Securities Law Commons^™

Retaining Mandatory Securities Disclosure: Why Issuer Choice Is Not Investor Empowerment, Merritt B. Fox

Faculty Scholarship

This Article advances the reopened debate over mandatory disclosure in two ways. First, it demonstrates that the proponents of issuer choice have not effectively countered the arguments that have formed the basis of the prevailing consensus for retaining mandatory disclosure. While this consensus was formed when the alternative to mandatory disclosure was total abandonment of regulation, the proponents of issuer choice have not shown how the arguments that form the basis of this consensus have any less force when applied to the new alternative of issuer choice. Nor have the proponents offered persuasive, more general rebuttals to these arguments. Second, …

United States V. O'Hagan: Defining The Limits Of Fraud And Deceptive Pretext Under Rule 10b-5, Theodore C. Mccullough

Seattle University Law Review

This Note argues that broadening the present embezzlement model of the Rule 10b- 5 misappropriation theory will more fully reflect both the language and intent of § 10(b) (of the 1934 Securities Exchange Act) and Rule 10b-5, and more importantly accommodate the sophistication of today's insider trading schemes. Part II of this Note examines the uses of inside information both prior to and after the creation of the 1934 Securities Exchange Act, and how § 10(b) and Rule 10b-5 were created to proscribe these uses. Part III examines the language and intent behind § 10(b) and Rule 10b-5 and argues …

Insider Trading Deterrence Versus Managerial Incentives: A Unified Theory Of Section 16(B), Merritt B. Fox

Faculty Scholarship

Part I of this article assesses the social costs of a crude rule of thumb. Because section 16(b) applies to a given class of paired transactions, it deters both transactions based on inside information and transactions not so based. Each time section 16(b) is stretched to include a class of paired transactions, it deters some additional innocent transactions. This side effect will take the form of officers' and directors' purchasing fewer shares in their own companies and refusing to accept as large a portion of their compensation in a form based on share price. There are strong theoretical and empirical …

The New Corporate Law, Joel Seligman

Scholarship@WashULaw

My thesis is a simple one. In the twentieth century state corporate law norms for the large publicly held corporation have been progressively supplanted by federal standards, particularly those originating in federal securities law. This has occurred both because of the promulgation of new federal standards and because of the atrophy of state corporate law. Certain applications of this thesis are little questioned today. For instance, it is now a conventional idea that the state law applicable to insider trading has largely been ignored and has been generally displaced by such federal securities law staples as Rule 10b-5, section 16 …

Liquidity Versus Control: The Institutional Investor As Corporate Monitor, John C. Coffee Jr.

Faculty Scholarship

Within academia, paradigm shifts occur regularly, some more important than others. As the takeover wave of the 1980s ebbs, a significant shift now appears to be in progress in the way the public corporation is understood. Above all, the new thinking emphasizes that political forces shaped the modern corporation. While the old paradigm saw the structure of the corporation as the product of a Darwinian competition in which the most efficient design emerged victorious, this new perspective sees political forces as constraining that evolutionary process and possibly foreclosing the adoption of a superior organizational form. Thus, my colleague Professor Mark …

Reinventing The Outside Director: An Agenda For Institutional Investors, Ronald J. Gilson, Reinier Kraakman

Faculty Scholarship

Managerialist rhetoric puts the institutional investor between a rock and a hard place. The institutional investor is depicted as a paper colossus, alternatively greedy and mindless, but in all events a less important corporate constituency than that other kind of investor, the "real" shareholder. The unspoken corollary is that, regardless of the institution's investment strategy, its interests may appropriately be ignored.

An institution that trades stock frequently is considered a short-term shareholder without a stake in the future of the corporation. According to the familiar argument, the short-term shareholder has no more legitimate claim on management's attention than does a …

Shareholder Access To The Proxy Revisited, Jayne W. Barnard

Faculty Publications

No abstract provided.

Oral Misrepresentations At "Roadshows" And In Other Settings: Illusory Liability Under Rule Lob-57

Washington and Lee Law Review

No abstract provided.

Negligence Vs. Scienter: The Proper Standard Of Liability For Violations Of The Antifraud Provisions Regulating Tender Offers And Proxy Solicitations Under The Securities Exchange Act Of 1934

Washington and Lee Law Review

No abstract provided.

Derivative Liability In Securities Law: Controlling Person Liability, Respondeat Superior, And Aiding And Abetting, Ralph C. Ferrara, Diane Sanger

Washington and Lee Law Review

No abstract provided.

Continuing Confusion In The Definition Of A Security: The Sale Of Business Doctrine, Discretionary Trading Accounts, And Oil, Gas And Mineral Interests

Washington and Lee Law Review

No abstract provided.

Loan Participation Agreements As Securities: Judicial Interpretations Of The Securities Act Of 1933 And The Securities Exchange Act Of 1934, J. Thomas Cookson

William & Mary Law Review

No abstract provided.

Fraud In Commodity Futures Trading--An Examination Of The Investor's Remedies, Lisa G. Demartini

Vanderbilt Law Review

This Note examines the various avenues of redress available to the defrauded commodity futures investor. Initially, an examination of two remedies expressly provided in the Commodity Exchange Act (CEA)--reparations and arbitration--demonstrates their current inefficiencies and inadequacies. Next, the Note considers the possibility of recovery under the antifraud provision of the Securities Exchange Act and argues that such a cause of action should still be available when the investor can show that the particular discretionary trading account is a security." Finally, a discussion of an implied private right of action for violations of the antifraud provision of the CEA reveals much …

Scienter In Sec Injunctive Proceedings

Washington and Lee Law Review

No abstract provided.

Resolving The Conflict Between Section 10(B) And The Express Remedies Of The Securities Acts: The Need For An Internally Consistent Approach To Implication

Washington and Lee Law Review

No abstract provided.

Section 13(D) Pf The '34 Act: The Inference Of A Private Cause Of Action For A Stock Issuer

Washington and Lee Law Review

No abstract provided.

An Economic Analysis Of Section 16(B) Of The Securities Exchange Act Of 1934

William & Mary Law Review

No abstract provided.

The Role Of Scienter And The Need To Limit Damages In Rule 10b-5 Actions--The Texas Gulf Sulphur Litigation, J. Kent Dunlap

Kentucky Law Journal

No abstract provided.

Corporations--Securities Exchange Act Of 1934, § 16(B)--"Sale" Defind, Steve Hixson

Kentucky Law Journal

No abstract provided.

The Case Against Insider Trading: A Response To Professor Manne, David Ferber

Vanderbilt Law Review

Professor Manne's article appears to be largely an attack on critics of his book Insider Trading and the Stock Market. I must confess I have not read his book. I did, however, read an earlier article by Professor Manne attacking the position of the Commission in the Texas Gulf case, and I once participated in a forum at which Professor Manne expressed his view that inside information should be something that a corporate official might sell. I disagree with Professor Manne's basic position that "[t]he debatable aspects of insider trading are capable of resolution through tools of economic analysis,"' as …

Insider Liability For Short-Swing Profits Pursuant To Mergers And Related Transactions, James P. Hemmer

Vanderbilt Law Review

This article considers the problems presented by the application of section 16(b) of the Securities Exchange Act of 1934 to corporate merger transactions. Mr. Hemmer argues that the"matching across" proposal, which has been suggested by some commentators, should not be applied to the merger situation. Instead, the author advocates that the "possibility of abuse" test, which the courts have applied to conversion transactions, should also. be applicable to the corporate merger. Mr. Hemmer feels this approach will prevent the abuses for which section 16(b) was enacted and, at the same time, provide the courts with a flexible test for this …

Securities-Stocklist Authorizations-Solicitation Of Stocklist Authorizations Is Within The Proxy Regulations Of The Securities Exchange Act-Studebaker--Corp. V. Gittlin, Michigan Law Review

Michigan Law Review

Gittlin, a shareholder of the Studebaker Corporation, planned to solicit proxies for the election of directors in opposition to the existing management. As an initial step in the implementation of this plan, he sought to obtain a stockholder's list and accordingly initiated proceedings in a New York court under section 1315(a) of the New York Business Corporation Law which grants a right of access to a shareholder who has obtained authorizations in writing from the holders of at least five per cent of the outstanding shares of the corporation. In order to meet the five per cent requirement, Gittlin had …

Convertible Securities And Section 16(B): The Persistent Problems Of Purchase, Sale, And Debts Previously Contracted, W. Richard Keller

Michigan Law Review

In 1934, Congress enacted section 16(b) of the Securities Exchange Act in an effort to counteract the evils flowing from speculation in corporate securities by certain persons having information regarding the corporation's affairs or occupying positions of trust which permit manipulation of corporate policies. In general, section 16(b) permits the issuer, or one or more stockholders acting in its behalf, to recover any "short-swing" profit realized from purchases and sales (or sales and purchases) of the issuer's equity securities within a six-month period by directors, officers, or beneficial owners of more than ten per cent of any class of equity …

Proof Of Scienter Necessary In A Private Suit Under Sec Anti-Fraud Rule 10b-5, Michigan Law Review

Michigan Law Review

Of the vast amounts of statutory and quasi-statutory material governing the securities business, the Securities and Exchange Commission's rule 10b-51 has potentially the greatest direct importance to the largest number of people. While several provisions in the government's regulatory scheme set more or less specific standards of conduct for securities issuers, broker-dealers, or corporate insiders, the anti-fraud provisions of rule 10b-5 apply to all persons directly or indirectly connected with any sale or purchase of securities transacted through a facility of interstate commerce, the mails, or on a national exchange. In its three clauses, rule 10b-5 forbids any person (1) …

Securities Regulation-Federal Anti-Fraud Provisions-Applicability Of Insider Responsibility To Broker In Possession Of Inside Corporate Information, John A. Krsul Jr.

Michigan Law Review

During a period of upward movement in the price of Curtiss-Wright common stock, the corporation's board of directors voted to reduce the stock dividend by forty percent, an action certain to have an immediate adverse effect upon the stock's market price. Although the board immediately authorized the transmission of information concerning its action to the New York Stock Exchange, an inadvertent delay of forty-five minutes ensued. Unaware of the delay, C, a director of Curtiss-Wright and a registered representative of Cady, Roberts & Co. (registrant) , a registered broker-dealer, telephoned registrant to inform G, one of its partners, …

Around And Beyond The Sec-The Disenfranchised Stockholder, David C. Bayne

Indiana Law Journal

No abstract provided.

The Effect Of Regulation T On Cash Transactions In Securities, Franklyn S. Judson, Frank D. Emerson

Michigan Law Review

Even a casual glance at the financial page of almost any daily newspaper will at once bring forcefully to the attention of the reader the fact that the inflationary trend now being experienced by the commodity, real estate, and labor markets is likewise a factor in the securities market. A tremendous increase in the market prices of many securities has recently been experienced. A large number are at or near all-time highs. Likewise, the volume of trading is almost without precedent in the annals of the securities business.

Expansion Of Federal Supervision Of Securities Through The Inquisitional And Census Powers Of Congress-A Suggestion, Kenneth Rush

Michigan Law Review

The Securities Act and the Securities Exchange Act, principally through the means of compulsory disclosure of information, are intended to aid the investing public in evaluating securities and to prevent the undue influencing of their value, market price and sale. These ends are undoubtedly worth seeking in their entirety, but such is the nature of our federal system that the acts, being founded upon the powers of Congress over the facilities of interstate commerce and of the mails, purport to relate only to transactions in securities involving use of those facilities.