Securities Law Commons^™

Redesigning The Sec: Does The Treasury Have A Better Idea?, John C. Coffee Jr., Hillary A. Sale

Faculty Scholarship

Symposiums supply a snapshot in time. By observing the common assumptions and shared frameworks of a collection of scholars writing contemporaneously, one gains both insight into the intellectual world of a past era and the ability to measure its distance from our own. Twenty-five years ago the Virginia Law Review organized a noted symposium (the "1984 Symposium") to celebrate the 50th anniversary of the SEC. A number of prominent scholars participated, and its articles have been much cited.

Enhancing Investor Protection And The Regulation Of Securities Markets, John C. Coffee Jr.

Faculty Scholarship

This is the congressional testimony of Professor John C. Coffee, Jr., before the United States Senate Committee on Banking, Housing and Urban Affairs, March 10, 2009.

The Hardening Of Soft Law In Securities Regulation, Roberta S. Karmel, Claire Kelly

Faculty Scholarship

No abstract provided.

The Future Of The Securities And Exchange Commission As A Market Regulator, Roberta S. Karmel

Faculty Scholarship

No abstract provided.

The Future Of Securitization, Steven L. Schwarcz

Faculty Scholarship

Securitization, a process in which firms can raise low-cost financing by efficiently allocating asset risks with investor appetite for risk, has been one of the most dominant and fastest-growing means of capital formation in the United States and the world. The subprime financial crisis, however, has revealed certain defects with how securitization is sometimes utilized. This article examines these defects and the extent they can, and should, be remedied going forward.

Short Selling And The News: A Preliminary Report On Empirical Study, Merritt B. Fox, Lawrence R. Glosten, Paul C. Tetlock

Faculty Scholarship

No subject in securities regulation has generated more heat and less light than short selling. A short sale is the sale of a share that is borrowed from a third party rather than owned by the seller. At a later time, the short seller extinguishes her obligation to this third party by “covering” – purchasing an identical share in the market and then returning it to the third party. If the share price drops, the cost of covering will be less than the proceeds received earlier from the sale and the short seller will make money. Politicians and CEOs rail …

Initial Public Offerings And The Failed Promise Of Disintermediation, A. Christine Hurt

Faculty Scholarship

No abstract provided.

Should Securities Industry Self-Regulatory Organizations Be Considered Government Agencies?, Roberta S. Karmel

Faculty Scholarship

No abstract provided.

Should Securities Industry Self-Regulatory Organizations Be Considered Government Agencies?, Roberta S. Karmel

Faculty Scholarship

No abstract provided.

The Eu Challenge To The Sec, Roberta S. Karmel

Faculty Scholarship

No abstract provided.

The Eu Challenge To The Sec, Roberta S. Karmel

Faculty Scholarship

No abstract provided.

Regulation By Exemption: The Changing Definition Of An Accredited Investor, Roberta S. Karmel

Faculty Scholarship

No abstract provided.

Regulation By Exemption: The Changing Definition Of An Accredited Investor, Roberta S. Karmel

Faculty Scholarship

No abstract provided.

A Structural Critique Of Trader Taxation, Shu-Yi Oei

Faculty Scholarship

This article scrutinizes the structural elements underlying the unusual tax treatment of securities traders under current law. After summarizing the distinguishing features of trader taxation, this article explains how the treatment of securities traders today has occurred due to a long-standing, legislatively created disjuncture at the point where the “to customers” requirement in the capital asset rules (i.e., the requirement that traders must sell “to customers” in order to escape capital asset classification and court findings that they do not) and the “trade or business” concept intersect. The article reviews some of the traditional critiques that have been levied against …

Markets, Systemic Risk, And The Subprime Mortgage Crisis, Steven L. Schwarcz

Faculty Scholarship

The recent subprime mortgage meltdown is undermining financial market stability and has the potential to cause a true systemic breakdown, collapsing the world's financial systems like a row of dominoes. This essay uses the subprime crisis to demonstrate that existing protections against systemic risk, which focus on banks and largely ignore financial markets, are anachronistic and misguided. Because companies increasingly access financial markets without going through banks, an effective framework for containing systemic risk must focus on markets.

There Are Plaintiffs And … There Are Plaintiffs: An Empirical Analysis Of Securities Class Action Settlements, James D. Cox, Randall S. Thomas, Lynn Bai

Faculty Scholarship

In this paper, we examine the impact of the PSLRA and more particularly the impact the type of lead plaintiff on the size of settlements in securities fraud class actions. We thus provide insight into whether the type of plaintiff that heads the class action impacts the overall outcome of the case. Furthermore, we explore possible indicia that may explain why some suits settle for extremely small sums - small relative to the "provable losses" suffered by the class, small relative to the asset size of the defendant-company, and small relative to other settlements in our sample. This evidence bears …

Disclosure’S Failure In The Subprime Mortgage Crisis, Steven L. Schwarcz

Faculty Scholarship

This symposium article examines how disclosure, the regulatory focus of the federal securities laws, has failed to achieve transparency in the sub-prime mortgage crisis and what this failure means for modern financial securities markets.

Experimenting With The Lead Plaintiff Selection Process In Securities Class Actions: A Suggestion For Pslra Reform, Andrew S. Gold

Faculty Scholarship

No abstract provided.

Codes Of Ethics And State Fiduciary Duties: Where Is The Line?, Z. Jill Barclift

Faculty Scholarship

The important function of disclosure under federal securities laws and regulations, and the role of management in running the affairs of the corporation consistent with state fiduciary principles have a history of discord. The recent mandates of the Sarbanes-Oxley Act (“SOX Act” or “SOX”), and the Security and Exchange Commission’s (“SEC”) implementing regulations continue to increase the disclosure obligations of public companies. This article examines the implementation of code of ethics requirements under SOX. It examines the SEC’s regulations, which implement SOX requirements on the disclosure of codes of ethics, and self-regulatory agency (“SRO” or “listing agency”) rules on codes …

Reputational Sanctions In China's Securities Market, Benjamin L. Liebman, Curtis J. Milhaupt

Faculty Scholarship

Literature suggests two distinct paths to stock market development: an approach based on legal protections for investors, and an approach based on self-regulation of listed companies by stock exchanges. This Essay traces China's attempts to pursue both approaches, while focusing primarily on the role of the stock exchanges as regulators. Specifically, the Essay examines a fascinating but unstudied aspect of Chinese securities regulation – public criticism of listed companies by the Shanghai and Shenzhen exchanges. Based on both event study methodology and extensive interviews of market actors, we find that the public criticisms have significant effects on listed companies and …

Takeover Regulation As A Wolf In Sheep's Clothing: Taking U.K Rules To Continental Europe, Marco Ventoruzzo

Faculty Scholarship

Aesop was an optimist. In his cautionary fable that inspired the famous admonition about wolves in sheep's clothing, the predator intentionally dons a sheep's fleece in order to sneak up on a lamb. His disguise, it turns out, is so effective that he ends up being mistaken for the real thing and killed by another wolf. According to Aesop, even the most effective fraud can turn against its perpetrator, and justice be done. The results are not always so salutary with other clandestine predators, including legal rules that appear aimed at protecting vulnerable groups, but instead provide valuable tools to …

Accountability And Competition In Securities Class Actions: Why "Exit" Works Better Than "Voice", John C. Coffee Jr.

Faculty Scholarship

A sizable literature on class actions has long suggested that the plaintiff’s attorney is an independent entrepreneur over whom the class members have only limited control. But the analysis cannot stop here. Why does this state of affairs exist? This essay will give two connected answers to this question as a prelude to evaluating what reforms are likely to work:

(1) The rules of "litigation governance" differ diametrically from those of corporate governance. An entrepreneur seeking capital for a business venture must convince investors to "opt in" and buy the securities of the entrepreneur's start-up corporation. In contrast, a plaintiffs …

Sovereign Wealth Funds And Corporate Governance: A Minimalist Response To The New Mercantilism, Ronald J. Gilson, Curtis J. Milhaupt

Faculty Scholarship

Keynes taught years ago that international cash flows are always political. Western response to the enormous increase in the number and the assets of sovereign wealth funds (SWFs), and other government-directed investment vehicles that often get lumped together under the SWF label, proves Keynes right. To their most severe critics, SWFs are a threat to the sovereignty of the nations in whose corporations they invest. The heat of the metaphors matches the volume of the complaints. The nations whose corporations are targets of investments are said to be threatened with becoming "sharecropper" states if ownership of industry moves to foreign-government …

Of Breaches Of The Peace, Home Invasions, And Securities Fraud, A. Christine Hurt

Faculty Scholarship

No abstract provided.

When Should Investor Reliance Be Presumed In Securities Class Actions, Roberta S. Karmel

Faculty Scholarship

No abstract provided.

Is The Financial Industry Regulatory Authority A Government Agency?, Roberta S. Karmel

Faculty Scholarship

No abstract provided.

From Federal Rules To Intersystemic Governance In Securities Regulation, Robert B. Ahdieh

Faculty Scholarship

In this brief essay, prepared as part of a symposium on The New Federalism: Plural Governance in a Decentered World, I explore the regulatory dynamics at work: (1) in the operation of Securities Exchange Act Rule 14a-8, (2) in the interventions of then-Attorney General Eliot Spitzer in the national securities markets, and (3) in recent steps by the Securities and Exchange Commission to reconcile U.S. and international accounting standards. In each case, a distinct dynamic of regulatory interaction - what I term intersystemic governance - can be observed. In such cases, overlapping jurisdiction combines with various sources of interdependence to …

The Once And Future New York Stock Exchange: The Regulation Of Global Exchanges, Roberta S. Karmel

Faculty Scholarship

No abstract provided.

The Once And Future New York Stock Exchange: The Regulation Of Global Exchanges, Roberta S. Karmel

Faculty Scholarship

No abstract provided.

The Missing Link Between Insider Trading And Securities Fraud, Richard A. Booth

Faculty Scholarship

In a recent article, I argued that diversified investors - the vast majority of investors - would prefer that securities fraud class actions under the 1934 Act and Rule 10b-5 be dismissed in the absence of insider trading or similar offenses during the fraud period. See Richard A. Booth, The End of the Securities Fraud Class Action as We Know It, 4 Berk. Bus. L. J. 1 (2007), http://ssrn.com/abstract=683197. In this article, I draw on the classic case, SEC v. Texas Gulf Sulfur Company, to show that the federal courts originally viewed securities fraud as inextricably connected to insider trading …