Banking and Finance Law Commons^™

Ghosting The Crowd, Andrew A. Schwartz

Publications

Crowdfunded companies are legally bound to provide investors with an annual report--but most don't. This "ghosting of the crowd" violates federal securities laws and raises the risk of opportunism by entrepreneurs, who are more prone to misbehave if no one is watching. Most ominously, it threatens the very viability of the investment crowdfunding market, as investors who are ghosted by one company are less likely to invest in another.

This Article reports on the embarrassing record of noncompliance with the annual report rule imposed by the Jumpstart Our Business Startups ("JOBS") Act of 2012 and Regulation Crowdfunding, and proposes a …

Carceral Bonds, Tyler E. Dougherty

Faculty Publications

Over the past 50 years, the U.S. financed a massive physical and fiscal expansion of prisons via the municipal bond market—with devastating results. This project is the first to shine a light on the role of municipal debt in state-level carceral decision making, spotlighting the ways that the municipal bond market affects states’ capacities to incarcerate.

This Article argues that the two primary controls of states’ use of the carceral bond market—(1) market discipline and (2) states’ fiscal constitutions—are particularly ineffective at limiting states’ spending on prisons. This failure to restrain states’ spending through the carceral bond market enables private …

Volume 48 Masthead, Seattle University Law Review

Seattle University Law Review

Volume 48 Masthead

Voting Matters: Materiality Considerations And The Shareholder Vote, Renee M. Jones

Seattle University Law Review

For the shareholder franchise to have meaning, shareholders must have access to relevant information to inform their voting decisions. The securities laws’ disclosure requirements play an essential role in informing the shareholder vote.

This Essay focuses on the question of the materiality of information in the context of shareholder voting. It addresses the question of whether ESG-related information is material, positioning the materiality inquiry within the context of shareholders’ voting decisions. It explores the definition of materiality with a focus on the “reasonable investor” concept embedded within the definition. The Essay argues that the implicit expectations of many commentators that …

Volume 48 Masthead, Seattle University Law Review

Seattle University Law Review

Volume 48 Masthead

Understanding The Big Three’S Wavering Support Of Environmental And Social Shareholder Proposals, Jeff Schwartz, Jefferson Jensen

Seattle University Law Review

Because of their substantial equity portfolios, BlackRock, Vanguard, and State Street (the Big 3) are central players in corporate governance. It is, therefore, critical to understand how they vote. One puzzle is that their support for shareholder proposals on environmental and social matters appears to waiver. In 2020, for instance, BlackRock supported 11.1% of environmental proposals at S&P 500 firms. In 2021, it seemingly reversed course, supporting 55.2%. It then flipped again, supporting 32.1% in 2022. Such statistics suggest that the Big 3 are constantly changing their views on these topics. This Article seeks to better understand whether this is …

Volume 48 Masthead, Seattle University Law Review

Seattle University Law Review

Volume 48 Masthead

Transformative Impact Of Ai And Digital Technologies On The Fintech Industry: A Comprehensive Review, Soudeh Pazouki, Behdad Jamshidi, Armia Jalali, Arya Tafreshi

Finance Faculty Publications

This paper examines the impact of artificial intelligence (AI) and digital technologies on the financial technology (FinTech) industry and demonstrates how AI- enabled strategies are increasing the ability of businesses not only to grow, but also to better serve their customers through operational efficiencies. But as immersive as the technological advancements may be, they present challenges in connection with increasingly complicated licensing regulations and a constantly evolving technological landscape. We examine the way AI and algorithms are streamlining workflows, enhancing productivity and expanding access to financial resources for traditionally under – served populations. The paper also discusses the macroeconomic implications …

The Politics Of Bank Supervision: From Eccles To Bessent, Kathryn Judge

Faculty Scholarship

Throughout his tenure as chair of the Federal Reserve Board, Marriner Eccles pressed President Franklin D. Roosevelt to over­haul bank supervision. Eccles eventually made his ongoing service as chair contingent on FDR agreeing to support the effort. This initiative is commonly depicted as a power grab. Federal bank regulation and supervision, then and now, is divvied up among three agencies, the Federal Reserve, the Federal Deposit Insurance Corporation, and the Comptroller of the Currency. Eccles wanted the Fed, and the Fed alone, to be the federal bank supervisor. Having already succeeded in enhancing his power once, by spearheading reforms that …

Forging Monetary Hawks: Early-Life Inflation Experiences And Government Debt In Africa, Christine Strong

Economics Faculty Publications

This study uses a novel dataset to examine the impact of early‐life inflation experiences on government debt across 30 African nations from 1980 to 2022. We propose that central bankers who encountered inflation crises during their formative years are more likely to develop preferences for hawkish monetary policies. However, for these preferences to influence fiscal outcomes, central bankers must operate within an environment of institutional independence. Indeed, our analysis reveals that past exposures to inflation crises, on their own, have no statistically significant impact on government debt. However, when central bank independence is accounted for, a significant negative relationship emerges, …

Preserving The Future: Recognizing Intergenerational Equity In United States Constitutional Jurisprudence In Light Of Evolving Climate Rights Litigation, Molly Morgan

Cardozo Journal of Equal Rights & Social Justice

Climate rights litigation is an essential part of holding states accountable for their climate change obligations. This type of litigation has increased across the globe, and domestic and international courts have issued landmark rulings that serve as precedent for reinforcing state obligations and protecting constitutional and human rights in the process. One focus of these cases is intergenerational equity, which implicates the theory that inadequate state action on climate change violates the rights of future generations. This Article explores the evolution of this theory in domestic and international law, illustrating its increasing importance in climate rights litigation and the necessity …

Unprincipled Investor Bifurcations, Anita K. Krug

American University Law Review

The investment world is full of bifurcations—that is, divisions among groups of investors that the securities laws establish for the purpose of furthering the regulatory goal of investor protection. The notion behind these bifurcations is that only more wealthy investors should be permitted to invest in riskier investment products. However, as this Article details, a more pernicious bifurcation has emerged in recent years, alongside the growing popularity of exchange-traded funds, or “ETFs.” Investing in ETFs is desirable for many investors because ETF shares, unlike shares of mutual funds, can be traded throughout the day. In addition, ETFs allow investors to …

Emortgage And Crypto-Mortgage In Home Finance, Julia Patterson Forrester Rogers

Faculty Journal Articles and Book Chapters

Most home mortgage loans today are documented on physical paper, but they are increasingly closed as eMortgages. The move to electronic documents is inevitable and will ultimately be a positive change for lenders and borrowers. However, additional regulation is needed to address issues raised by electronic home mortgage closings and the “crypto-mortgage,” a mortgage loan with the obligation evidenced by or tethered to a non-fungible token.

Lenders have traditionally required that home mortgage loans be evidenced by a wet-signed paper promissory note to gain the advantages and the certainty of Article 3 of the Uniform Commercial Code (UCC) governing negotiable …

Andrew Phang (Gen. Ed.), Pioneer, Polymath And Mentor: The Life And Legacy Of Yong Pung How, Kwan Ho Lau, Bryan Leow

Research Collection Yong Pung How School Of Law

Many know the story of modern Singapore in broad outline. When the country attained independence in 1965, it was not industrialised and fishing villages still dotted the landscape. By 1990, GDP per capita had risen to around US$13,000, far exceeding its neighbours and on par with Hong Kong and New Zealand. A further three decades on, Singapore today boasts gleaming skyscrapers, well-developed infrastructure and a high degree of trust by residents and investors alike in its government.

Financial Regulation, Aurelio Gurrea-Martinez, Nydia Remolina Leon

Research Collection Yong Pung How School Of Law

No abstract provided.

States Should Legalize Online Casinos To Discourage Consumers From Playing At Offshore Cryptocurrency Casinos, Generate Tax Revenue, And Increase Consumer Protection, Cole Clark

FIU Law Review

No abstract provided.

How Halal Certification And Islamic Ethics Tackle Greenwashing: New Solutions For A Sustainable Economy, Muhammad Afif Ryan Pratama

Journal Of Middle East and Islamic Studies

This research explores the role of halal certification and Islamic ethics in addressing greenwashing within the financial sector. Greenwashing, the practice of exaggerating environmental responsibility, undermines genuine sustainability efforts and trust among consumers and investors. Islamic finance, based on principles of transparency, social justice, and ethical business practices, provides a robust framework to counter such deceptive practices. The study proposes expanding halal certification to incorporate environmental standards, ensuring that companies demonstrate both ethical and sustainable practices. This integrated approach offers a unique solution to combat greenwashing and aligns with broader sustainability goals. By including sustainability in halal certification, the credibility …

Dunham V. Ware Savings Bank: Economic Policy And Federal Law Justify Enforcement Of Due-On-Sale Clauses By State-Chartered Institutions, Martha E. Greene

Maine Law Review

Economic policy should replace state property doctrines as the controlling factor in determining enforceability of due-on-sale clauses. A due-on-sale clause provides mortgagees (lenders) with the means to accelerate the term of a mortgage upon transfer of the original mortgagor's (borrower's) interest in the mortgaged property. Lenders originally used due-on-sale clauses for the purpose of evaluating whether the party to whom the original borrower sought to assign the mortgage was creditworthy. As interest rates have risen, lenders increasingly have used due-on-sale clauses to terminate their commitments to lend mortgage funds at relatively low interest rates. Mortgage instruments secure a borrower's promise …

Lessons Learned: Karl-Philipp Wojick, Maryann Haggerty

Journal of Financial Crises

Karl-Philipp Wojcik is the general counsel of the European Union’s Single Resolution Board (SRB), the central resolution authority within the European Commission (EC) banking union. The banking union, which as of January 1, 2023, encompasses the 20 eurozone countries, along with Bulgaria, was established as part of the financial system reforms stemming from the Global Financial Crisis and the ensuing European sovereign debt crisis. The SRB’s stated mission is to ensure orderly resolution of failing banks, protect taxpayers from state bailouts, and promote financial stability. Wojcik became SRB general counsel in November 2020. Previously, he was a member of the …

Lessons Learned: Calvin Mitchell Iii, Mercedes Cardona

Journal of Financial Crises

Calvin Mitchell III served as executive vice president of the communications group within the executive office of the Federal Reserve Bank of New York (FRBNY) during the Global Financial Crisis. In 2008, Mitchell was tapped by Timothy Geithner, who was then FRBNY president, to head a new group charged with expanding the communications and community affairs functions. Mitchell left the FRBNY in 2009 for the private sector and returned to government in 2021 as assistant secretary for public affairs in the US Treasury Department.

Lessons Learned: Subba Rao Duvvuri, Salil Gupta

Journal of Financial Crises

Subba Rao Duvvuri served as governor of the Reserve Bank of India (RBI) for five years (2008–13). Before that, he was finance secretary to the government of India (2007–08), and secretary to the prime minister’s Economic Advisory Council (2005–07). With a career spanning 35 years in the Indian Administrative Services, Duvvuri has held various positions at the state level in the government of Andhra Pradesh, and at the central government of India. Duvvuri was previously lead economist at the World Bank (1999–2004) and, after 2013, served as a visiting fellow at the National University of Singapore and the University of …

Lessons Learned: Jason Cave, Vincient Arnold, Greg Feldberg

Journal of Financial Crises

Jason Cave was the senior adviser to the chairman of the Federal Deposit Insurance Corporation (FDIC) from 2008 to 2011 and the deputy director of the Division of Complex Financial Institutions at the FDIC from 2011 to 2013. This Lessons Learned summary is based on an interview with Cave held on April 8, 2024. During the interview, Cave discussed the so-called ring-fencing arrangements planned, considered, or executed between various agencies of the US government—the Federal Reserve, Department of the Treasury, and FDIC—and three banks: Wachovia, Citigroup, and Bank of America. These arrangements, sometimes referred to as wraps or risk shields, …

International Monetary Fund: Special Drawing Rights Allocations, 2009, Ikbal S. Ahluwalia, Owen Heaphy, Rosalind Z. Wiggins

Journal of Financial Crises

Despite efforts by the world’s major economies to address stresses in the global financial system, by early 2009, the Global Financial Crisis caused developing and lower-income countries to experience shortages of the major reserve currencies. In August 2009, the International Monetary Fund (IMF) distributed a general allocation of Special Drawing Rights (SDR) of unprecedented size—totaling USD 250 billion (SDR 161.3 billion)—to all member countries in an effort to address these issues and provide liquidity to the world’s economies. In September 2009, it also distributed a special “catch-up” allocation of USD 33 billion in SDRs (SDR 21.5 billion) to eligible members …

International Monetary Fund: Short-Term Liquidity Line, 2020, Carey K. Mott, Léo Brougher

Journal of Financial Crises

As the COVID-19 pandemic spread in March 2020, global financial conditions tightened considerably. In response, global reserve currency-issuing countries extended bilateral swap lines to select countries. Strong demand for US dollar liquidity among emerging markets led the International Monetary Fund (IMF) to introduce the Short-Term Liquidity Line (SLL) on April 15, 2020. The SLL functioned as a swap lending facility. Unlike other IMF liquidity tools, the SLL was a revolving credit line that allowed countries to repeatedly draw funds and make repayments, with each repayment restoring access up to the approved limit across SLL arrangements. Its purpose was to enable …

The 2023 Banking Turmoil: Lessons For Eu Resolution Authorities, Niccolò Cirillo, Francesco Pennesi, Sebastiano Laviola

Journal of Financial Crises

The March 2023 banking turmoil in the United States and Switzerland marked the most significant banking stress in financial markets since the 2007–2009 Global Financial Crisis, prompting a reevaluation of prudential and resolution frameworks. This paper explores whether the 2023 events offer preliminary lessons for resolution authorities within the European Union (EU).

Policymakers often struggle to restore confidence in financial systems and contain the repercussions of financial instability. While the 2023 crises in the US and Switzerland underscored this difficulty, authorities largely managed to mitigate the most severe consequences. Nonetheless, some issues in bank crisis management were identified. This paper …

International Monetary Fund: Foreign Exchange Liquidity Through The Special Drawing Rights Allocation, 2021, Vincient Arnold

Journal of Financial Crises

The official response to the COVID-19 pandemic was costly for governments, particularly those in developing economies with significant existing external debt. On August 2, 2021, the International Monetary Fund (IMF) announced in a press release the allocation of SDR 456 billion (USD 650 billion) in Special Drawing Rights (SDRs) to “address the long-term global need for reserves, build confidence, and foster the resilience and stability of the global economy.” The COVID-19 allocation was a form of unconditional (or “concessional”) liquidity to IMF member nations, similar to a capital injection or grant. It was the fourth-ever general allocation and the largest …

Triangulating The Likelihood Of Confusion: Linguistics And Consumer Surveys, Eric Derosia, Jesse Egbert, Thomas Lee

BYU Law Review

This Article highlights contributions that linguistic analysis can offer in the assessment of the likelihood of confusion in trademark infringement cases. Parties in such cases often engage an expert witness to conduct a survey that measures the likelihood of consumer confusion. We show how an expert linguist can provide important, nonintuitive dynamics of corroboration. We introduce “expert triangulation” as a conceptual framework to analyze whether, and to what extent, experts in linguistics and consumer surveys can corroborate one another. That is, having two different sources of empirical evidence which lead to similar conclusions should be a benefit to the courts, …

The Waiver Problem In Maine Real Property Foreclosure Law: A Commercial Paper Perspective, Dennis M. Patterson

Maine Law Review

When a mortgagee accepts from a mortgagor payment of part of a mortgage arrearage, does the mortgagee then waive its right to foreclose? Many bank counsel will say that the mortgagee does waive its right to foreclose, and they will point for authority to the broad holding of Savings & Loan Association of Bangor v. Tear. In that decision, the Maine Supreme Judicial Court, sitting as the Law Court, seemed to hold that a mortgagee waives its right to foreclose if it accepts tender of a late payment. This broad interpretation of the Savings & Loan decision has proven to …

Misinformed Depositors, Raj Ashar

University of Miami Business Law Review

Social media enables information to travel faster and wider than ever before, creating endless new possibilities. However, it also has opened the door to misinformation or disinformation, which has already wreaked havoc in many industries, including the financial sector. Given the importance of accurate information in banking stability, false information poses a real risk of causing bank runs that lead to bank failures.

This Article documents the risks that false information poses to the banking industry. It then turns its attention to the regulation of false information in securities markets, which has grappled with the issue for many years. Drawing …

Front Matter, Michigan Business & Entrepreneurial Law Review

Michigan Business & Entrepreneurial Law Review

Front Matter for Volume 13, Issue 1 of Michigan Business & Entrepreneurial Law Review