Securities Law Commons^™

Investors And Employees As Relief Defendants In Investment Fraud Receiverships: Promoting Efficiency By Following The Plain Meaning Of "Legitimate Claim Or Ownership Interest", Jared A. Wilkerson

W&M Law Student Publications

Relief defendants are nominal, innocent parties who hold funds traceable to the receivership but have no legitimate claim or ownership interest in them. These nominal parties, as opposed to full or primary defendants, have no cause of action asserted against them, and if they show no legitimate claim to the funds traced to the receivership, the funds are disgorged — generally at summary judgment. This seemingly simple relief defendant tool is used by receivers and regulatory agencies to quickly recover receivership funds for ultimate distribution to creditors. Recently, however, conflict has arisen in federal courts concerning the meaning of “legitimate …

The Howey Test Turns 64: Are The Courts Grading This Test On A Curve?, Miriam R. Albert

William & Mary Business Law Review

Sixty-four years ago, the Supreme Court decided SEC v. W.J. Howey, crafting a definition for one form of security, known as an investment contract. The Supreme Court’s definition of investment contract in Howey is flexible, consistent with the Congressional approach to defining the broader concept of what constitutes a security. This choice of adopting a flexible definition for investment contract is not without cost, and raises the specter of inconsistent interpretation and/or application by the lower courts that threatens to undermine the utility of the Howey test itself as a trigger for investor protection. The intentional breadth and adaptability of …

Can Behavioral Economics Inform Our Understanding Of Securities Arbitration, Barbara Black

Faculty Articles and Other Publications

This paper contributes to the ongoing debate over FINRA arbitration by invoking behavioral economics principles to understand why PDAAs in securities arbitration continue to resist powerful market and political forces calling for their elimination.

Part II of the paper sets forth background information to put the issue in context. It first describes several important distinctions between securities arbitration and other forms of consumer arbitration. It next summarizes pertinent economic theory, first classical economic theory in support of PDAAs and then behavioral economics principles that challenge the classical approach.

Part III poses three questions regarding the staying power of PDAAs and …

The Tenth Annual Albert A. Destefano Lecture On Corporate, Securities & Financial Law. Corporate Accountability: Governance And Compensation Issues, Stanley Sporkin, Todd Lang, Gary Naftalis, Jeffrey Sonnenfeld, Louise Story

Fordham Journal of Corporate & Financial Law

CORPORATE ACCOUNTABILITY: GOVERNANCE AND COMPENSATION ISSUES

Whoops - The Imminent Reconciliation Of U.S. Securities Laws With International Comity After Morrison V. National Australia Bank And The Drafting Error In The Dodd-Frank Act, Andrew Rocks

Villanova Law Review (1956 - )

The article contends that the Dodd-Frank Act and the case, Morrison v. National Australia Bank, restrict the extraterritorial reach of U.S. fraud laws to private rights of action involving domestic transactions of U.S. securities. The author notes that the U.S. legal jurisdiction is governed by the policy of minimal interference and respect for sovereignties and by the principle of comity. He states that this position will help establish a cooperative regulatory effort across global markets.

323 Non-Managing Underwriters’ Role In Securities Offerings: Just Eye Candy?, Elena Marty-Nelson

Fordham Journal of Corporate & Financial Law

While there is considerable scholarship on the due diligence defense of lead underwriters in defective corporate securities offerings, there is surprisingly little analysis of the due diligence defense of non-managing underwriters. This article challenges the common perception that lead and non-managing underwriters necessarily “sink or swim” together for purposes of due diligence. An analysis of the statutory structure of Section 11 of the Securities Act of 1933 reveals that non-managing underwriters are not inextricably tethered to the lead. Rather, non-managing underwriters who actively question the lead’s due diligence investigation should be able to meet their own affirmative defense even when …

Clearing And Trade Execution Requirements For Otc Derivatives Swaps Under The Frank-Dodd Wall Street Reform And Consumer Protection Act, Willa E. Gibson

Akron Law Faculty Publications

This paper examines Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act entitled the “Wall Street Transparency and Accountability Act of 2010” (the “Act”). The Act provides a comprehensive regulatory framework for swap transactions that designates the Commodities Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) as the primary regulators of the OTC derivatives swap market. The Act provides a very broad definition of swaps to include most OTC derivatives transactions, and it grants the CFTC regulatory jurisdiction over them with the exception of security-based swaps to which the SEC is granted regulatory jurisdiction. …

What Role For “Women,” “Men,” And Transpeople/Intersex People In Gender Equality: A Commentary, Edward D. Stein

Articles

This has been a very rich opening panel to what promises to be a terrific conference. The panelists' comments go in such varied directions that it is a challenge to be both a commentator and summarizer, especially when I have just a few minutes to speak. What I plan to do is say a little bit to draw together some of the themes that the panelists have been talking about that are connected to a couple of topics I have been working on while at the same time trying to look forward to some of the things I hope we …

Information Asymmetry And Information Failure: Disclosure Problems In Complex Financial Markets, Steven L. Schwarcz

Faculty Scholarship

Disclosure of information has been a key to regulation of the financial markets in the United States. Indeed, some have argued that the ‘exclusive focus [of federal securities regulation] is on full disclosure’ (Hazen, 2005). Yet there is relatively little dispute that although most if not all of the risks giving rise to the collapse of the market for structured securities backed by subprime mortgages were disclosed, the disclosure was ineffective. Disclosure failed because of the complexity of those securities and transactions.

This chapter examines disclosure’s insufficiency in addressing information asymmetry, arguing that complexity can cause information failure. There are …

The End Of Mandatory Securities Arbitration?, Jill I. Gross

Pace Law Review

No abstract provided.

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.

Leveraged Etfs: The Trojan Horse Has Passed The Margin-Rule Gates, William M. Humphries

Seattle University Law Review

What do the Great Depression, the Great Recession, and the demise of Lehman Brothers and Bear Sterns all have in common? One word: leverage. The misuse of leverage, in all its forms, contributed greatly to all of these events. Yet even today, common investors can purchase a leveraged exchange-traded fund (leveraged ETF), a complex product that uses leverage to increase returns, without triggering applicable laws designed to regulate the use of leverage. This Comment articulates the basics surrounding the functions and operations of leveraged ETFs and margin rules in order to assess the compatibility of the two. The Comment argues …

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

Faculty Articles and Other Publications

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 the deterrence of wrongdoing. But many critics have claimed that there is a hidden dark side to the successful prosecution of a securities class action. In this paper, we shed light on these issues by examining whether the revelation of earlier misstatements, the initiation of private suit, and the payment of a substantial settlement, weaken the defendant firm so that the firm is permanently worse off as a consequence of the settlement.

We find …

Blue Skies Ahead: Auction Rate Securities And The Need For A Private Right Of Action For New York Investors, Stephanie Myers

Pace Law Review

No abstract provided.

Evolving Regulation Of Corporate Governance And The Implications For D&O Liability: The United States And Australia, Joan T.A. Gabel, Nancy R. Mansfield, Paul Von Nessen, Austin W. Hall, Andrew Jones

San Diego International Law Journal

This Article compares the modern corporate regulatory environments in the United States and Australia, including an analysis of the climate for Directors & Officers (D & O) liability coverage. Comparing these regulations across two large markets with similar historical bases for assessing director and officer liability allows us to explore which reforms may be more effective as new scandals emerge.

Removal Of Covered Class Actions Under Slusa: The Failure Of Plain Meaning And Legislative Intent As Interpretative Devices, And The Supreme Court's Decisive Solution, J. Tyler Butts

William & Mary Business Law Review

No abstract provided.

Keynote Address: The Conflicted Trustee Dilemma, Steven L. Schwarcz

NYLS Law Review

No abstract provided.

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

Scholarly Works

No abstract provided.

Do Differences In Pleadings Standards Cause Forum Shopping In Securities Class Actions?: Doctrinal And Empirical Analyses, James D. Cox, Randall S. Thomas, Lin (Lynn) Bai

Faculty Articles and Other Publications

Federal appellate courts have promulgated divergent legal standards for pleading fraud in securities fraud class actions after the Private Securities Litigation Reform Act (PSLRA). Recently, the Supreme Court of the United States issued a decision in Tellabs, Inc. v. Makor Issues & Rights, Ltd. that could have resolved these differences, but did not do so. This Paper provides two significant contributions. We first show that Tellabs avoids deciding the hard issues that confront courts and litigants daily in the wake of the PSLRA's heightened pleading standard. As a consequence, the opinion keeps very much alive the circuits' disparate interpretations of …

Stoneridge Investment Partners, Llc V. Scientific-Atlanta, Inc.: Substitution Of Congressional Intent With Caveat Emptor, Albert J. Matricciani Jr.

Journal of Business & Technology Law

No abstract provided.

The Diminishing Role Of The Private Attorney General In Antitrust And Securities Class Action Cases Aided By The Supreme Court, Carl W. Hittinger, Jarod M. Bona

Journal of Business & Technology Law

No abstract provided.

Stoneridge Investment Partners, Llc V. Scientific-Atlanta, Inc.: Views From The Academy, The Bar, And The Bench. Introduction

Journal of Business & Technology Law

No abstract provided.

The Future Of Securities Litigation, Richard A. Booth

Journal of Business & Technology Law

No abstract provided.

Securities Law And Antitrust Law: Two Legal Titans Clash Before The United States Supreme Court In Credit Suisse Securities V. Billing, Stacey Sheely Chubbuck

Oklahoma Law Review

No abstract provided.

Storetrax.Com, Inc. V. Gurland: An Unnecessarily Broad Rule That Could Adversely Affect A Corporation's Shareholders, Julie M. Dietrick

Journal of Business & Technology Law

No abstract provided.

Proving Preemption By Proving Exemption: The Quandary Of The National Securities Market Improvement Act, Jeffrey D. Chadwick

University of Richmond Law Review

No abstract provided.

Estate Of Pew V. Cardarelli, Rachel Bell

NYLS Law Review

No abstract provided.

Teamsters Local 445 Freight Division Pension Fund V. Dynex Capital Inc., Erica E. Bonnett

NYLS Law Review

No abstract provided.

Hall Street Blues: The Uncertain Future Of Manifest Disregard, Jill I. Gross

Elisabeth Haub School of Law Faculty Publications

In 2008, in Hall Street Assocs. v. Mattel, Inc., the Supreme Court resolved a then-existing split in the federal circuits and held that parties cannot contractually expand the grounds for judicial review of an arbitration award when invoking the Federal Arbitration Act's vacatur provisions, elevating the finality of arbitration over the parties’ freedom of contract. The Hall Street decision necessarily impacted subsequent jurisprudence regarding parties’ motions to vacate arbitration awards. While the opinion clearly and explicitly barred further contractual expansion of grounds for review, it also avoided and thus left unresolved the issue of whether it would endorse or reject …

Keynote Address: The Conflicted Trustee Dilemma, Steven L. Schwarcz

Faculty Scholarship

No abstract provided.