Securities Law Commons^™

F. Hodge O'Neal Corporate And Securities Law Symposium: Path Dependence And Comparative Corporate Governance, Ronald J. Mann, Curtis J. Milhaupt

Faculty Scholarship

The study of institutions, and particularly the study of institutions that societies use to govern business enterprises, is at a point of transition. In the last two or three decades, scholars focusing on economic principles to define appropriate legal rules and corporate institutions rose up to challenge the traditional orthodoxy of corporate governance found in the Berle and Means corporation.

One of the most exciting trends in the literature rests upon the "increasing marginal returns" school of economics associated with Brian Arthur and the Santa Fe Institute. The traditional neoclassical economic theory of production, familiar from decades of undergraduate and …

Rule 10b-5 Liability For Front-Running: Adding A New Dimension To The Money Game, David M. Bovi

St. Thomas Law Review

In the financial arena, the name of the game is money--make it now, make it fast, make a lot. To some players in this financial game, the question of whether to play fairly or unfairly, legally or illegally, is not debated. Their only issue of concern is how much, how fast, and what are the chances of being caught. Throughout history, this attitude has fostered the creation of a countless number of fraudulent schemes and contrivances with the sole purpose of making fast and easy money, regardless of the consequences to other players in the game. One particular fraudulent scheme, …

Rationalizing The Disclosure Process: The Summary Annual Report, J. Robert Brown Jr., Stephen M. Detore

Sturm College of Law: Faculty Scholarship

In 1986 the staff of the Division of Corporate Finance of the SEC issued two letters approving the use of a summary annual report. These letters have acceded to management a great amount of discretion in connection with the annual report. The summary annual report costs less to produce than the con- ventional annual report and a decision about its use may en- courage a re-examination of the shareholder communication process. However, uncertainty exists over whether the summary annual report will implicate concerns under the securities laws.

The Preexisting Relationship Doctrine Under Regulation D: A Rule Without Reason?, David B.H. Martin, Jr., L. Keith Parsons

Washington and Lee Law Review

No abstract provided.

Legal Factors In The Acquisition Of A United State Corporation: Litigation By Hostile Targets, Johan E. Droogmans

LLM Theses and Essays

Acquisitions of United States corporations have become increasingly complex takeover contests, where bidders and target corporations are forced into offensive and defensive litigation strategies to protect their respective interests. Targets often assert that the bidders have violated federal or state securities laws, federal antitrust laws, federal margin regulations, federal and state regulatory systems, and federal anti-racketeering laws. These lawsuits are primarily based on the principal federal regulation of takeovers in section 14(a) of the Securities and Exchange Act of 1934 and the Williams Act. Target litigation is customary, but entails certain disadvantages; a lawsuit rarely stops an offer, is expensive, …

Tax Shelter As A Security: The Use Of Tax Returns In A 10b-5 Action, Risa A. Levine

Fordham Urban Law Journal

This student note examines the consequences to investors who initially invest through tax shelters, and whose investments later fail, resulting in liability. The author questions policy for treating those investments in a similar manner to other securities fraud, by looking at the history and procedure of a 10b-5 private cause of action. Tax returns can be used to evaluate the liability and penalties for SEC actions and the ensuing private actions. The author concludes that because 10b-5 actions are judicially created, they must be carefully cabined and screened for reliable indications of harm to the investor. Tax returns should be …

Horse Syndicates As Securities Under Blue Sky Laws, John Coleman Ayers

Kentucky Law Journal

No abstract provided.

Of Lollipops And Law -- A Proposal For A National Policy Concerning Tender Offer Defenses, Ted J. Fiflis

Publications

Early last year, Mesa Petroleum Company made a tender offer for shares of Unocal Corporation in an effort to take over Unocal. Unocal responded by using the "lollipop" defense, which is a discriminatory issuer self-tender offer. Unocal's use of this defense resulted in huge economic losses to many of Unocal's small shareholders who were not knowledgeable about the ramifications of their participation or non-participation in the tender offer. The Delaware Supreme Court upheld Unocal's use of this defense as an appropriate exercise of business judgment. A federal district court in California refused to strike down the lollipop under federal law …

Corporate Secrecy, The Federal Securities Laws, And The Disclosure Of Ongoing Negotiations, J. Robert Brown Jr.

Sturm College of Law: Faculty Scholarship

Few disclosure issues cause more trepidation and anxiety among corpo- rate officials than the disclosure of ongoing negotiations, whether negotia- tions over prospective sales contracts, aquisitions, mergers, or other material developments. Most major arms length agreements are preceded by a period of negotiations tlnt typically take place behind a veil of secrecy. Disclosure is often delaye' :ntil an agreement has been reached. Corporate officials fear that premature disclosure may result in a competitive disadvantage or may jeopardize continuation of the negotiations.

When Is A Car A Bicycle And Other Riddles: The Definition Of A Security Under The Federal Securities Laws, M. Thomas Arnold

Cleveland State Law Review

In Marine Bank v. Weaver, the United States Supreme Court decided that a certificate of deposit purchased from a federally-regulated bank was not, under the circumstances of the case, a security under federal laws. Several recent federal court cases have considered the question of the status of certificates of deposit under factual circumstances somewhat different from Weaver. Two of these cases provide an interesting study of the uncertainty that continues to surround the definition of a security. And despite the lengthy definitions of "security" found in federal securities laws, much uncertainty remains as to exactly what is included within the …

Penalizing Insider Trading: A Critical Assessment Of The Insider Trading Sanctions Act Of 1984, Carole Silver

Articles by Maurer Faculty

No abstract provided.

The Draft Restatement: A Critique From A Securities Regulation Perspective, Douglas C. Michael, Daniel L. Goelzer, Jacob H. Stillman, Elisse B. Walter, Anne H. Sullivan

Law Faculty Scholarly Articles

For the past several years, the American Law Institute has been preparing a proposed revision of the Restatement (Second) of the Foreign Relations Law of the United States (“Draft Restatement”). This article is a critique from a securities regulation perspective of the Draft Restatement's sections 402, 403, 416, 418, 419, 420 and 431.1 In short, the Draft Restatement departs substantially from existing law. It would add dangerous vagueness and uncertainty to the jurisdictional analysis used to determine whether the United States securities laws will be applied to transnational securities activities. In particular, the complicated balancing inquiry required under the Draft …

When Is A Car A Bicycle And Other Riddles: The Definition Of A Security Under The Federal Securities Laws, M. Thomas Arnold

Cleveland State Law Review

In Marine Bank v. Weaver, the United States Supreme Court decided that a certificate of deposit purchased from a federally-regulated bank was not, under the circumstances of the case, a security under federal laws. Several recent federal court cases have considered the question of the status of certificates of deposit under factual circumstances somewhat different from Weaver. Two of these cases provide an interesting study of the uncertainty that continues to surround the definition of a security. And despite the lengthy definitions of "security" found in federal securities laws, much uncertainty remains as to exactly what is included within the …

Tender Offer Litigation And State Law, Mark J. Loewenstein

Publications

The recent spate of hostile takeover battles has focused attention and criticism on the federal securities laws. Most claims of defeated offerors and disappointed shareholders have been based on sections 14(e) and 10(b) of the Securities Exchange Act of 1934. The United States Supreme Court, however, has limited such federal remedies and suggested that plaintiffs bring state-law actions for interference with a prospective economic advantage. Professor Loewenstein discusses this tort, which has not been used widely in this context, and reviews the tort's traditional elements, its formulation in the Restatement (Second) of Torts, and its recent treatment by state courts. …

The Sale Of Business Doctrine: Judicial Exemption From The Federal Securities Laws

Washington and Lee Law Review

No abstract provided.

Rule 10b-5-Application Of The In Pari Delicto Defense In Suits Brought Against Securities Brokers By Customers Who Have Traded On Inside Information, Mark G. Strauch

Vanderbilt Law Review

This Note advocates that courts should permit tipper defendants to assert the in pari delicto defense in private 10b-5 cases against tippee plaintiffs unless one of the first three exceptions to the analytical framework applies. Part II of this Note discusses the purpose and application of the in pari delicto defense and the four situations in which courts have rejected it. Part II also illustrate show courts analyze the in pari delicto defense in contract, anti-trust, and non-10b-5 securities cases. Part III provides a general background on the purpose of the Securities and Exchange Act of 1934 and rule 10b-5, …

Lifting The Cloud Of Uncertainty Over The Repo Market: Characterization Of Repos As Separate Purchases And Sales Of Securities, William F. Hagerty, Iv

Vanderbilt Law Review

In light of the actual and potential financial harm that repo investors faced after failures of several repo market participants,this Note proposes a new legal characterization of repos and argues for adoption of proposed Bankruptcy Code amendments pertaining to repos. Both of these suggestions would give repo investors significant future financial protection without destroying the financially attractive characteristics of repurchase agreements.

Part II of this Note begins laying the foundation for this proposal by discussing current repo market problems that the failures of several repoissiers have exposed.

Part II discusses new policies concerning the appropriate uses of the collateral securities …

An Uneasy Relationship Between The Bankruptcy Reform Act And The Uniform Commercial Code: Delayed And Continued Perfection Of Security Interests, George L. Dawson

UF Law Faculty Publications

The widespread adoption of article 9 of the Uniform Commercial Code in the 1950s and 1960s resulted in an ‘uncertain correlation’ between state personal property security law and the Bankruptcy Act of 1898. Although the Bankruptcy Act of 1898 frequently relied upon existing state law to determine the validity of a secured creditor's interest in the personal property of a bankruptcy debtor, its provisions were more compatible with pre-Code personal property security law. As a result, courts often struggled to reconcile the meanings of the two statutes.

The enactment of the Bankruptcy Reform Act of 1978 held out the promise …

Market Failure And The Economic Case For A Mandatory Disclosure System, John C. Coffee Jr.

Faculty Scholarship

Recent academic commentary on the securities laws has much in common with the battles fought in historiography over the origins of the First World War. The same progression of phases is evident. First, there is an orthodox school, which tends to see historical events largely as a moral drama of good against evil. Next come the revisionists, debunking all and explaining that the good guys were actually the bad. Eventually, a new wave of more professional, craftsmanlike scholars arrives on the scene to correct the gross overstatements of the revisionists and produce a more balanced, if problematic, assessment.

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.

The Illusory Statutory Basis Of Sec Rule 2(E)

Washington and Lee Law Review

No abstract provided.

Section 14(E) Of The Williams Act And The Rule 10b-5 Comparisons, Mark J. Loewenstein

Publications

The passage of the Williams Act in 1968 added a set of provisions to the Securities Exchange Act of 1934 to govern tender offers. In this article, Professor Loewenstein examines the antifraud provision of the Williams Act, codified as section 14(e) of the Securities Exchange Act of 1934, and the development of decisional law under it. After discussing the propriety of inferring a private cause of action from section 14(e), Professor Loewenstein argues that the judiciary's reliance on rule 10b-5 precedents to set the bounds of the 14(e) cause of action is unwarranted. He concludes: 1) that scienter should not …

More About Blue Sky, Richard B. Tyler

Washington and Lee Law Review

No abstract provided.

Stallion Syndicates As Securities, Rutheford B. Campbell Jr.

Kentucky Law Journal

No abstract provided.

Internal Revenue Service Summonses For "Sensitive"Accountants' Papers, Robert G. Nath

Vanderbilt Law Review

Every modern public corporation has obligations of accountability and disclosure to the public and to its shareholders. These accepted duties of disclosure, however, become the source of conflicts when government agencies make unanticipated inquiries of accountants about otherwise private or background data concerning the corporations they audit. This is particularly true when a public corporation's duties of financial accountability, which stem chiefly from securities law requirements and fiduciary duties,evoke the Internal Revenue Service's interest in information that may reveal or be probative of the corporation's tax liability. Most corporate taxpayers and their accountants understand and accept--if only reluctantly--their obligations to …

The Securities And Exchange Commission's Enforcement Program: A Debate On The Enforcement Process, Monroe H. Freedman, Stanley Sporkin

Washington and Lee Law Review

No abstract provided.

Discretionary Commodity Accounts: Are They Securities And Does It Really Matter?

Washington and Lee Law Review

No abstract provided.

Securities Regulation: Improved Financing Alternatives For Small Issuers

Washington and Lee Law Review

No abstract provided.

The Proposed Federal Securities Code: Time To Recognize That Financial Information Becomes Stale, Scott V. Simpson

Fordham Urban Law Journal

This note addresses the Federal Securities Code ("Code"), developed by the American Law Institute ("ALI"). It specifically focuses on the underlying policy of continuous disclosure implemented by the Code, which requires companies to register once and then continuously disclose to the securities marketplace important developments on their financial position. This note poses a question: "At what point does financial information become stale?" It focuses on the nature of stale financial information by reviewing the treatment of staleness in common law fraud and bankruptcy cases. It then analyzes the approach taken with regard to stale financial information in existing securities law. …

The Proposed Federal Securities Code: Time To Recognize That Financial Information Becomes Stale, Scott V. Simpson

Fordham Urban Law Journal

This note addresses the Federal Securities Code ("Code"), developed by the American Law Institute ("ALI"). It specifically focuses on the underlying policy of continuous disclosure implemented by the Code, which requires companies to register once and then continuously disclose to the securities marketplace important developments on their financial position. This note poses a question: "At what point does financial information become stale?" It focuses on the nature of stale financial information by reviewing the treatment of staleness in common law fraud and bankruptcy cases. It then analyzes the approach taken with regard to stale financial information in existing securities law. …