Securities Law Commons^™

Realigning Corporate Governance: Shareholder Activism By Labor Unions, Stewart J. Schwab, Randall S. Thomas

Michigan Law Review

Labor unions are active again - but this time as capitalists. The potential strength of union pension funds has long been noted, but until recently unions have held their stock passively or invested in union-friendly companies. In the 1990s, however, unions have become the most aggressive of all institutional shareholders. In most cases, it is hard to find a socialist or proletarian plot in what unions are doing with their shares. Rather, labor activism is a model for any large institutional investor attempting to maximize return on capital. Unions, union pension funds, individual union members, and labor-oriented investment funds are …

Theories Of The Corporation And The Limited Liability Company: How Should Courts And Legislatures Articulate Rules For Piercing The Veil, Fiduciary Responsibility And Securities Regulation For The Limited Liability Company, David L. Cohen

Oklahoma Law Review

No abstract provided.

The Securities Litigation Uniform Standards Act Of 1998: The Sun Sets On California's Blue Sky Laws, David M. Lavine, Adam C. Pritchard

Articles

It is often said that California sets the pace for changes in America's tastes. Trends established in California often find their way into the heartland, having a profound effect on our nation's cultural scene. Nouvelle cuisine, the dialect of the Valley Girl and rollerblading all have their genesis on the West Coast. The most recent trend to emerge from California, instead of catching on in the rest of the country, has been stopped dead in its tracks by a legislative rebuke from Washington, D.C. California's latest, albeit short-lived, contribution to the nation was a migration of securities fraud class actions …

Judge Friendly And The Law Of Securities Regulation: The Creation Of A Judicial Reputation, Margaret V. Sachs

Scholarly Works

Few judges are more revered than the late Henry J. Friendly, a member of the United States Court of Appeals for the Second Circuit from 1959 to 1986. Leading jurists and scholars have described him as "one of our wisest judges," "a legend in his own time," "the most remarkable legal mind of his generation," "the pre-eminent appellate judge of his era," and "the most distinguished judge in this country during his years on the bench."

Are great judicial reputations-like great literary and scientific reputations- also shaped by contingencies? Or does the legal profession for some reason stand apart? This …

Brave New World?: The Impact(S) Of The Internet On Modern Securities Regulation, John C. Coffee Jr.

Faculty Scholarship

It is now a trite commonplace that the advent of the Internet will in time revolutionize securities regulation. Merely the facts that the Internet has somewhere between thirty and sixty million users worldwide today (with an estimated ten to thirty million in the United States) and that some 800,000 U.S. investors already have online brokerage accounts establish that there is a potential global market that can be accessed at very low cost. But the magnitude of the market says little about what will be the character and effect of this approaching revolution.

Technological change is not a new phenomenon for …

Securitization Of State Ownership: Chinese Securities Law, Minkang Gu, Robert C. Art

Michigan Journal of International Law

Part I of this article establishes the scope of analysis and defines the Chinese use of the term "security," which is more limited than under American law. Parts II and III briefly examine the history of Chinese securities laws and the understanding of securities by the Chinese people. Part IV focuses on the government's motivations in establishing the securities markets. Part V discusses the distinctively Chinese approach of classifying shares according to the characteristics and nationality of permitted shareholders. Part VI addresses the future development of Chinese securities markets. The conclusion reflects on the significance of western forms of securities …

The Obsolescence Of Wall Street: A Contextual Approach To The Evolving Structure Of Federal Securities Regulation, Joel Seligman

Michigan Law Review

As a matter of analytical style, this article illustrates a contextualist approach. For a considerable period of time, the dominant analytical style in corporate and securities .law has been a variant of economic, or law and economics, analysis. The virtue of this type of analysis is that it focuses on what its authors deem to be crucial variables and reaches conclusions derived from the core of a specific legal problem. The defect of this type of analysis is that so much is assumed or often assumed away.

Hail Britannia?: Institutional Investor Behavior Under Limited Regulation, Bernard S. Black, John C. Coffee Jr.

Michigan Law Review

The two authors of this article have been on opposite sides of this debate, but both recognize that no single explanation is complete and that other factors, such as the self-interest of fund managers, the conflicts of interest faced by institutions who want to retain corporate business, cultural forces, collective action problems, and what we can call path dependence- the difficulty of changing the structure and behavior of highly evolved and specialized institutions - have causal roles in explaining shareholder passivity. The central question in research on American corporate governance is how these forces interact to produce the characteristic …

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

Michigan Law Review

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 …

A Monument To A Regulatory System, Norman S. Poser

Michigan Law Review

A Review of Securities Regulation by Louis Loss and Joel Seligman

The Listing Of Daimler-Benz Securities On The Nyse: Conflicting Interests And Regulatory Policies, J. William Hicks

Articles by Maurer Faculty

No abstract provided.

French & Sec Securities Regulation: The Search For Transparency And Openness In Decisionmaking, Keith D. Nunes, Louis Vogel, Chris X. Linn, Peter C. Kostant

Vanderbilt Journal of Transnational Law

In this Article, the authors retrace the history and development of France's securities markets. The authors find that the French markets have become dynamic and diverse in the wake of their modernization. In contrast to the passivity of the United States regulatory regime, the authors demonstrate that the role of French regulators is more aggressive and intrusive. The authors also note that, through directives seeking to coordinate the policies of member states, the European Economic Community serves as the world's leading securities regulator. The authors conclude that French securities laws have been successful in improving disclosure and market efficiency. But …

Augmenting Erisa With Market Discipline: Transforming Pension Plan Interests Into Securities, Keir N. Dougall

University of Michigan Journal of Law Reform

Part I of this Note provides general background information about pension plans and details the problems that ERISA creates because of its dependence on trust law. Part II canvasses recent problems in pension plan governance that courts and pension plan members have faced in takeover defense and social investment contexts, demonstrating that ERISA's use of trust law cannot respond adequately to these problems. Parts I and II draw on an analysis of ERISA presented by Professors Fischel and Langbein but argue that their proposals for changing ERISA inadequately address the problems they identify. Part III argues that the economic realities …

Case Digest, Law Review Staff

Vanderbilt Journal of Transnational Law

MEDICAL MALPRACTICE ABROAD BY UNITED STATES PHYSICIAN IN CONNECTION WITH DEPARTMENT OF STATE REGULATIONS GOVERNING TORT CLAIMS PROVIDED FOR AN INVESTIGATIVE PROCEDURE FOLLOWED BY AGENCY DECISION--AGENCY FOR INTERNATIONAL DEVELOPMENT HOLDS NO CONSTITUTIONAL OBLIGATIONS TO EVALUATE MEDICAL MALPRACTICE CLAIM ON THE MERITS AND IN ACCORD WITH MINIMAL DUE PROCESS. Tarpeh-Doe v. United States, 904 F.2d719 (D.C. Cir. 1990).

THE FOREIGN CORRUPT PRACTICES ACT DOES NOT CREATE AN IMPLIED PRIVATE RIGHT OF ACTION THAT KENTUCKY TOBACCO GROWERS COULD USE TO RECOVER DAMAGES FROM COMPANIES THAT ALLEGEDLY ENGAGED IN CORRUPT PRACTICES TO THE DETRIMENT OF GROWERS. THE ACT OF STATE DOCTRINE, HOWEVER, DOES …

Books Received, Law Review Staff

Vanderbilt Journal of Transnational Law

Books Received

GOOD FAITH IN ENGLISH LAW

By J.F. O'Connor

Brookfield, Vermont: Dartmouth Publishing Company, 1990. Pp. 148.

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LAW AND ISLAM IN THE MIDDLE EAST

Edited by Daisy Hilse Dwyer

New York, New York: Bergin & Garvey, 1990. Pp. 168.

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INTERNATIONAL SECURITIES REGULATION

By Norman S. Poser

Boston, Massachusetts: Little, Brown and Company, 1991. Pp. 799.

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COMPARATIVE CONSTITUTIONAL FEDERALISM

Edited by MarkTushnet

Westport, Connecticut: Greenwood Press, 1990. Pp. 157.

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ECONOMIC SANCTIONS AND U.S. TRADE

By Michael P. Melloy

Boston, Massachusetts: Little, Brown and Company, 1990. Pp. 752.

Shareholder Passivity Reexamined, Bernard S. Black

Michigan Law Review

This article argues that shareholder monitoring is possible: It's an idea that hasn't been tried, rather than an idea that has failed. I defer to a second article currently in draft the question of whether more monitoring by institutional shareholders is desirable. Will direct shareholder oversight, or indirect oversight through shareholder-nominated directors, improve corporate performance, prove counterproductive, or, perhaps, not matter much one way or the other? What are the benefits and risks in giving money managers - themselves imperfectly monitored agents - more power over corporate managers? If more shareholder voice is desirable, how much more and …

The Unimportance Of Being Efficient: An Economic Analysis Of Stock Market Pricing And Securities Regulation, Lynn A. Stout

Michigan Law Review

Part I of this article describes how perceptions that market efficiency is an important regulatory objective have influenced the development of securities law. For illustration, Part I examines the role of market efficiency goals in recent debates on the scope of insider trading liability, on trading in stock index futures, and on mandatory disclosure of merger negotiations. Part II then evaluates the notion that more efficient stock markets necessarily produce more optimal resource allocation. A closer look at the economic consequences of stock prices suggests that the principal function of stock prices is not resource allocation but rather the redistribution …

Auditor Changes And Opinion Shopping- A Proposed Solution, Dale R. Rietberg

University of Michigan Journal of Law Reform

This Note argues that the existing regulatory mechanism has failed to address adequately the problem of opinion shopping, and that better means of ensuring the reliability of financial statements are needed. Part I describes the nature and extent of the opinion-shopping problem, including a discussion of its larger, macroeconomic impact. Part II argues that the underlying causes of the problem are systemic and that present safeguards against opinion shopping are inadequate. Finally, Part III examines some alternative solutions and proposes a system of Accounting Issue Inquiry Centers under the direction and auspices of the SEC. These Centers would be designed …

The Regulation Of Insider Trading In The United States, United Kingdom, And Japan, Barbara Ann Banoff

Michigan Journal of International Law

Part I of this article will briefly discuss the American laws regulating insider trading; Part II will discuss the law of the United Kingdom; and Part III will discuss the regulation-or, more accurately, the non-regulation-of insider trading in Japan.

The Internationalization Of The Securities Markets: Preface To A Symposium, Joel Seligman

Michigan Journal of International Law

This preface begins by tracing certain of the initial steps taken by the SEC in the internationalization of securities trading. Regulations involving issuers of new securities are discussed in two contexts. First, when foreign private issuers offer securities into the United States, and second, when securities are simultaneously offered in the United States and abroad. The preface concludes by introducing each of the articles in this symposium.

Securities Regulation In The International Marketplace: Bilateral And Multilateral Agreements, Daniel L. Goelzer, Anne Sullivan, Robert Mills

Michigan Journal of International Law

This article examines the experience of the SEC in securities regulation with respect to the international securities markets, focusing first as background upon recent developments in those markets, and then on the actual regulation of issuer disclosure, the trading markets, and enforcement in general. In each of the latter three areas, the article will consider the Commission's direct domestic actions in response to international trade, and compare those with international approaches to establish standards in these areas. This comparison demonstrates that international cooperation can, and should, develop new protections and predictable, common themes of regulation, for disclosure, market regulation, and …

Survey Of National Legislation Regulating Insider Trading, Mary J. Houle

Michigan Journal of International Law

In recent years much attention has been focused on the phenomenon of "insider trading." The United States Securities and Exchange Commission (SEC) now appears to have wide-spread public support for its hard-line approach toward insider trading practices. Previously hostile to a broad prohibition of insider trading, even the Supreme Court has lent a sympathetic ear to the pleas of the SEC in the recent Carpenter case, which hinted at support for the misappropriation theory of insider trading. The prevailing attitude is that confidence in the fair operation of the securities markets must not be undermined by insiders who deprive those …

Survey Of Registration And Disclosure Requirements In International Securities Markets, Scott D. Cohen

Michigan Journal of International Law

This survey of the domestic registration and disclosure requirements in the United Kingdom, the Federal Republic of Germany, France, Australia, Switzerland, the Netherlands, Canada, and Japan provides a topical overview of the institutions, requirements, and procedures involved in securities trading in foreign markets. While the goal of a unified international securities regulation system may represent the best long-term course for an efficient world-wide system of capital markets, the necessity to conform to domestic securities regulations will remain important in the coming years.

The Changing Structure Of The Securities Markets And The Securities Industry: Implications For International Securities Regulation, Aulana L. Peters, Andrew E. Feldman

Michigan Journal of International Law

This article addresses the impact internationalization has had on the world's securities markets with a particular focus on its role in forcing change in the structure of those markets. Part I describes the forces involved in the internationalization process, and analyzes capital movement and other phenomena that demonstrate the extent of internationalization. Next, it reviews the structural changes that securities markets and the securities industry have made in response to the internationalization process. Part II analyzes the measures regulators have taken to address the implications of those developments. Part III discusses the October Market Break and how it illustrates the …

Chinese Wall Or Emperor's New Clothes? Regulating Conflicts Of Interest Of Securities Firms In The U.S. And The U.K., Norman S. Poser

Michigan Journal of International Law

This article has two principal theses. The first is that, while Chinese Walls of securities firms are undoubtedly useful in some instances in preventing the flow of confidential information, the evidence that they actually do this is insufficient to justify basing a legal defense on the existence of a wall in a particular firm. In fact, it is difficult to avoid the conclusion that at some firms the Chinese Wall is nothing but a convenient fiction aimed at avoiding liability for market abuses. The article's second thesis is that the isolation of information within a department of a firm which …

Capital Neutrality And Coordinated Supervision: Lessons For International Securities Regulation From The Law Of International Taxation And Banking, Charles Thelen Plambeck

Michigan Journal of International Law

Part I of this article provides some background on the legal forces which have influenced globalization and internationalization of the world's securities markets. Part II focuses on the international tax law principle of capital neutrality. Fundamentally, the principle of capital neutrality requires that regulations should not unintentionally direct the movement of capital. Part II analyzes the bases and parameters of the principle of capital neutrality, the experiences of international taxation in applying the principle to a globalizing economy, and the possibilities for applying the principle to international securities regulation. Part III focuses on the international banking law principle of coordinated …

Closing A Loophole: Insider Trading In Standardized Options, Steve Thel

Fordham Urban Law Journal

This article is a Commentary on a previous Note published in the Fordham Urban Law Journal (Note, Insiders, Options and the Fiduciary Principle: A Rule 10b-5 Loophole, 16 Fordham Urb. L.J. 295 (1988)). The Note argued that the Supreme Court has expressly endorsed only one theory of insider trading liability, in Chiarella v. United States. By the simple expedient of trading options on common stock rather than the common stock itself, an insider can escape Rule 10b-5 liability under Chiarella.

A Study Of Mexico's Capital Markets And Securities Regulation, Samuel Wolff

Vanderbilt Journal of Transnational Law

This Article will analyze Mexico's capital markets and regulations, primarily from an empirical point of view. The discussion will begin with an overview of the Mexican financial and legal systems to provide a context for the analysis of the market and the law. The essay will then discuss the Mexican securities market, including history, participants and characteristics. Finally, Mexico's Ley del Mercado de Valores ("Securities Market Law") will be analyzed." The objective of the study is to increase understanding of the Mexican market by Mexicans and foreigners alike. The study should be useful to policymakers in Mexico and other developing …

Seminar On Securities Law, Office Of Continuing Legal Education At The University Of Kentucky College Of Law, James A. Kegley, H. Alexander Campbell, Gary L. Stage, Ralston W. Steenrod, James C. Strode, Robert P. Ross, Gerald R. Martin, C. Christopher Trower, Willburt D. Ham, Ronda S. Paul, Rodger A. Marting, Oscar N. Persons, Francesca Marciniak, O. Wayne Davis, Rutheford B. Campbell Jr.

Continuing Legal Education Materials

Materials from the UK/CLE Seminar on Securities Law held February 14-15, 1986.

Randall V. B.J. Loftsgaarden, Lewis F. Powell Jr.

Supreme Court Case Files

No abstract provided.