Law and Economics Commons^™

The Governance And Disclosure Of The Firm As An Enterprise Entity, Yuri Biondi

Seattle University Law Review

During recent decades, the rapid pace of financial markets involving new modes of management, governance, and regulation has framed business firms. This corporate drift toward financialization is summarized under the “shareholder value” label. What do financial markets do? Unequivocally, they organize trading on shares that are securities: tradable financial entitlements established by law, which formalize expectations, and claims of financial rents paid by the issuing company. Actually, how continued quotation on share exchanges came to be the barometer of economic or social welfare is a different matter. The latter adoption has required quite a great leap from “the euthanasia of …

Rationales And Designs To Implement An Institutional Big Bang In The Governance Of Global Finance, Emilios Avgouleas

Seattle University Law Review

The colossal challenges facing international finance pertain to both its governance system and its dual utility and speculative functions, which have become ever more intertwined with the advent of financial innovation. In the aftermath of the Global Financial Crisis (GFC), a number of significant reforms are under way to address the second issue, including additional capital and liquidity requirements for banks, measures to battle interconnectedness in the financial sector, new resolution regimes that would allow banks to fail more easily, and stricter frameworks for bank supervision and monitoring of systemic risk. Yet limited progress has been made with respect to …

Framing Address: A Framework For Analyzing Financial Market Transformation, Steven L. Schwarcz

Seattle University Law Review

The title of this Symposium originally was “Rethinking Financial and Securities Markets.” It is, of course, somewhat presumptuous for scholars to try to rethink financial markets per se. Markets, including financial markets, are driven primarily by supply and demand. But scholars can and should try to influence the future of financial markets by rethinking their fundamental aspects. This Symposium presents work from leading scholars in the fields of law, economics, finance, and accounting. I will try to frame the discussion from the perspectives of these four disciplines. First, however, we need to identify what it is about financial markets that …

Inequities In Corporate And Securities Law: Disabling The Exploitative Chinese Corporation And Charting A Path To International Commercial Accountability, Jonathan P. Schmidt

San Diego International Law Journal

This article seeks to illuminate these issues and provide a roadmap for the U.S. federal and state legislatures to come together to protect the U.S. investor from the type of accounting fraud and stock misinformation that was the impetus behind enacting the Sarbanes-Oxley Act of 2002. First, this article will discuss the legal backdrop and legislative policy behind U.S. laws such as SOX and its enforcement mechanisms, and the ability for shareholders to bring securities class action derivative actions for financial fraud. This article will also discuss trade secrets laws, criminal extradition treaties, international enforcement of judgments, and elucidate the …

Methods For Multicountry Studies Of Corporate Governance (And Evidence From The Brikt Countries), Bernard S. Black, Antonio Gledson De Carvalho, Vikramaditya Khanna, Woochan Kim, B. Burcin Yurtoglu

Law & Economics Working Papers

We discuss the perils in multicountry studies of corporate governance (CG), focusing on emerging markets. The existing studies are massively multicountry studies, which cover many firms across many countries, but rely on the same limited governance elements in each countries, have few firm-level control variables, and use pure-cross-sectional data. This paper discusses the severe data and construct validity issues in these studies, proposes methods to respond to those issues, and applies those methods through a study of five major emerging markets (Brazil, India, Korea, Russia, and Turkey). We develop unique time-series datasets on governance in each country. We address construct …

Zappers & Employment Tax Fraud, Richard Thompson Ainsworth

Faculty Scholarship

Beyond the grey area of worker misclassifications and general employment tax irregularities there are darker employment relationships where workers are intentionally paid in cash “off-the-books” or “under-the-table.” Grey employment relationships present civil enforcement issues that may become criminal; darker-relationships are criminal from the beginning. Zappers are found on the dark side.

Zappers are fraud-technologies that automatically (and remotely) skim cash from electronic cash registers (ECRs) or back room point of sales (POS) systems. Globally, tax auditors are finding that Zappers frequently provide the cash that is used to compensate “under-the-table” workers. In fact, a Zapper appears to be at the …

The Department Of Justice Merger Guidelines: A Critique And A Proposed Improvement, R. Preston Mcafee, Michael A. Williams

Pepperdine Law Review

No abstract provided.

The New Shareholder Power, John C. Carter

Pepperdine Law Review

No abstract provided.

Revisiting The Leveraged Buyout: Is Constructive Fraud Going Too Far?, 46 J. Marshall L. Rev. 429 (2013), Angelo Guisado

UIC Law Review

No abstract provided.

Space Entrepreneurs: Business Strategy, Risk, Law, And Policy In The Final Frontier, 46 J. Marshall L. Rev. 1039 (2013), Michael Laisné

UIC Law Review

Human civilization is on the brink of exploring another frontier. As usual, the super power governments of the world have played a major role in the initial stages. Now, as was the case when brave settlers came to colonize the West, and railroads and financial empires were built, society must rely on the private sector to take civilization to the final frontier. This article will give an overview of the current laws and policies relevant to space entrepreneurship (Part II). The Article explores the road to becoming a space entrepreneur including, a description of startup risks (Part III), an overview …

Teaching Antitrust After The Financial Crisis, Maurice E. Stucke

Journal of Business & Technology Law

No abstract provided.

“Publicness” In Contemporary Securities Regulation After The Jobs Act, Donald C. Langevoort, Robert B. Thompson

Georgetown Law Faculty Publications and Other Works

The JOBS Act of 2012 reflects the largest deregulatory change to the Securities Exchange Act of 1934 over its more than 75 year history. It contracts the coverage of those companies subject to the obligations of ‘publicness” and it introduces an “on ramp” that will permit most newly-public companies to meet a lesser set of disclosure, internal control and governance obligations for up to five years. We set these changes against a larger discussion of when a private enterprise should be forced to take on public status in securities regulation, a topic that has been entirely under theorized. We conclude …

Teaching Business Associations Law In The Evolving New Market Economy, Joan Macleod Heminway

Journal of Business & Technology Law

No abstract provided.

The Corporate Preference For Trade Secret, Andrew A. Schwartz

Publications

Many inventions can be legally protected either by patent or by trade secrecy, and a conventional wisdom exists on how to select between them. This Article adds to that literature by showing that corporations should have an inherent preference for trade secret over patent for reasons relating to their legal form. Among them is the idea that corporations are perpetual entities and therefore perfectly suited to reap the perpetual returns that only a trade secret can offer. The Article also addresses the potential for a conflict between the inherent corporate preference for trade secret and the preferences of corporate managers, …

The Agency Costs Of Agency Capitalism: Activist Investors And The Revaluation Of Governance Rights, Ronald J. Gilson, Jeffrey N. Gordon

Faculty Scholarship

Equity ownership in the United States no longer reflects the dispersed share ownership of the canonical Berle-Means firm. Instead, we observe the reconcentration of ownership in the hands of institutional investment intermediaries, which gives rise to "the agency costs of agency capitalism." This ownership change has occurred because of (i) political decisions to privatize the provision of retirement savings and to require funding of such provision and (ii) capital market developments that favor investment intermediaries offering low-cost diversified investment vehicles. A new set of agency costs arises because in addition to divergence between the interests of record owners and the …

Economics Of Bankruptcy – Introduction, Edward R. Morrison

Faculty Scholarship

This essay surveys important contributions to the economics of bankruptcy. It is an introductory chapter for a forthcoming volume (from Edward Elgar Press) that compiles the work of legal scholars as well as economists working in the field of corporate finance. The essay begins with the foundational theories of Baird, Jackson, and Rea and then collects scholarly work extending, testing, or revising those theories. At various points I identify questions that merit further study, particularly empirical testing.

The Patent Litigation Explosion, James Bessen, Michael J. Meurer

Faculty Scholarship

This Article provides the first look at patent litigation hazards for public firms during the 1980s and 1990s. Litigation is more likely when prospective plaintiffs acquire more patents, when firms are larger and technologically close and when prospective defendants spend more on research and development ("R&D"). The latter suggests inadvertent infringement may be more important than piracy. Public firms face dramatically increased hazards of litigation as plaintiffs and even more rapidly increasing hazards as defendants, especially for small public firms. The increase cannot be explained by patenting rates, R&D, firm value or industry composition. Legal changes are the most likely …

Vat Triangulation With A Us Middleman Vstr, C-587/10, Richard Thompson Ainsworth

Faculty Scholarship

It is not every day that an American firm finds itself in the middle of an EU VAT controversy that significantly develops the law. However, the September 27, 2012 decision of the European Court of Justice (ECJ) does just that. The case is Vogtländische Straβen-,Tief- und Rohrleitungsbau GmbH Rodewisch (VSTR) v. Finanzamt Plauen.

In November 1998 Atlantic International Trading Company (AIT), an American company established in New York, NY, purchased two stone-crushers from VSTR, a firm established in Germany. AIT quickly re-sold the stone-crushers to an end user established in Finland. The VSTR/AIT contract was “ex works,” that is AIT …

Legal Framework For Soviet Privatization, Olga Floroff, Susan Tiefenbrun

Pepperdine Law Review

No abstract provided.

Interpreting Nonshareholder Constituency Statutes, Stephen M. Bainbridge

Pepperdine Law Review

No abstract provided.

Regulatory Conflicts: International Tender And Exchange Offers In The 1990s, John C. Maguire

Pepperdine Law Review

No abstract provided.

Mandatory Class Action Lawsuits As A Restructuring Technique, Bryant B. Edwards, Jeffrey A. Herbst, Selina K. Hewitt

Pepperdine Law Review

No abstract provided.

Corporate Governance: Some Unasked Questions A Personal Commentary, Henry Lesser

Pepperdine Law Review

No abstract provided.

Foreword, Marc I. Steinberg

Pepperdine Law Review

No abstract provided.

Corporations As Ships: An Inquiry Into Personal Accountability And Institutional Legitimacy , Art Wolfe

Pepperdine Law Review

No abstract provided.

How Long Can This Go On? The Controversy Over The Application Of The Statute Of Limitations To S Corporations And Their Shareholders, J. Marcus Sommers

Pepperdine Law Review

No abstract provided.

The Private Costs Of Patent Litigation, James Bessen, Michael J. Meurer

Faculty Scholarship

This paper estimates the total cost of patent litigation to alleged infringers. We use a large sample of stock market event studies around the date of lawsuit filings for US public firms from 1984-99. We find that the total costs of litigation are much greater than legal fees and costs are large even for lawsuits that settle. Lawsuits cost alleged infringers about $28.7 million ($92) in the mean and $2.9 million in the median. Moreover, infringement risk rose sharply during the late 1990s to over 14% of R&D spending. Small firms have lower risk relative to R&D.

Determining The Proper Pleading Standard Under The Private Securities Litigation Reform Act Of 1995 After In Re Silicon Graphics , Erin Brady

Pepperdine Law Review

No abstract provided.

“Advancing With The Times: Industrial Design Protection In The Era Of Virtual Migration”, Horacio E. Gutiérrez

IP Theory

No abstract provided.

Medical Devices Excise Tax (Mdet) — A Market-Specific Vat?, Richard Thompson Ainsworth, Andrew Shact, Gail Wasylyshyn

Faculty Scholarship

VATs flourish in complex, clearly defined markets. New York discovered this when it converted its single-stage retail sales tax on hotel rooms, the Hotel Room Occupancy Tax (HROT), into a multi-stage European-style VAT. The HROT VAT-conversion demonstrates that (a) in a clearly defined market where (b) a single stage tax is imposed on (c) only part of a complex supply chain that (d) losses attributable to supply-chain-fragmentation can be remedied by moving to a multi-stage VAT.

The Medical Devices Excise Tax (MDET) imposes as 2.3% excise tax on the sale by manufacturers, producers or importers of clearly identified medical devises …