Securities Law Commons^™

Unlocking The Corporate Governance Potential Of Mutual Fund Investors, Jeffrey Manns

Nevada Law Journal

America’s mutual fund governance has long consisted of a system of money manager dominance and shareholder impotence. While mutual funds pool together unprecedented sums of capital, investors historically have had no meaningful role in governance and have faced a choice of “love it or leave it” when it comes to their investments in mutual funds.

The controversy over mutual fund managers’ advocacy of Environmental, Social, and Governance (ESG) principles in portfolio companies has reinvigorated interest in repairing the dysfunctional principal-agent relationship between investors and money managers. The management of BlackRock, the world’s largest money manager, ignited an ESG voting controversy …

Outbound Investment Restrictions And International Law’S Challenge, Harlan Grant Cohen

Seattle University Law Review

The Outbound Investment Rule, restricting U.S. investment in certain Chinese advanced technology sectors, has largely been portrayed as an incremental measure, a modest extension to fill loopholes in the existing investment screening regime. But while perhaps the logical next step in the securitization of the economy, the Outbound Investment Rule actually reflects a momentous shift in the relationship between governments and business, one playing out in the United States and around the world and worth attention. Unlike traditional investment screening, the Outbound Investment Rule operates like a sanctions regime, designed not to protect the U.S. economy, but to hamper the …

Navigating Compliance In A Geopolitical Era: The Case Of Chinese Multinationals In The United States, Ji Li

Seattle University Law Review

This Article examines how Chinese multinational companies (MNCs) approach compliance in the United States amid deepening geo-political rivalry and intensified regulatory scrutiny. Drawing on original survey data, this Article maps variations in compliance structures, staffing, and governance mechanisms across Chinese firms and identifies key determinants such as industry-specific regulatory intensity, listing status, and organizational imprinting from headquarters. The analysis employs a dual institutional framework to explain how compliance systems emerge from the interplay between host-state regulatory demands and home-state institutional legacies, producing hybrid structures that blend local adaptation with headquarters-driven replication. Findings reveal that while certain compliance features—such as committee …

Volume 49 Masthead

Seattle University Law Review

Volume 49 Masthead

A Comparative Study Of Chinese And American Approaches To Shaping International Outer Space Law And Norms, Ariel G. Silverman

Seattle University Law Review

This article explores convergences and divergencies in the United States and PRC’s responses to the stalemate in the United Nations over the future of outer space resource governance. I do so by systematically analyzing these leading space-faring nations’ policy-positions and tactics deployed to shape norms around three substantive areas of outer space resource governance: rights of ownership and scope of utilization of space resources, mechanization of the “benefits sharing” principle, and the rights and responsibilities of the private sector. I theorize that these leading space-faring nations have adopted divergent approaches due to their differing historical relationships with international law and …

Table Of Contents

Seattle University Law Review

Table of Contents

The Field Of International Business Transactions Law, Kathleen Claussen

Seattle University Law Review

This Article studies the evolution of the scholarly subfield referred to as the law of “international business transactions” (IBT). It reviews data on academic articles, courses, textbooks and other signifiers of the growth of this research area. Beginning around 1960, scholars began to use the term “international business transactions” and by the 1980s, several law schools were offering a course by that title. A handful of dedicated textbooks soon followed. These data reflect a gradual increase in research on the topic of IBT, particularly in the United States, but also considerable diversity of subject matters covered by those works. The …

Resilient Dispute Resolution Systems For International Energy Conflicts, Guillermo J. Garcia Sanchez

Seattle University Law Review

Energy-related conflicts are on the rise, spanning diverse issues such as the impacts of rare mineral mining on local communities, the impacts of sanctions on energy investments due to the Russia-Ukraine war, and the impacts of expanded subsidies on the electric vehicle and solar panel industries. Increasingly, companies, communities, and governments are clashing over the challenges of pursuing disparate and sometimes competing energy policies. This Article argues that dispute resolution mechanisms in the energy investment sector must be fundamentally rethought. Traditional semi-adjudicatory models, which focus on winners and losers, fail to accommodate the complex and multifaceted nature of contemporary energy …

Restricting Data Flows Is A Sign Of Weakness, Nikolas Guggenberger

Seattle University Law Review

There has been a seismic shift in American attitudes toward the free flow of data across borders.  In less than a decade, the United States has transitioned from condemning barriers to digital trade to constructing a digital fortress of its own. It passed legislation requiring TikTok’s parent company to divest its U.S. operations or face a nationwide ban affecting 170 million U.S. users, citing national security concerns about its ties to China and the potential for data surveillance and content manipulation. Upon legal challenge by TikTok on First Amendment grounds, the Supreme Court affirmed the ban’s constitutionality. Recent federal legislation …

Product Nationality And Corporate Identity, Trang (Mae) Nguyen

Seattle University Law Review

Global supply chains have long depended on a deceptively technical device: the attribution of a “nationality” to goods. A trade law principle, rules of origin assign products an “economic passport” that governs how they are treated at the border, including what markets they may enter and which tariff rates apply. In recent years, however, product nationality has taken on a new and far more ambitious role. As U.S. trade policy increasingly intersects with national security and human rights policy, policymakers rely on nationality-based measures to police supply chain linkages, curb geopolitical issues, and discipline firms for their links to forced …

Global Supply Chain Resilience In Emerging Technologies: A Case Study Of Bitcoin Mining, Kishanthi Parella, Carla L. Reyes

Seattle University Law Review

The United States has put into motion bold plans in critical and emerging technologies to bolster its national and economic security.  For example, the federal government created a national bitcoin strategic reserve and a stockpile of other cryptocurrency; while several states have committed to or are considering similar goals.  However, the security of these reserves is dependent on two types of supply chains within the Bitcoin mining industry: analogue supply chains, relating to the physical components needed for Bitcoin mining, and data supply chains, relating to the complex and layered logistical network of actors that create input into the software …

Third-Party Funding: Balancing Transparency, National Security, And Access To Justice, Victoria Shannon Sahani

Seattle University Law Review

Many lawmakers who have recently become aware of the multi-billion-dollar global third-party funding industry are raising new national security concerns that further complicate preexisting, longstanding debates about transparency, disclosure, access to justice, and the best way to regulate third-party funding. In response, this Article briefly asserts three main points relating to the question of how best to regulate third-party funding. First, this Article explains the third-party funding industry, including its global regulatory landscape and how it serves three distinct populations: consumers, businesses, and law firms. Second, this Article explains that third-party funding is one tool that can help expand access …

Kim Gyeong-Seok And The Origins Of Northeast Asia’S Corporate Accountability Movement For War And Colonialism, Timothy Webster

Seattle University Law Review

For the past three decades, a transnational reparations movement has unfolded across Northeast Asia. Hundreds of victims—assisted by attorneys, academics, and activists—seek remedies from Japan for various atrocities committed during World War II, colonialism, and other historical injustices.  They press their claims in street protests, legislative hearings, dramatic performances, and other fora.  The “comfort women” are the best known of these claimants; their global redress campaign ex-tends from noisy protests outside of Japan’s embassy in Seoul, to mute statues in raucous boroughs of Berlin.  More obscure, though larger in number, were the roughly one million Koreans who performed forced labor …

Reporting Materiality Under The Sec Cybersecurity Disclosure Rules: How Corporate Boards Balance Duty And Risk For Cyber Threats And Incidents, Deborah Slattery-Pereira

American University Business Law Review

The Security Exchange Commission’s (SEC) cybersecurity rules require that public companies disclose a material cyber threat or incident and the impact of the incident on the company’s business Corporate boards must disclose any cyber-related information that would affect a reasonable shareholder’s investment decisions. These rules delegate to the corporate board and management the decision of which cybersecurity events qualify as material to investors. Directors and officers must also decide when and how to disclose to the SEC, and what information to report.

The SEC Cybersecurity Rules increase compliance and litigation costs for public companies, as shareholders can use this information …

Re-Examining U.S. Bailouts In The Digital Era: Moral Hazard And Adverse Consequences, Joel Slawotsky

American University Business Law Review

Financial institutional bailouts have become the new normal in recent decades. From the savings and loan crisis, to the sub-prime, to SVB and Signature, the U.S. government and regulators have decided that the failure to protect depositors and investors could lead to bank runs, a destabilized banking sector, and ultimately economic turmoil inflicting tremendous monetary and social costs on citizens. However, the mainstreaming of bailouts has led to moral hazard, i.e., the expectation among all stakeholders including financial institutions, investors, creditors, and regulators, that a government rescue is inevitable. The problem of moral hazard is the creation of incentives to …

Incentivized Delegation In Corporate Criminal Investigations: State Action, Unconstitutional Conditions, And Fifth Amendment Erosion., Ying Zhou

American University Business Law Review

This Article identifies and critiques “incentivized delegation,” an enforcement regime in which the Department of Justice (DOJ) conditions prosecutorial leniency on corporations’ completion of specified, prosecution-oriented, internal investigations of employee misconduct. While courts readily find state action when the government formally delegates investigative functions, they have not squarely addressed whether corporate investigations undertaken to secure prosecutorial leniency—without explicit governmental direction—should likewise trigger state-action scrutiny. United States v. Coburn illustrates the blind spot: by insisting that state action requires overt governmental direction and control, the decision exposes a fundamental failure to appreciate how the government can embed investigative mandates within the …

Scrappy Or Strategic? Law Firm Decision-Making In Light Of Executive Orders, Nancy B. Rapoport

Emory Business Law Review

Some of President Donald J. Trump’s early 2025 Executive Orders targeted specific law firms.  These Executive Orders have created a stir within our legal community.  Why did some firms fight those Executive Orders and other firms agree to quick settlements with the Trump administration?  In this article, I use some rudimentary concepts taken from game theory (as in, “I won’t use numbers or mathematical proofs,” so I expect actual game theorists to roll their eyes at my analysis) to analyze two games:  the game of “who within the firm will decide whether to fight or settle” and the game of …

Pharmaceutical-Telehealth Confederacies, Michelle Onder, Michael S. Sinha

Emory Business Law Review

Access to prescription pharmaceuticals has historically been controlled by a physician’s pen. As a result, pharmaceutical companies spend billions of dollars on advertising and promotion to mitigate this barrier: first and primarily, to physicians and other prescribers, and more recently, to the general public through direct-to-consumer advertising. The success of these promotional efforts can be seen in the greater prescribing of costly brand-name medicines, even in settings where lower-priced, comparably efficacious generic alternatives exist. Brand-name prescriptions now make up only 10% of all prescriptions written yet account for 88% of drug spending. Despite these substantial returns on investment, companies continue …

Fallen Unicorns, Xuan-Thao Nguyen

Emory Business Law Review

Tech unicorns, from healthcare, teledentistry, space, ecommerce, trucking logistics, pre-owned cars, wearables, design, image search, to home-building sectors, receive effusive praises and secure enviable venture capital investments. Very soon after garnering notoriety, these unicorns die. This Article theorizes why unicorns suddenly collapse shortly after they have achieved the mythical status of being the rare tech startups with valuations of one billion dollars or more. With an in-depth case study of fallen unicorns, the Article identifies and examines the reasons for their tragic deaths, offering a critique of the fear of missing out (FOMO), overfunding, and irrational exuberance investors heaped on …

How To Evaluate Non-Majority Control: What History And Statutes Tell Us—Part Ii: The Definitional Consensus, J. Travis Laster

Fordham Journal of Corporate & Financial Law

This Article and a companion piece explore the claim that the functional school was novel and anomalous. The companion article examines the approaches that courts have historically taken when evaluating non-majority control (the “Historical Article”). The Historical Article demonstrates that functionalism has been the dominant approach since at least 1912, while the formal school is a recent innovation. Its tenets emerged in 2006 and coalesced in a recognizable framework around 2014. The Historical Article identifies the core claims of the two schools. 

This Article examines statutory definitions of control. It focuses on statutory regimes that use the concept of control …

Esg Is Not Libertarian: A Response To Jonathan Macey, Allen Mendenhall, Daniel Sutter

Emory Business Law Review

Investing, like any market activity, is voluntary. Investors may invest however they wish, whether to maximize returns, minimize risk, or support what they view as good causes. Is the current Environmental, Social and Governance (ESG) movement a libertarian embrace of socially responsible investing, as Jonathan Macey has argued? We answer with a definite no for several reasons. Government policies impel much ESG investment, most prominently through clean energy transition and financial regulations. Most ESG investment dollars stem not from investor decisions but from potential opportunism by managers of public pensions and sovereign wealth funds. Much investor activism for ESG results …

Oppression On The Blockchain, Erwin J. Kwok, Moin A. Yahya

Emory Business Law Review

When Ethereum (ETH) shifted from a Proof of Work (PoW) protocol to a Proof of Stake (PoS) protocol, not all users were enthused. We use Ethereum’s shift from PoW to PoS as a case study for the broader question of whether developers of a blockchain owe its members certain fiduciary or fiduciary-like duties. We argue that if done properly, in accordance to the rules governing the blockchain, then developers do not necessarily owe fiduciary responsibility to other members of the chain, but they nonetheless may owe fiduciary-like responsibilities to users inadvertently and negatively impacted. We argue these users may be …

Justice On Trial: Integrating Ethics In Law School Advocacy Courses, Veronica J. Finkelstein

Emory Business Law Review

The rule of law depends not only on legal doctrine and institutional design, but on the daily ethical choices of the lawyers who operate within the adversarial system. Trial lawyers, in particular, wield extraordinary power courtroom outcomes, yet law schools too often train future advocates to perform persuasive techniques without meaningful engagement with the ethical obligations that constrain those techniques and the lawyers who wield them. This article argues that the persistent separation between trial advocacy education and legal ethics instruction leaves law students ill-prepared for the moral complexities of litigation and threatens public confidence in the justice system.

Tracing …

Summoning Firms: Promoting Democratic Stability And Economic Prosperity In Times Of Constitutional Crisis, Jon D. Michaels

Emory Business Law Review

No abstract provided.

Illiberal Democracy, Merger Regulation, And Corporate Culture, Brian Jm Quinn

Emory Business Law Review

This Essay examines how the second Trump Administration has weaponized merger regulation and regulatory approval processes as tools of corporate capture in service of democratic backsliding toward an illiberal regime. Drawing on theoretical frameworks of competitive authoritarianism and illiberal democracy, this paper demonstrates how discretionary regulatory authority combined with weakened enforcement mechanisms creates opportunities for grand corruption that systematically undermines liberal democratic institutions.

This Essay accomplishes three primary objectives. First, it establishes the essential characteristics of illiberal regimes which maintain the facade of democratic institutions while systematically skewing the political playing field through selective enforcement and regulatory capture. Second, it …

No 'Dexit': Delaware's New Statutory Corporate Law Loosens The Restrictions On Controlling Shareholder Transactions In Response To Corporate Outlash Following Tornetta V. Musk, Reid A. Manabat

Emory Business Law Review

The recent Tornetta v. Musk decisions caused upheaval in the Delaware corporate community. Throughout 2024, shareholder executives have left or threatened to leave Delaware to incorporate elsewhere in a move termed “DExit.” The threat did not go unnoticed by Delawareans and lawmakers who contemplated a two-billion-dollar loss to the state’s tax revenue. Despite the courts’ willingness to require heightened scrutiny for conflicted-controller transactions, in recent years lawmakers have lowered the bar. I argue that Delaware’s new statutory corporate law does not adequately protect minority shareholders from conflicted controllers. First, the new statutory cleansing mechanisms ignore the unique dangers of conflicted-controller …

Sustainability Assurance, Andrew F. Tuch, Luca Enriques, Alessandro Romano

Scholarship@WashULaw

A robust literature examines sustainability disclosures by public corporations, but legal scholarship has largely overlooked the role of third-party assurance—or verification—of such disclosures. This is a notable omission given the extensive literature on the auditing of financial statements, a related form of assurance.

This article responds by examining the role of assurance in sustainability reporting. In keeping with the theme of this symposium volume, it draws on US and EU law. Our discussion begins in Part I with sustainability disclosures, focusing on the requirements and practices of public companies. In Part II, we introduce sustainability assurance as well as assurance …

Flows, Financing Decisions, And Institutional Ownership Of The U.S. Equity Market, Alon Brav, Dorothy S. Lund, Lin Zhao

Faculty Scholarship

This Article analyzes the relationship between flows to institutional investment managers, corporate financing decisions, and institutional ownership of U.S. public equity. In so doing, it provides new evidence about the drivers of institutional investor growth in equity ownership over the past two decades. Contrary to conventional narrative, we find that equity capital flows into the “Big Three” investment managers have slowed in recent years, with substantial differences between each institution. We also present a framework to understand how fund characteristics and corporate actions such as stock buybacks and equity issuances combine to shape the evolution of institutional ownership, including that …

"Activist" Versus "Passive" Investors: A Closer Look At Proxy Contests And The Contemporary Balance Of Advantage, John C. Coffee Jr.

Faculty Scholarship

The era of the hostile takeover has clearly given way to the era of the proxy contest led by an activist hedge fund. Today, a record number of such contests are underway, and they have changed the board composition at many U.S. companies and caused a record number of CEO resignations. But there is a mystery here: when activist funds negotiate for changes with target managements, they often obtain meaningful changes in the board of directors and corporate policies. However, when activists attempt a proxy contest, they have generally been unsuccessful, winning only a small number of seats in a …

Trophy Assets, Aneil Kovvali

Articles

Rich people like to own things that make them look cool. When the thing in question is a car, house, or boat, the implications are limited. But sometimes very rich people own assets that are more important. Within media, Elon Musk acquired Twitter, Jeff Bezos ac-quired the Washington Post, and Patrick Soon-Shiong acquired the Los Angeles Times. There has also been a craze for aerospace: Musk with Space X, Bezos with Blue Origin, Richard Branson with Virgin Galactic, and going back further, Howard Hughes with Hughes Aircraft Company. It is often difficult to understand the behavior in purely finan-cial terms, …