Securities Law Commons^™

Political Uncertainty And The Market For Ipos, Jay B. Kesten, Murat C. Mungan

Scholarly Publications

No abstract provided.

Anticipating A Sea Change For Insider Trading Law: From Trading Plan Crisis To Rational Reform, John P. Anderson

Utah Law Review

The Securities and Exchange Commission is poised to take action in the face of compelling evidence that corporate insiders are availing themselves of rule-sanctioned Trading Plans to beat the market. These Trading Plans allow insiders to trade while aware of material nonpublic information. Since the market advantage insiders have enjoyed from Plan trading can be traced to loopholes in the current regulatory scheme, increased enforcement of the existing rules cannot address the issue. But, simply tweaking the existing rule structure to close these loopholes would not work either. This is because the SEC adopted the current rule as a part …

A Corporation’S Securities Litigation Gambit: Fee-Shifting Provisions That Defend Against Fraud-On-The-Market, Steven W. Lippman

Law Student Publications

This comment lays out a framework that should allow corporations to strategically defend themselves against frivolous and meritless 10b-5 class action suits invoking Basic's Fraude-on-the-Market ("FOM") presumption of reliance. Part I of this comment discusses the current landscape of securities class action litigation. It explains how and why the suits are initiated and discusses the outcome of Halliburton Co. v. Erica P. John Fund, Inc. (Halliburton II). Part II discusses the framework for the proposition of this comment. It provides a brief history of significant cases and incorporates several recent cases that have opened the door to the possibility of …

The Financial Action Task Force: International Regulatory Convergence Through Soft Law, Nicholas W. Turner

NYLS Law Review

No abstract provided.

Halliburton Ii: It All Depends On What Defendants Need To Show To Establish No Impact On Price, Merritt B. Fox

Faculty Scholarship

Rule 1Ob-5 private damages actions cannot proceed on a class basis unless the plaintiffs are entitled to the fraud-on-the-market presumption of reliance. In Halliburton II, the Supreme Court provides defendants with an opportunity, before class certification, to rebut the fraud-on-the-market presumption through evidece that the misstatement had no effect on the issuer's share price. It left unspecified, however, the standard by which the sufficiency of this evidence should be judged.

This Article explores the two most plausible approaches to setting this standard. One approach would be to impose the same statistical burden on defendants seeking to show there was …

Lawyer Ethics And The Financial Action Task Force: A Call To Action, Jack P. Sahl

NYLS Law Review

No abstract provided.

What Happened To The American Dream - An Analysis Of The Dodd-Frank Wall Street Reform And Consumer Protection Act And Its Effect On Home Ownership., Nathan Torok, Mark Torok

The Scholar: St. Mary's Law Review on Race and Social Justice

Abstract Forthcoming.

Halliburton And The Dog That Didn't Bark, Ann Lipton

Publications

In Halliburton Co. v. Erica P. John Fund, Inc., the Supreme Court held that defendants in a Section 10(b) class action may use the class-certification process to rebut the "fraud on the market" presumption that their misstatements impacted the price of the relevant security. In so doing, the Court struggled to explain why the class-certification process—rather than trial on the merits—was the proper venue for such disputes, and avoided the most obvious justification, namely, that in the absence of price impact, plaintiffs would still be able to bring individual claims. The Court's unwillingness to hold that plaintiffs may bring …

Wells Fargo V. Erobobo: Mortgage-Backed Securities Of The 2000s, Alex Luxenburg

NYLS Law Review

No abstract provided.

The Financial Action Task Force And The Legal Profession, Duncan E. Osborne

NYLS Law Review

No abstract provided.

The Role Of Lawyers In Combating Money Laundering And Terrorist Financing: Lessons From The English Approach, John A. Terrill Ii, Michael A. Breslow

NYLS Law Review

No abstract provided.

U.S. Legal Profession Efforts To Combat Money Laundering And Terrorist Financing, Laurel S. Terry

NYLS Law Review

No abstract provided.

Compliance Convergence In Fatf Rulemaking: The Conflict Between Agency Capture And Soft Law, Dr. Saby Ghoshray

NYLS Law Review

No abstract provided.

Kicking The Can Down The Road: Dodd-Frank’S Attempted Reform On Broker-Dealers, Helen Quigley

NYLS Law Review

No abstract provided.

Keep Securities Reform Moving: Eliminate The Sec's Integration Doctrine, Stuart R. Cohn

Hofstra Law Review

Small and developing companies raising capital under the federal securities laws often face the considerable barrier imposed by the SEC's integration doctrine. Despite recent reforms in registration exemptions the integration doctrine has remained untouched and continues to be a significant problem for many companies needing multiple infusions of capital. This article examines and recommends that the integration doctrine be eliminated nearly in its entirety.

Superstar Judges As Entrepreneurs: The Untold Story Of Fraud-On-The-Market, Margaret V. Sachs

Scholarly Works

This Article unites two disparate subjects of profound interest to legal scholars. One is fraud-on-the-market, reaffirmed late last term in Erica P. John Fund, Inc. v. Halliburton Co. (Halliburton II). Probably the most important claim in the securities litigation universe, fraud-on-the-market is the sine qua non of almost every securities class action that is filed. The other subject consists of the work of Judges Frank Easterbrook and Richard Posner, the “superstars” of the current federal appellate bench.

My purpose is several-fold: first, to show that fraud-on-the-market’s evolution, up through and culminating in Halliburton II, has been driven in significant measure …

Banker Loyalty In Mergers And Acquisitions, Andrew F. Tuch

Scholarship@WashULaw

When investment banks advise on merger and acquisition (M&A) transactions, are they fiduciaries of their clients, gatekeepers for investors, or simply arm’s-length counterparties with no other-regarding duties? Scholars have generally treated M&A advisors as arm’s-length counterparties, putting faith in the power of contract law and market constraints to discipline errant bank behavior. This Article counters that view, arguing that investment banks are rightly characterized as fiduciaries of their M&A clients and thus required to loyally serve client interests.

This Article also develops an analytical framework for assessing the liability rules that will most effectively deter disloyalty on the part of …

The New Financial Order: An Essay For Alan Bromberg - Tributes To Professor Alan R. Bromberg, Joel Seligman

Scholarship@WashULaw

In the aftermath of the 2008-2009 financial crisis, I characterized its causes broadly:

First, there was an ongoing economic emergency, initially rooted in the housing and credit markets, which has been succeeded by the collapse of several leading investment and commercial banks and insurance companies, dramatic deterioration of stock market indices, and a rapidly deepening recession.

Second, there were serious breakdowns in the enforcement and fraud deterrence missions of federal financial regulation, notably as illustrated by matters involving Bear Stearns and the other four then independent investment banks subject to the SEC's former Consolidated Supervised Entities program, the government creation …

Is The Price Right? An Empirical Study Of Fee-Setting In Securities Class Actions, Michael A. Perino, Lynn A. Baker, Charles Silver

Faculty Publications

Every year, fee awards enable millions of people to obtain access to justice and strengthen the deterrent effect of the law by motivating lawyers to handle class actions. But little research exists on why judges award the amounts they do or whether they size fee awards correctly. The process remains a black box. Through a detailed study of 431 securities class actions that settled in federal district courts from 2007 through 2012, this Article presents the first empirical study to peer inside that black box. In contrast to prior analyses, this study relies on the actual court filings in each …

Major Investor Losses Due To Conflicted Advice: Brokerage Industry Advertising Creates The Illusion Of A Fiduciary Duty, Joseph C. Peiffer, Christine Lazaro

Faculty Publications

(Excerpt)

No national standard exists today requiring brokerage firms to put their clients’ interests first by avoiding making profits from conflicted advice. In the five years since the passage of the Dodd Frank Act, inaction by the Securities and Exchange Commission (SEC) on a fiduciary standard has cost American investors nearly $80 billion, based on estimated losses of $17 billion per year.

Amid encouraging recent signs of possible action from the Department of Labor and the SEC, there is a compelling case to be made for a ban on conflicted advice in order to protect investors. In the absence of …

Suitability Obligations Applicable To Securities And Annuities, Christine Lazaro, Benjamin P. Edwards

Faculty Publications

(Excerpt)

Brokers are subject to different regulatory obligations depending on the type of product being recommended to a customer. Generally, brokers are subjected to overlapping oversight and are regulated at both the federal and state level. This oversight becomes even further complicated when a broker sells a product that spans multiple regulatory schemes such as certain annuities, which may be both insurance and securities products.

This article describes a broker’s suitability obligations under the new suitability rule when making recommendations which are covered by that rule. Next, it describes the additional obligations that a broker has when making a recommendation …

Introduction: Data Breaches: Moving Forward, Practically, Cindy E. Zuniga

Cardozo Law Review de•novo

Cardozo Law Review de•novo’s online symposium: Data Breaches: Moving Forward, Practically focuses on proactive steps that policymakers, regulators, the judiciary, and businesses can take to address the array of issues arising from data breaches. The online symposium features articles from Lauren Henry, Adam Lamparello, Peter Yu, and David Thaw.

Where Do We Fight?: A Way To Resolve The Conflict Between A Forum Selection Clause And Finra Arbitration Rule 12200, Suleman Malik

Cardozo Journal of Conflict Resolution

First, Section II summarizes the historical background of the dispute between Goldman Sachs & Co. ("Goldman Sachs") and Golden Empire Schools Financing Authority ("Golden Empire"). Second, Section II identifies the forum selection and merger clauses from the 2004 Broker-Dealer Agreement at issue in Golden Empire. Third, Section II provides a brief background of FINRA and its rules and regulations most pertinent to this dispute, mainly FINRA Rule 12200. Fourth, Section II discusses the emerging circuit split and explains the holdings from each of the circuits. As discussed more fully below, Golden Empire marks a growing circuit split over the availability …

Blockchain: A Proposal To Reform High Frequency Trading Regulation, Christina Batog

Cardozo Arts & Entertainment Law Journal

No abstract provided.

Liquidity, Systemic Risk, And The Bankruptcy Treatment Of Financial Contracts, Rizwaan J. Mokal

Brooklyn Journal of Corporate, Financial & Commercial Law

No abstract provided.

Form Vs. Function In Rule 10b-5 Class Actions, Amanda M. Rose

Vanderbilt Law School Faculty Publications

The Supreme Court’s widely anticipated decision last term in Halliburton Co. v. Erica P. John Fund, Inc. did little to change the fundamental landscape of securities fraud litigation in the United States. Rule 10b-5 class actions premised on the “fraud-on-the-market” presumption of reliance may still be brought, although it is now clear that defendants may present evidence of lack of price distortion to rebut that presumption at the class certification stage. Halliburton does, however, raise a variety of new questions that will keep plaintiffs’ lawyers and defense counsel fighting for years to come. Determining the answers to these questions will …

Slouching Towards Monell: The Disappearance Of Vicarious Liability Under Section 10(B), Ann Lipton

Publications

Liability under section 10(b) of the Securities Exchange Act is one of the primary mechanisms for enforcing the federal securities laws. Section 10(b), however, prohibits only intentional or reckless deception, and there has never been consensus as to how to determine whether an organization, rather than a natural person, harbors the relevant mens rea. Traditionally, organizational liability under federal law is determined according to agency principles, and most courts pay lip service to the notion that agency principles govern under section 10(b). As this Article demonstrates, they do not.

Many section 10(b) actions involve "open-market" frauds, whereby the allegedly fraudulent …

Shareholder Litigation Without Class Actions, David H. Webber

Faculty Scholarship

In this Article, I imagine a post-class action landscape for shareholder litigation. Assuming, for the sake of this exercise, an environment in which both securities-fraud and transactional class actions are hobbled by procedural or substantive reforms — most likely through the adoption of mandatory-arbitration provisions or fee-shifting provisions — I assess what shareholder litigation would disappear, what would remain, and what a post-class action landscape would look like. I argue that loss of the class action would remove a layer of legal insulation that prevents institutional investors from having to pursue positive value claims against companies. Currently, the class action …

Intellectual Property Securitization, Dov Solomon, Miriam Bitton

Cardozo Arts & Entertainment Law Journal

This Article aims to explore the securitization of intellectual property [hereinafter "IP"], introducing the promise of said financing method in the growing field of IP. In recent years, IP has become a major component of developed economics. Raising funds for research, development, and the creation of new inventions and works of authorship has never been an easy task. This Article, therefore, presents a review of securitization in the field of IP and in doing so makes a few major contributions. It offers a thorough discussion of securitization, its benefits, and its prominence over more traditional methods of financing, such as …

Locked In: The Competitive Disadvantage Of Citizen Shareholders, Anne M. Tucker

Scholarly Works

Indirect investors—especially mutual fund investors—are often low-dollar, low-incentive, rationally apathetic investors facing enormous information asymmetries and collective action problems. These traits raise difficult corporate governance questions about how indirect investors exercise or should exercise their right to vote in fund elections, obtain fund-related information, and pursue litigation against the fund. These questions are all the more important in light of how many indirect investors own mutual funds through employer-sponsored defined contribution retirement plans.

John Morley and Quinn Curtis’s 2010 article, Taking Exit Rights Seriously, offers a clear answer to this problem. They assert that the best solution for all mutual …