Securities Law Commons^™

Lunch Lecture | Environmental, Social, And Governance Issues In The Hedge Fund Industry, Ronald H. Filler Institute For Financial Services Law

Ronald H. Filler Institute for Financial Services Law

April 28, 2022

Lunch Lecture | Robin Meister '86: Managing Risk In The Financial Services Industry, Ronald H. Filler Institute For Financial Services Law

Ronald H. Filler Institute for Financial Services Law

April 21, 2022

How Discretionary Decision-Making Impacts The Financial Performance And Legal Disclosures Of S&P 500 Funds, Bernard S. Sharfman, Vincent Deluard

Brooklyn Law Review

When investment funds track the S&P 500, the index becomes more than just a list of 500 companies. The focus then becomes the financial and regulatory issues that arise from the discretionary decision-making power of the Index Committee that governs the S&P 500. Based on our empirical research and analysis, this article recommends a new principal risk disclosure under SEC Form N-1A, which we refer to as “selection risk,” to be included in the statutory and summary prospectuses of investment funds that track the S&P 500. This type of risk results when the Index Committee uses its discretionary decision-making power …

A True Sense Of Security: How Kirschner V. J.P. Morgan Chase Illustrates The Failings Of The Reves Family-Resemblance Test And The Need To Recognize Some Syndicated Loans As Securities For The Sake Of The Financial System, Aidan D. Mulry

Brooklyn Law Review

Following the 2008 financial crisis, Congress implemented a number of reforms aimed at ensuring that such a man-made disaster—fueled by greed and willful ignorance—is not permitted to happen again. On the surface, these reforms appear to be a success; however, under the surface, there is currently a capital market that is effectively ignored, not only by the reforms passed in the wake of the financial crisis, but by virtually all securities regulation. This capital market, which revolves around so-called syndicated loans, is estimated to be larger than the subprime-mortgage collateralized debt obligations market was at its apex, and yet it …

Cryptocurrency: The Consequences Of A Regulatory Gap In A Rapidly Growing Industry, Claire Sanford

SLU Law Journal Online

Digital assets are largely unregulated, which has led to many investors being defrauded without remedy. Various solutions have been proposed to solve the regulatory gap, but none have been successful in practice. In this article, Claire Sanford discusses how the risks associated with cryptocurrency exchanges are distinct from more traditional investments.

Examining Stock Trading Reforms For Congress Hearing Before The U.S. House Of Representatives Committee On House Administration, Donna M. Nagy

Public Testimony by Maurer Faculty

Professor Nagy testified (text attached, video below) in support of federal legislation that would prohibit members of Congress from owning the securities of individual publicly traded companies as well as certain other investments that would likely conflict with their official duties.

It was nearly 10 years ago to the day when President Barack Obama signed the Stop Trading on Congressional Knowledge (STOCK) Act, requiring enhanced financial disclosures and creating new securities transaction reporting rules for members of Congress, certain members of their family, and their staff. The Act also made absolutely clear that a member of Congress who trades securities …

Nagy To Testify Before Congressional Committee On Stock Trading Reforms, James Owsley Boyd

Keep Up With the Latest News from the Law School (blog)

No abstract provided.

Fraud On Any Market, Gregory Day, John T. Holden, Brian M. Mills

Indiana Law Journal

Claims of securities fraud had historically failed because investors seldom rely on false or misleading statements when transacting securities. To bolster confidence in securities markets, the U.S. Supreme Court adopted a doctrine called “fraud-on-the-market” so that duped investors can show detrimental reliance without ever encountering the fraudulent statements. The doctrine assumes that a stock’s price reflects all material information, meaning that an investor who bought tainted stock has constructively relied on the fraud.

Fraud-on-the-market is not only unavailable in other markets but is also embattled within securities law. The doctrine has endured volleys of criticisms about whether markets actually absorb …

Regulating Dynamic Risk In Changing Market Conditions, Susan Navarro Smelcer, Anne Tucker, Yusen Xia

William & Mary Business Law Review

How successful are the SEC's attempts to regulate dynamic risk in financial markets? Using mutual fund disclosure data from two financial shocks--the Puerto Rican debt crisis and COVID-19--this Article finds evidence that SEC open-ended regulations, like the obligation to disclose changing market conditions, are largely successful in capturing dynamic, future risk. Funds engage in widespread and, often, detailed disclosures for new risks--although these disclosures vary widely in specificity. But not all funds disclose new risks. This creates perverse incentives for funds to opt out of disclosure or downplay threats with boilerplate language when new risks are emerging. This Article recommends …

Disclosure Of Private Climate Transition Risks, Michael P. Vandenbergh

William & Mary Law Review

This Article identifies a gap in the securities disclosure regime for climate change and demonstrates how filling the gap can improve financial disclosures and accelerate climate change mitigation. Private climate initiatives have proliferated in the last decade. Often led by advocacy groups, these private initiatives have used naming and shaming campaigns and other means to induce investors, lenders, insurers, retail customers, supply chain customers, and employees to pressure firms to engage in climate change mitigation. Based on an empirical assessment of the annual reports filed with the Securities and Exchange Commission (SEC) by Fortune 100 firms and the largest firms …

High-End Bargaining Problems, William W. Clayton

Vanderbilt Law Review

Many important areas of the law place great confidence in the ability of contracting parties to bargain effectively. In this Article, I question the wisdom of a formalistic faith in bargaining by identifying flaws in the bargaining process at the high end of the market, where parties are sophisticated and have substantial resources to aid them in bargaining.

My analysis focuses on the private equity fund industry, which is widely regarded as one of the most elite contracting spaces in the market. Because of rigorous investor qualification laws and other distinctive features of private equity funds, this industry enjoys many …

Is Bitcoin Prudent? Is Art Diversified? Offering Alternative Investments To 401(K) Participants, Edward A. Zelinsky

Articles

Whether 401(k) plans’ investment menus should feature “alternative” investments is a fact-driven inquiry applying ERISA’s fiduciary standards of prudence, loyalty, and diversification. Central to this fact-driven inquiry is whether the alternative investment class in question is broadly accepted by investors in general and by professional defined benefit trustees in particular. A similarly salient concern when making this inquiry is the financial unsophistication of many, perhaps most, 401(k) participants. Accounting for these considerations, this Article concludes that REITs, private equity funds, and hedge funds can, with limits, today be offered as investment choices to 401(k) participants, but that cryptocurrencies (including Bitcoin), …

The Sec's Ice-Cold Take On Climate Disclosure: Is The 2010 Interpretive Climate Guidance Working?, Patrick Dunbar

Villanova Environmental Law Journal (1991 - )

No abstract provided.

Lunch Lecture | Matthew Baum '09: Defending Clients From Investor Arbitration Claims, Ronald H. Filler Institute For Financial Services Law

Ronald H. Filler Institute for Financial Services Law

March 8, 2022

More Cowbell: Freeing Insider-Trading Liability For Mere-Thieves From The Supreme Court’S Twentieth-Century Devotion To The Cult Of Common-Law Doctrinal Analysis, Robert Steinbuch

Nevada Law Journal

No abstract provided.

Initial Public Offering And Optimal Corporate Governance, Albert H. Choi

Law & Economics Working Papers

This paper examines the long-standing debate over whether firms have a market-based incentive to adopt optimal governance provisions at their initial public offering (IPO). Various scholars and practitioners have argued that firms that offer stock to the public with suboptimal governance structure will be penalized by the market through a lower IPO price. At the same time, others have documented empirical evidence that many IPO firms have putatively suboptimal governance provisions, such as anti-takeover provisions and dual class structure, and many, especially those with dual-class structure, enjoy a market premium at their IPO. This paper attempts to bridge this gap. …

Lunch Lecture | A Career At The Financial Industry Regulatory Authority (Finra), Ronald H. Filler Institute For Financial Services Law

Ronald H. Filler Institute for Financial Services Law

February 17, 2022

Federally Mandated Online Sales Tax: A Logistical Solution For The Future Of E-Commerce, Daniel O'Connor

DePaul Business & Commercial Law Journal

No abstract provided.

Economic Structural Transformation And Litigation: Evidence From Chinese Provinces, To Economic Change And Restructuring, Doug Bujakowski, Joan Schmit

DePaul Business & Commercial Law Journal

No abstract provided.

The "Business Interruption" Insurance Coverage Conundrum: Covid-19 Presents A Challenge, Paul E. Traynor

DePaul Business & Commercial Law Journal

No abstract provided.

Misalighned Incentives In Markets: Envisioning Finance That Benefits All Of Society, Dr. Ryan Clements

DePaul Business & Commercial Law Journal

No abstract provided.

What’S A Nice Company Like Goldman Sachs Doing In The Supreme Court? How Securities Fraud Class Actions Rip Off Ordinary Investors–And What To Do About It, Richard A. Booth

Villanova Law Review (1956 - )

No abstract provided.

The Evolution Of Doj And Sec Expectations For Corporate Compliance Programs And Staying Ahead Of The Curve, Brian H. Benjet, Jamie Kurtz

Villanova Law Review (1956 - )

No abstract provided.

Section 546(E) Redux—The Proper Framework For The Construction Of The Terms Financial Institution And Financial Participant Contained In The Bankruptcy Code After The U.S. Supreme Court’S Holding In Merit, Peter V. Marchetti

Cardozo Law Review

This Article discusses and analyzes the proper framework for the construction of the terms “financial institution” and “financial participant” as defined in Sections 101(22)(A) and 101(22A) of the Bankruptcy Code (the Code), as they work in tandem with Section 546(e) of the Code. In 2018, the U.S. Supreme Court issued its long awaited decision in Merit, which held that the language regarding transfers “made by or to (or for the benefit of) . . . a financial institution” contained in Section 546(e) does not insulate the ultimate transferee of a constructive fraudulent action (a CFTA) simply because the company being …

Why Comparability Is A Greater Problem Than Greenwashing In Esg Etfs, Ryan Clements

William & Mary Business Law Review

This Article argues that comparability in environmental, social, and governance (ESG) exchange traded funds (ETFs) is a much greater problem than greenwashing. Rising demand for sustainable investment products in recent years has been met with an explosion in ESG ETF varieties, and numerous ESG-themed funds have captured massive capital inflows. There is little evidence, however, that deceptive “greenwashing” is widespread in ETFs. ETF issuers face significant reputational costs from such behavior, and there are effectively no consumer switching costs for hyperliquid, easily accessible ETFs. While nondeceptive practices of asset managers are observable in the zero-sum, highly competitive, asset management game …

Separating Governance Tokens From Securities: How The Utility Token May Fall Short Of The Investment Contract, Kyle Bersani

Cardozo Law Review

No abstract provided.

What’S In The Forecast For The Spac Boom & The Pslra?, Nick Krone

SLU Law Journal Online

Special Purpose Acquisition Companies (SPACs) have exploded in popularity. These so-called “blank check” companies are used as vehicles to take companies public without going through a traditional IPO process. Financial projections in SPACs are currently protected by the safe harbor for forward-looking statements afforded by the Private Securities Litigation Reform Act (PSLRA). In this article, Nick Krone examines whether SPACs should be protected by the PSLRA.

The New Public/Private Equilibrium And The Regulation Of Public Companies, Elisabeth De Fontenay, Gabriel V. Rauterberg

Law & Economics Working Papers

This Symposium Article examines how the public/private divide works today and maps out some of the potential implications for major issues in securities law. Classic debates in securities law were often predicated on the idea that public companies are a coherent class of firms that differ markedly from private companies. For more than fifty years after the adoption of the federal securities laws, this view was justified. During that period, the vast majority of successful and growing private firms eventually accepted the regulatory obligations of being public in order to access a wider and deeper pool of capital, among other …

Monsanto: Creator Of Cancer Liability

DePaul Business & Commercial Law Journal

No abstract provided.

Impact Of Corporate Response To Controversial Presidential Statements Or Policies

DePaul Business & Commercial Law Journal

No abstract provided.