Securities Law Commons^™

Determining The Proper Pleading Standard Under The Private Securities Litigation Reform Act Of 1995 After In Re Silicon Graphics , Erin Brady

Pepperdine Law Review

No abstract provided.

Paper On The Business Case For Transparency, Perrine Toledano

Columbia Center on Sustainable Investment Staff Publications

CCSI strongly supports the transparency of contracts and tax flows. CCSI shares the belief of many stakeholders that transparency is essential to leverage extractive industries for sustainable development and is in the mutual interest of all stakeholders. However, some industry players continue to voice the concern that increased transparency would be harmful for their business. Therefore, CCSI is working to also establish the business case for transparency.

In one such case, some industry players have been lobbying against the regulations developed by the Security and Exchange Commission to implement the mandatory disclosure provisions of the Dodd Frank Wall Street Reform …

Openness In Extraction, Lisa E. Sachs, Shefa Siegel

Columbia Center on Sustainable Investment Staff Publications

More than a decade before becoming President of the United States, Herbert Hoover, a mining engineer, observed that, among the branches of property law, the distribution of mining rights most elegantly reflects the vicissitudes of social and political relations. According to Hoover, mining rights were a "never-ending contention," as old as economic and civil conflict, among four principle classes – overlord, state, landowner, and miner. "Somebody," he concluded, "has to keep peace and settle disputes."

Today, with the prices of major natural-resource commodities – including oil, coal, copper, gold, and iron ore – doubling, tripling, or rising even faster, the …

Sec And The Foreign Corrupt Practices Act: Fighting Global Corruption Is Not Part Of The Sec's Mission, Barbara Black

Faculty Articles and Other Publications

No abstract provided.

The Politicization Of Corporate Governance: Bureaucratic Discretion, The Sec, And Shareholder Ratification Of Auditors, J. Robert Brown Jr.

Sturm College of Law: Faculty Scholarship

The role of the Securities and Exchange Commission in the corporate governance process has shifted dramatically in recent years. The Commission has increasingly supplanted state law in determining substantive standards of corporate governance. The replacement of states with the Commission will have significant consequences.

Below Investment Grade And Above The Law: A Past, Present And Future Look At The Accountability Of Credit Rating Agencies, Marilyn Blumberg Cane, Adam Shamir, Tomas Jodar

Faculty Scholarship

This article covers the evolution of the credit rating industry, in particular, the noteworthy shift from purchaser-subscriber to issuer pay model. It then describes the history of SEC CRA regulatory measures, most notably the adoption of SEC Rule 436(g), adopted in 1982, which specifically eliminated liability for the big CRAs (Moody’s, Standard & Poor’s, Fitch’s and Duff and Phelps) as “experts” under Sections 7 and 11 of the Securities Act of 1933. The article then covers the Credit Rating Agency Reform Act of 2006 and the adoption of SEC Rule 17g-5 in an attempt to control conflicts of interest within …

A Bright Idea: A Bright-Line Test For Extraterritoriality In F-Cubed Securities Fraud Private Causes Of Action, Jennifer Mitchell Coupland

Northwestern Journal of International Law & Business

Whether a foreign or American claimant has a private right of action in so-called ―Foreign-Cubed‖ or ―Foreign-Squared‖ claims under Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Securities and Exchange Commission (SEC) Rule 10b-5 has been the subject of much debate among U.S. courts, Congress, and the international community. Historically, these cases have been heard in the United States if the conduct had a substantial effect in the United States or on U.S. citizens (the effects test), or if the fraudulent or wrongful conduct occurred in the United States (the conduct test). However, in June 2010, …

The Bizarre Law & Economics Of 'Business Roundtable V. Sec', Grant M. Hayden, Matthew T. Bodie

All Faculty Scholarship

Corporations are legal entities designed to foster certain kinds of collective economic activity. The decisionmaking power within a corporation ultimately rests with a board of directors elected by shareholders. Shareholders, however, do not use anything like a conventional ballot in these elections; instead, they fill out a “proxy ballot,” delivered to them by the incumbent board. This proxy ballot lists only the incumbent board’s chosen nominees, very often the board members themselves. If a shareholder wants to run for director or propose another nominee for the board, she needs to provide all other shareholders with a separate proxy ballot — …

Lessons From The Flash Crash For The Regulation Of High-Frequency Traders, Edgar Ortega Barrales

Fordham Journal of Corporate & Financial Law

Are equity markets vulnerable to a sudden collapse if the traders who account for about half of the volume have no regulatory obligations to stabilize prices? After the “Flash Crash” of May 6, 2010, policymakers have resoundingly answered this question in the affirmative. During the worst of the crash, some of the so-called high-frequency trading firms that dominate equity markets stopped trading and prices collapsed, momentarily wiping out almost $1 trillion in market value. In response, the U.S. Securities and Exchange Commission is considering whether high-frequency trading firms should be required to act as the traders of last resort. This …

Regulation A And The Jobs Act: A Failure To Resuscitate, Rutheford B. Campbell Jr.

Law Faculty Scholarly Articles

Regulation A offers small businesses an exemption from the registration requirements of the Securities Act of 1933. The exemption is generally consistent with the obligation of the Securities and Exchange Commission to fashion exemptions that balance investor protection and capital formation. From the perspective of small businesses, the exemption may appear to provide an efficient access to external capital.

Regulation A, however, has fallen into nearly complete disuse. The millions of small businesses in this country, all of which at some point need external capital to survive and grow, simply do not use Regulation A.

Two reasons account for small …

Financial Abuse Of The Elderly, Christine Lazaro

Faculty Publications

(Excerpt)

As of 2010, 13% of the population is over age 65; 16% is over age 62. Another 27% of the population falls into the “Baby Boomer” category, aged between 45 and 64.

As Americans approach retirement, the question is raised, “are they prepared?” A study published earlier this year found, “a substantial fraction of persons die with virtually no financial assets—46.1 percent with less than $10,000—and many of these households also have no housing wealth and rely almost entirely on Social Security benefits for support. In addition, this group is disproportionately in poor health. Based on a replacement rate …

Bien Venue: Sec V. Johnson And The Policy For Broad Procedural Requirements In Public Securities Actions, Kelly Kylis

Catholic University Law Review

No abstract provided.

Memo To The Sec On The Proposed Rule On Disclosure Of Payments By Resource Extraction Issuers, Perrine Toledano

Columbia Center on Sustainable Investment Staff Publications

CCSI strongly supports the transparency of contracts and tax flows. CCSI shares the belief of many stakeholders that transparency is essential to leverage extractive industries for sustainable development and is in the mutual interest of all stakeholders. However, some industry players continue to voice the concern that increased transparency would be harmful for their business. Therefore, CCSI is working to also establish the business case for transparency.

In one such case, some industry players have been lobbying against the regulations developed by the Security and Exchange Commission to implement the mandatory disclosure provisions of the Dodd Frank Wall Street Reform …

The Wreck Of Regulation D: The Unintended (And Bad) Outcomes For The Sec’S Crown Jewel Exemptions, Rutheford B. Campbell Jr.

Law Faculty Scholarly Articles

Regulation D is—or at least should be—the crown jewel of the Securities and Exchange Commission's regulatory exemptions from the registration requirements of the Securities Act of 1933. It offers businesses—especially businesses with relatively small capital requirements—fair and efficient access to vital, external capital.

In this article, I present data derived from deep samples of recent Form Ds filed with the Commission. The data show that Regulation D is not working in the way the Commission intended or in a way that benefits society The data reveal that companies attempting to raise relatively small amounts of capital under Regulation D overwhelmingly …

Shareholder Access And Uneconomic Economic Analysis: Business Roundtable V. Sec, J. Robert Brown Jr.

Sturm College of Law: Faculty Scholarship

Business Roundtable v. SEC, arose out of a legal challenge to what is probably the most controversial rule ever adopted by the Securities and Exchange Commission (SEC or Commission). Rule 14a-11 mandated that public companies allow long term shareholders to include nominees for the board of directors in the company’s proxy statement. The rule held out the promise that shareholders would be able to more easily nominate and elect their own candidates to the board. Access was popular among shareholders and strenuously opposed by public companies.

The DC Circuit struck down the rule, imposing a “nigh impossible” standard with respect …

What Happened To The "Up-Tick" Rule?, Constantine N. Katsoris

Faculty Scholarship

No abstract provided.

Securities Law In The Roberts Court: Agenda Or Indifference?, Adam C. Pritchard

Articles

To outsiders, securities law is not all that interesting. The body of the law consists of an interconnecting web of statutes and regulations that fit together in ways that are decidedly counter-intuitive. Securities law rivals tax law in its reputation for complexity and dreariness. Worse yet, the subject regulated-capital markets-can be mystifying to those uninitiated in modem finance. Moreover, those markets rapidly evolve, continually increasing their complexity. If you do not understand how the financial markets work, it is hard to understand how securities law affects those markets.

A Summary Of The Sec Study On Investment Advisors And Broker-Dealers, Christine Lazaro

Faculty Publications

(Excerpt)

For some time, there has been a debate over what the appropriate standards of care are and should be for both broker-dealers and investment advisers. The standards vary based on where the investment professional is, where the customer is, what types of services are being offered and what responsibilities are assumed. Across the country, there is a complete lack of uniformity. Congress considered this when drafting the Dodd-Frank Wall Street Reform and Consumer Protection Act. Accordingly, pursuant to Dodd-Frank, Congress required the SEC (the “Commission”) to conduct a study to examine the current standards of care for both brokers …

The Lion Awakens: The Foreign Corrupt Practices Act - 1977 To 2010, Michael B. Bixby

San Diego International Law Journal

This Article discusses the history, purposes and provisions of the Foreign Corrupt Practices Act, and traces its use and enforcement activity from 1977 to the present. This once little-used law has in recent years become the focus of aggressive activity by both the U.S. Department of Justice and the Securities and Exchange Commission. The manuscript also includes numerous charts reporting on key cases and enforcement activities over the last thirty-three years by the DOJ and SEC, as well as other information and statistics regarding the Foreign Corrupt Practices Act.

Managing Corporate Federalism: The Least-Bad Approach To The Shareholder Bylaw Debate, Christopher M. Bruner

Scholarly Works

Over recent decades, shareholders in public corporations have increasingly sought to augment their own power - and, correlatively, to limit the power of boards - through creative use of corporate bylaws. The bylaws lend themselves to such efforts because enacting, amending, and repealing bylaws are essentially the only corporate governance actions that shareholders can undertake unilaterally. In this Article I examine thecontested nature of bylaws, the fundamental issues of corporate power and purpose that they implicate, and the differing ways in which state and federal lawmakers and regulators may impact the debate regarding thescope of the shareholders' bylaw authority.

The …

The Multienforcer Approach To Securities Fraud Deterrence: A Critical Analysis, Amanda M. Rose

Vanderbilt Law School Faculty Publications

Participants in the U.S. capital markets can be sued for securities fraud by a mishmash of enforcers, including the SEC, class action plaintiffs, and state regulators. Does this multi-enforcer approach make sense from a deterrence perspective? This Article suggests that the answer is probably no. Although in theory there are conditions under which a multi-enforcer approach would promote optimal deterrence, it is unclear at best that those conditions exist in the United States. And further empirical research, while warranted, is unlikely to resolve the issue definitively. The status quo tends to persevere in the face of this sort of irreducible …

Breaking Bucks: Sec Regulation By Obfuscation, William A. Birdthistle

All Faculty Scholarship

This Article argues that the Securities and Exchange Commission’s first and most significant response to the economic crisis profoundly contradicts widely accepted theoretical and regulatory approaches to financial oversight. More alarmingly, the SEC’s newest rules increase rather than decrease the likelihood of future failures in money market funds and the broader capital markets.

Scholars – of both neoclassical and behavioral economic theory – have long insisted that transparency and disclosure play essential roles in ensuring efficient capital markets and sound financial regulation. Professors Gilson and Kraakman notably argued that the efficient capital market hypothesis, and its reliance on a market …

On Regulating Conflicts Of Interest In The Credit Rating Industry, Lin (Lynn) Bai

Faculty Articles and Other Publications

This paper discusses issues giving rise to conflict of interest concerns in the credit rating industry and examines whether and how those issues are addressed in the current regulation that builds on the guidelines of the Credit Rating Agency Reform Act of 2006, the SEC rules that were initially adopted in 2007 and recently amended in 2009, and the internal code of conducts of rating agencies. The examination leads to a conclusion that conflict of interest at the individual rating analyst level and some concerns of conflict of interest at the agency level have been largely addressed in the current …

The Performance Disclosures Of Credit Rating Agencies: Are They Effective Reputational Sanctions?, Lin (Lynn) Bai

Faculty Articles and Other Publications

The SEC has recently added new provisions to the credit rating agency regulation. These provisions require credit rating agencies to disclose publicly their rating actions and performance measurements. The new requirements seek to achieve two goals: (1) deter conflicts of interest in the credit rating industry by invoking the reputational sanction power of performance statistics, and (2) help new entrants to the industry build a track record so they can compete with established agencies. This paper reveals empirical evidence that the current disclosure requirements cannot achieve these goals and makes recommendations on how the regulation should be improved in light …

Introduction: The Sec At 75, Barbara Black

Faculty Articles and Other Publications

This Introduction begins with a brief look back at the creation of the SEC and then examines the present-day agency's expression of its mission. It next reviews the Blueprint's assessment of the agency and its proposal for reform and then turns to the Obama Administration's Financial Regulatory Reform and its proposals relating to the SEC. Finally, this Introduction describes five issues to which the panelists paid particular attention: the SEC's mission, competition among financial markets, the proposal to merge the SEC and the Commodity Futures Trading Commission (CFTC), the role of financial market networks in systemic risk regulation, and the …

Sec Interpretive Guidance For Climate Related Disclosures, Nickolas M. Boecher

Sustainable Development Law & Policy

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.

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 …

Introduction: Insider Trading (Oxford University Press 3d Ed.), William K.S. Wang, Marc I. Steinberg

Faculty Journal Articles and Book Chapters

This paper is the introductory chapter to Insider Trading (Oxford University Press 3d ed. 2010). This treatise analyzes the application of various laws to stock market insider trading and tipping. Among the federal laws are Exchange Act section 10(b), SEC Rule 10b-5, mail/wire fraud, SEC Rule 14e-3, Exchange Act section 16, and Securities Act section 17(a). The state law discussed is both state common law and a state law claim by the issuer.

Another chapter addresses government enforcement of the insider trading/tipping prohibitions. A chapter on compliance programs deals with how firms can try to prevent illegal insider trading and …

The Sec In Bankruptcy, G. Ray Warner, Keith Sharfman

Faculty Publications

(Excerpt)

Since its founding, the Securities and Exchange Commission ("SEC") has played an important role as both an advisor and regulator in bankruptcy cases, valuing debtor assets, opining on plans of reorganization, regulating the trading of claims and the disclosure of information, and much else. After a period of relative inactivity following the passage of the Bankruptcy Code (which has a less expansive view of the SEC's role than that of the former Chandler Act whose regime the Code replaced), the SEC's involvement in bankruptcy has intensified in recent years with the ascendancy of equity committees and with the increased …