Securities Law Commons^™

Let The Securities And Exchange Commission Outsource Enforcement By Litigation: A Proposal, Tamar Frankel

Faculty Scholarship

The stories of Stanford's suspected Ponzi scheme, and Madoff s proven scheme, as well as the Securities and Exchange Commission's lenient settlements with very large suspected violators, and its focus on the numerous, small accused, have raised questions about the Commission's enforcement resources. This Article suggests that the Commission outsource civil cases against very large defendants when the examination of the defendant finds signs of wrongdoing under the securities acts. The Commission already outsources two types of legal services and the United States government practices extensive outsourcing. This article suggests that with appropriate limitations and controls outsourcing of enforcement litigation …

Flawed Assumptions: A Corporate Law Analysis Of Free Speech And Corporate Personhood In Citizens United, Anne M. Tucker

Scholarly Works

No abstract provided.

Corporate Reform As A Credence Service, Omari Scott Simmons

Journal of Business & Technology Law

No abstract provided.

The Road Not Taken: Rethinking Securities Regulation And The Case For Federal Merit Review, Daniel J. Morrissey

University of Richmond Law Review

No abstract provided.

Lowering The Cost Of Rent: How Ifrs And The Convergence Of Corporate Governance Standards Can Help Foreign Issuers Raise Capital In The United States And Abroad, Kyle W. Pine

Northwestern Journal of International Law & Business

Since the early 1990s the United States has experienced a dramatic growth in the number of foreign firms choosing to trade their shares in U.S. markets. Meanwhile, Europe and other markets have not experienced this effect to the same extent. there has been an observable worldwide growth in stock market capitalization since the 1990s with an increasing number of foreign issuers choosing to cross-list their shares abroad, usually in the United States. Traditional explanations for why firms choose to cross-list have focused primarily on access to trade in more liquid markets. A more convincing theory for why firms cross-list, attributed …

Pleading A Loss Cause: Resolving The Pleading Standard For The Element Of Loss Causation In A Private Securities Fraud Claim And A Plaintiff's Heavy Burden Pleading It Under Iqbal, Jason N. Haycock

American University Law Review

No abstract provided.

Reading Stoneridge Carefully: A Duty-Based Approach To Reliance And Third Party Liability Under Rule 10b-5, Donald C. Langevoort

Georgetown Law Faculty Publications and Other Works

The Supreme Court's decision in the Stoneridge case has largely been interpreted as a imposing a strict, pro-defendant reliance requirement. This article offers an alternative reading that takes the Court's analysis more seriously than its overheated dicta, one that makes "remoteness" a serious and meaningful inquiry that can produce balanced and fair responses to the concern that seemed to motivate the search for restraint: fear of disproportionate liability. It explores the nature of the dispropotion, and suggests ways--using the Court's own explanatory tools--for deciding when third party involvement is close enough to the fraud so that fear of disproportion lessens. …

The Use Of Mortgage-Backed Securities In International Comparative Perspective: Lessons And Insights, Csaba Rusznak

Vanderbilt Journal of Transnational Law

The secondary mortgage market in the United States has helped millions of people purchase homes over the past half century. Following the burst of the real estate bubble and the credit crisis, it is important for American policymakers not to lose sight of the importance that the secondary mortgage market has played in increasing home ownership. The financial engineering in the form of securitization that led to the success of the secondary mortgage market needs to be preserved, although it should also be reworked so that the externalization of unappreciated risk is reduced and the possibility of a large-scale financial …

Greater Mutual Fund Transparency In India, Stephen P. Smith

Vanderbilt Journal of Transnational Law

India has been one of the darlings among emerging market economies over the past decade. It has experienced dizzying economic growth that has lifted great numbers of Indians out of poverty and changed the economic outlook of much of its populace. For the first time, many Indians have excess funds to save or invest, and the Indian mutual fund industry has enjoyed an explosion in popularity as a result of this economic boom, particularly among first time mutual fund investors.

One of the most important mechanisms for investor protection in any capital market is the provision of information to investors …

Freeze-Outs: Transcontinental Analysis And Reform Proposals, Marco Ventoruzzo

Faculty Scholarship

One of the most crucial, but systematically neglected, comparative differences between corporate law systems in Europe and in the United States concerns the regulations governing freeze-out transactions in listed corporations. Freeze-outs can be defined as transactions in which the controlling shareholder exercises a legal right to buy out the shares of the minority, and consequently delists the corporation and brings it private. Beyond this essential definition, the systems diverge profoundly.

This gap exists despite the fact that minority freeze-outs are one of the most debated issues in corporate law, in the public media, in a vast body of scholarly work …

Guilty By Association? Regulating Credit Default Swaps, Houman B. Shadab

Articles & Chapters

A wide range of U.S. policymakers initiated a series of actions in 2008 and 2009 to bring greater regulation and oversight to credit default swaps (CDSs) and other over-the-counter derivatives. The policymakers’ stated motivations echoed widely expressed criticisms of the regulation, characteristics, and practices of the CDS market, and focused on the risks of the instruments and the lack of public transparency over their utilization and execution. Certainly, the misuse of certain CDSs enabled mortgage-related security risk to become overconcentrated in some financial institutions.

Yet as the analysis in this Article suggests, failing to distinguish between CDS derivatives and the …

Personal Jurisdiction Over Foreign Directors In Cross-Border Securities Litigation, Hannah L. Buxbaum

Articles by Maurer Faculty

No abstract provided.

Is The Pcaob A "Heavily Controlled Component" Of The Sec?: An Essential Question In The Constitutional Controversy, Donna M. Nagy

Articles by Maurer Faculty

The U.S. Supreme Court recently heard oral arguments in Free Enterprise Fund v. Public Company Accounting Oversight Board, described by D.C. Circuit Judge Brett Kavanaugh as “the most important separation-of-powers case regarding the President’s appointment and removal powers to reach the courts in the last 20 years.” Established by Congress as the cornerstone of the Sarbanes-Oxley Act of 2002, the PCAOB was structured as a strong, independent board in the private sector, to oversee the conduct of auditors of public companies.

This Article challenges the D.C. Circuit’s depiction of the PCAOB as “a heavily controlled component” of the SEC, and …

Fiduciaries With Conflicting Obligations, Steven L. Schwarcz

Faculty Scholarship

This Article examines the dilemma of a fiduciary acting for parties who, as among themselves, have conflicting commercial interests - an inquiry fundamentally different from that of the traditional study of conflicts between fiduciaries and their beneficiaries. Existing legal principles do not fully capture this dilemma because agency law focuses primarily on an agent’s duty to a given principal, not on conflicts among principals; trust law focuses primarily on gratuitous transfers; and commercial law generally addresses arm’s length, not fiduciary, relationships. The dilemma has become critically important, however, as defaults increase in the multitude of conflicting securities (e.g., classes of …

Lying And Getting Caught: An Empirical Study Of The Effect Of Securities Class Action Settlements On Targeted Firms, James D. Cox, Lynn Bai, Randall S. Thomas

Faculty Scholarship

The ongoing Great Recession has triggered numerous proposals to improve the regulation of financial markets and, most importantly, the regulation of organizations such as credit rating agencies, underwriters, hedge funds, and banks, whose behavior is believed to have caused the credit crisis that spawned the economic collapse. Not surprisingly, some of the reform efforts seek to strengthen the use of private litigation. Private suits have long been championed as a necessary mechanism not only to compensate investors for harms they suffer from financial frauds but also to enhance deterrence of wrongdoing. However, in recent years there has been a chorus …

Distorting Legal Principles, Steven L. Schwarcz

Faculty Scholarship

Legal principles enable society to order itself by preserving broadly based expectations. Sometimes, however, parties transact in ways that are so inconsistent with generally accepted principles as to create uncertainty or confusion that undermines the basis for reasoning afforded by the principles. Such a distortion might occur, for example, if a normally mandatory legal rule were unexpectedly treated as a default rule. This article explores the problem of distorting legal principles, initially focusing on rehypothecation, a distortion whose uncertainty and confusion contributed to the downfall of Lehman Brothers and the resulting global financial crisis. But not all distortions are, on …

The Market Reaction To Legal Shocks And Their Antidotes: Lessons From The Sovereign Debt Market, Michael Bradley, James D. Cox, Mitu Gulati

Faculty Scholarship

In October 2000 a hedge fund holding an unpaid debt claim won an enormous victory against the debtor, the Republic of Peru, through an opportunistic interpretation of the common pari passu clause by a Brussels court. This development was met by charges from policy makers and practitioners that the court's decision (its novel interpretation of the pari passu clause) would lead to a dramatic increase in the risks of holdout litigation faced by sovereign debtors. Over the ensuing years, multiple reform solutions were proposed including the revision of certain contractual terms, the filing of amicus briefs in a key case, …

Fending For Themselves: Why Securities Regulations Should Encourage Angel Groups, Abraham J. B. Cable

Faculty Scholarship

No abstract provided.

In Praise Of Process: Examining The Sec, Rule 14a-8(I)(8), And Afscme V. Aig, Jena Martin

Faculty Articles

Part one of this essay will discuss the rule, including a brief analysis of proxy access generally and the "election exclusion" specifically. Part two will examine the AFSCME v. AIG case and the SEC's response thereto in more detail-discussing the arguments posited both for and against increased shareholder access, as well as the aftermath of the SEC's decision. Part three will analyze how the SEC's failure to change Rule 14a-8(i)(8) to allow greater shareholder access specifically caused one thread in the financial crisis-as a direct result of a loss of shareholder empowerment. Finally, part four offers an epilogue-a discussion of …