers. By disintermediating the banking value chain, BaaS is democratizing access to financial services and lowering barriers to entry for many unbanked and underbanked individuals. These initiatives bring with them a number of concerns—such as data privacy risks, new forms of surveillance and discrimination, and economic instability—that are augmented by a systemic deficiency in regulators’ ability …
Entire Fairness Or Bust: The Burst Of The 2020-2021 Spac Bubble, Nicole Lynch
Entire Fairness Or Bust: The Burst Of The 2020-2021 Spac Bubble, Nicole Lynch
Brooklyn Journal of Corporate, Financial & Commercial Law
Special Purpose Acquisition Companies (SPACs) have skyrocketed in recent years as an alternative for taking private companies public through an initial public offering (IPO). SPACs are blank-check companies that raise capital through public exchanges for the “special purpose” of acquiring a privately held company. Once acquired, the private company will take the SPAC’s place on the public exchange, effectively accomplishing the same thing as a traditional IPO but without all the onerous reporting requirements and upfront costs. For these reasons, SPACs have become the next big thing in securities markets despite being around since the 1990s. Throughout 2020 and 2021, …
Racial Pay Equity In “White” Collar Workplaces, Nantiya Ruan
Racial Pay Equity In “White” Collar Workplaces, Nantiya Ruan
Brooklyn Law Review
The racial pay gap in the US is staggering. Wealth disparities between Black, Latinx, and white households reflect the compound negative effects of discrimination, inequality, and lack of opportunities experienced by communities of color. One understudied way to address racial pay equity and the wealth gap is to examine how to widen career paths of high-paying, stable careers for people of color. Career paths are not equal. Some jobs are dead-end, minimum wage-paying, with little to no hope of promotion into a salary that catapults an earner into the next socioeconomic class. Others have growth potential, comfortable wages, and important …
The Development Of The American “Security Interest” And Its Effect On The International Harmonization Of Security Rights, Henry Gabriel
The Development Of The American “Security Interest” And Its Effect On The International Harmonization Of Security Rights, Henry Gabriel
Brooklyn Journal of Corporate, Financial & Commercial Law
No abstract provided.
The Internet Is For Porn…Or Is It? Fair Access To Financial Services And The Need For Onlyporn Legislation, Emily Pollak
The Internet Is For Porn…Or Is It? Fair Access To Financial Services And The Need For Onlyporn Legislation, Emily Pollak
Brooklyn Journal of Corporate, Financial & Commercial Law
Historically, the pornography industry has been the target of countless attempts to delegitimize sex work, but it still endures as a legal industry. Nevertheless, financial service providers such as banks and third-party payment processors have circumvented providing the industry fair access to their services, under vague pretexts such as reputational risk. While porn is not the only marginalized industry affected by unfair treatment from financial service providers, it is among the most targeted. This note gives context to this issue and provides that access to the global marketplace should not be limited by financial institutions functioning as de facto legislators, …
Freeing Cryptoassets From Howey: A Defense Of Genuine Token Offering, Kathryn A. Daly
Freeing Cryptoassets From Howey: A Defense Of Genuine Token Offering, Kathryn A. Daly
Brooklyn Journal of Corporate, Financial & Commercial Law
The Securities Exchange Commission (SEC) is the most powerful regulator of the U.S. securities market and serves to “protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation.” The agency’s task of protecting retail investors and regulating market participants has been, at times, reduced to a binary choice between “Main Street” investors and “Wall Street” insiders. Some regulators and legislators rely on this binary to put pressure on cryptoassets, claiming that more regulation leads to more effective investor protections. This Note rejects that premise. Genuine tokens offerings (i.e., unregistered security offerings not designed to defraud investors) must be …
In Vogue Again: The Re-Rise Of Spacs In The Ipo Market, Maria Lucia Passador
In Vogue Again: The Re-Rise Of Spacs In The Ipo Market, Maria Lucia Passador
Brooklyn Journal of Corporate, Financial & Commercial Law
If the capital markets described the year 2020 in a few words, it would certainly be Special Purpose Acquisition Company (SPACs), which - although to a different extent - are now gaining momentum on both shores of the pond. While, in the United States, SPACs are really enjoying a new lease on life due to the pandemic, the outlook seems positive in Europe too, although data are not comparable to those registered across the Atlantic. This article focuses on SPACs in the United States prior to the COVID-19 pandemic (between January 2010 and December 2019), in order to understand their …
Targeted Regulation Of Proxy Voting Advice: Balancing Monitoring With Information Flow In The Age Of Esg, Jara R.Y. Jacobson
Targeted Regulation Of Proxy Voting Advice: Balancing Monitoring With Information Flow In The Age Of Esg, Jara R.Y. Jacobson
Brooklyn Journal of Corporate, Financial & Commercial Law
Proxy voting advice businesses have historically been guided by disjointed rules and regulations based on their relationship to other entities, but under a 2020 rulemaking they were officially brought under the auspices of the Securities and Exchange Commission. However, after a change in presidential administrations, the Securities and Exchange Commission in 2021 issued a proposed amendment which, if adopted, would rescind some of the more contentious elements of the initial 2020 rulemaking. This Note considers how, even if the 2021 proposed amendments are adopted, the Securities and Exchange Commission can simultaneously regulate and protect proxy voting advice businesses through the …
Walking Between The Lines: Why The Wright Line Standard Is Not Always Applicable While Employees Demand Safer Covid-19 Working Conditions, Michelle Verkhoglaz
Walking Between The Lines: Why The Wright Line Standard Is Not Always Applicable While Employees Demand Safer Covid-19 Working Conditions, Michelle Verkhoglaz
Brooklyn Journal of Corporate, Financial & Commercial Law
Before the National Labor Relation Board’s (NLRB) July 2020 decision in General Motors LLC and Charles Robinson, employers faced difficulty in disciplining employees that engaged in protected activity under the National Labor Relations Act (NLRA) when their behavior was abusive. However, this changed after the NLRB adopted the Wright Line standard in General Motors, a burden-shifting analysis that gives employers the opportunity to prove that the employer would have taken the same action even without the NLRA protected activity. Compared to the NLRB’s prior standards, this standard offers employers a clear-cut defense and the ability to adhere to discrimination laws …
Mutual Fund Advisory Fees: Forty Years Of Failure, Stewart L. Brown Phd., Cfa
Mutual Fund Advisory Fees: Forty Years Of Failure, Stewart L. Brown Phd., Cfa
Brooklyn Journal of Corporate, Financial & Commercial Law
In the 1960s, the Securities and Exchange Commission (SEC) attempted to correct an oversight in the Investment Company Act of 1940 (ICA) that allowed investment management firms to overcharge investors, namely, the absence of enforceable protections over excessive fees. Congress, in the 1970 amendments to the ICA, was influenced by the investment management industry and the resultant legislation sent ambiguous signals to the judicial system. Lacking clear guidance from Congress, in the seminal fee case Gartenberg v. Merrill Lynch, the Second Circuit fashioned a fiduciary standard favorable to the investment management industry. Under this standard, no plaintiff has ever won …
How Discretionary Decision-Making Impacts The Financial Performance And Legal Disclosures Of S&P 500 Funds, Bernard S. Sharfman, Vincent Deluard
How Discretionary Decision-Making Impacts The Financial Performance And Legal Disclosures Of S&P 500 Funds, Bernard S. Sharfman, Vincent Deluard
Brooklyn Law Review
When investment funds track the S&P 500, the index becomes more than just a list of 500 companies. The focus then becomes the financial and regulatory issues that arise from the discretionary decision-making power of the Index Committee that governs the S&P 500. Based on our empirical research and analysis, this article recommends a new principal risk disclosure under SEC Form N-1A, which we refer to as “selection risk,” to be included in the statutory and summary prospectuses of investment funds that track the S&P 500. This type of risk results when the Index Committee uses its discretionary decision-making power …
A True Sense Of Security: How Kirschner V. J.P. Morgan Chase Illustrates The Failings Of The Reves Family-Resemblance Test And The Need To Recognize Some Syndicated Loans As Securities For The Sake Of The Financial System, Aidan D. Mulry
Brooklyn Law Review
Following the 2008 financial crisis, Congress implemented a number of reforms aimed at ensuring that such a man-made disaster—fueled by greed and willful ignorance—is not permitted to happen again. On the surface, these reforms appear to be a success; however, under the surface, there is currently a capital market that is effectively ignored, not only by the reforms passed in the wake of the financial crisis, but by virtually all securities regulation. This capital market, which revolves around so-called syndicated loans, is estimated to be larger than the subprime-mortgage collateralized debt obligations market was at its apex, and yet it …
Avoiding Wasteful Competition: Why Trading On Inside Information Should Be Illegal, Michael D. Guttentag
Avoiding Wasteful Competition: Why Trading On Inside Information Should Be Illegal, Michael D. Guttentag
Brooklyn Law Review
This article offers a new and compelling reason to make all trading based on inside information illegal. The value realized by trading on inside information is unusual in two respects. First, inside information is produced at little or no incremental cost and is nevertheless quite valuable. Second, profits made from trading on inside information come largely at the expense of others. When the value of something exceeds the cost to produce it, a wasteful race to be the first to capture the resulting surplus is likely to ensue. Similarly, resources expended solely to take something of value from others are …