Securities Law Commons^™

Updating The Trust Indenture Act, Howard M. Friedman

University of Michigan Journal of Law Reform

Holders of publicly distributed debt securities are, in essence, parties to contracts of adhesion. There is no opportunity for a purchaser of a debt security to negotiate the terms of his loan to the issuer. In addition, because there are a large number of geographically scattered small lenders, each of them is placed in a particularly vulnerable position. While lenders traditionally have numerous methods of protecting their interests, creditor protection is ineffective unless responsibility for enforcement is centralized. Widely scattered security holders find it difficult to police compliance with covenants in the loan agreement and to coordinate legal action in …

Intrastate Offerings Under Rule 147, J. William Hicks

Michigan Law Review

In an effort to publicize administrative and judicial interpretations of the exemption, to protect investors, and to provide more certainty in determining the parameters of section 3(a)(ll), the SEC has adopted rule 147. This Article, in three parts, will examine that rule. Part I is devoted to an explanation of the rule; it will indicate how the rule differs from earlier interpretations of section 3(a)(ll) and discuss the problems that the rule leaves unanswered. Part II will consider the interrelationships among the various sections of the rule, as well as interpretative issues that have not yet arisen under section 3(a)(ll). …

Insider Liability For Short-Swing Profits: The Substance And Function Of The Pragmatic Approach, Michigan Law Review

Michigan Law Review

This Note will discuss the inquiries encompassed by the "possibility of abuse" test. It will also evaluate whether the test is properly employed only in determining that an unorthodox transaction is or is not a "purchase" or "sale" or whether the test could better be used as a threshold inquiry in all cases.

Securities Regulation In The United Kingdom: A Comparison With United States Practice, Robert L. Knauss

Vanderbilt Journal of Transnational Law

The most important securities market outside the United States is that of the United Kingdom. In both countries, the securities markets play a similar role and provide a viable method for the formation of capital. There are, however, a number of fundamental as well as practical differences in the methods by which the two countries have chosen to regulate their securities markets. This article will examine the current method and extent of securities regulation in the United Kingdom. In order to highlight certain aspects of the regulatory pattern and to make the system more comprehensible to American attorneys, this inquiry …

Tender Offers For Corporate Control, Martin Lipton

Michigan Law Review

A Review of Tender Offers for Corporate Control by Edward Ross Aranow and Herbert A. Einhorn

An Analysis Of Recent Proposals For Reform Of Federal Securities Legislation, William H. Painter

Michigan Law Review

Today the securities industry is in the midst of rapid change. Indeed it has been for at least the past decade, but in recent years the pace of change has increased, and its emphasis has shifted. Legislative and administrative reforms that could not have been anticipated a decade ago are likely in the near future, and it is still impossible to predict accurately the shape of the markets of tomorrow or the rules by which they will be governed. It is the purpose of this Article to focus on these recent developments, to summarize and evaluate various proposals for reform, …

Res Judicata In The Derivative Action: Adequacy Of Representation And The Inadequate Plaintiff, Michigan Law Review

Michigan Law Review

It is the purpose of this Note to examine the adequacy of representation in a derivative suit and to consider the appropriateness of applying res judicata to foreclose the corporate cause of action. Discussion will focus on the following areas: (1) the problem of the inadequate plaintiff; (2) the efficacy of judicially created devices designed to ensure the adequacy of representation; and, (3) the feasibility of partially exempting the derivative cause of action from the operation of res judicata.

Securities Law--Prospectus Must Reflect Developments Subsequent To Effective Date Of Registration Statement To Meet Requirements Of Section 10(A) Of Securities Act Of 1933--Sec V. Manor Nursing Centers, Inc.*, Michigan Law Review

Michigan Law Review

Manor Nursing Centers, Inc., made a public offering of 450,000 shares of its common stock at a price of ten dollars per share. Under the provisions of the Securities Act of 1933, a registration statement containing a prospectus was filed with the Securities and Exchange Commission. These documents represented that the offering would be on a best efforts, "all-or-nothing" basis-that is, if all the 450,000 shares were not sold by a specified selling deadline, the proceeds of any sales would be returned to subscribers. The prospectus stated that subscribers' funds would be segregated in an escrow account and that arrangements …

Securities Regulation In Switzerland, Roger Dagon

Vanderbilt Journal of Transnational Law

The Swiss system of securities regulation, to the extent that it exists at all, is primarily a system of self-regulation. The basic company law, the Code des obligations of 1911, as amended, which enumerates the minimum disclosure requirements for public offerings of foreign or domestic debt securities and for public offerings of new shares of domestic corporations, represents the only formal regulation of corporate issues. The Code exempts secondary offerings of outstanding shares as well as initial issues of foreign shares. Secondary offerings of outstanding shares and issues of new foreign shares, however, must comply with the prospectus requirements established …

Warrants In Bond-Warrant Units: A Survey And Assessment, Henry B. Reiling

Michigan Law Review

This Article surveys the warrant in the context of a bond-warrant unit (the typical medium of issuance), and in four main subdivisions assesses (I) the warrant's role in corporate finance, and several major implications and features of its use today for (II) shareholders of the prospective issuer, (III) warrant holder, and (IV) issuer. The present status of the warrant as a highly significant mode of financing requires that particular attention be given to the justification for the issuance of warrants in the light of earlier authoritative criticism, and to the tax consequences and concepts now attending their use. Fortunately, several …

Recent Cases, Law Review Staff

Vanderbilt Law Review

RECENT CASES

Antitrust--Sham Exception--Allegations of Purposeful and Concerted Use of Adjudicatory Processes to Harass and Deter Parties From Having Free Access to These Processes Constitute a Cause of Action Under Antitrust Laws

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Criminal Procedure--Confessions--Determination of Confession's Voluntariness by Preponderance of the Evidence Is Not Violative of Fifth Amendment Prohibition Against Self-Incrimination

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Landlord and Tenant--Forcible Entry and Detainer Statute--Provisions for Immediate Trial and Limitation of Triable Issues Not Violative of Due Process or Equal-Protection Clauses

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Securities Regulation-Section 16(b) of Securities Exchange Act of 1934--Insider May Sell Enough Stock To Bring His Holdings Below Ten Percent and Within Six …

Duties Of The Independent Director In Open-End Mutual Funds, Michigan Law Review

Michigan Law Review

This Comment will analyze the role of independent directors in open-end mutual funds. It will consider the potential impact of recent decisions and statutory amendments and explore the possibilities of a more significant role for such directors. The discussion will focus on the following aspects of the directors' role: (1) the duty to review contractual arrangements between the fund and the external adviser; (2) the duty to serve as a "watchdog" over fund policy, brokerage allocation on portfolio transactions, and miscellaneous fund operations; and (3) the responsibilities upon the sale or merger of the investment adviser. In order to appreciate …

Baruch: Wall Street: Security Risk, Lewis D. Lowenfels

Michigan Law Review

A Review of Wall Street: Security Risk by Hurd Baruch

Federal Income Taxation--Section 165 (C) Loss Allowed For Securities Loaned To Brokerage Firm That Subsequently Became Insolvent And Sold The Securities To Meet The Claims Of Creditors--Stahl V. United States, Michigan Law Review

Michigan Law Review

It is frequently said that there are only two certainties in life: death and taxes. The Court of Appeals for the District of Columbia Circuit recently upheld a district court decision that considerably eased the latter burden for plaintiff-taxpayer in Stahl v. United States. On April 12, 1962, Mrs. Stahl, a widowed musician and music teacher, reached an agreement with Balough & Company (Balough), a Washington securities firm, under which she was to surrender to it control of securities with a market value of approximately $210,000. Balough used the securities to meet the minimum capital requirements for brokerage firms established …

The Public-Interest Proxy Contest: Reflections On Campaign Gm, Donald E. Schwartz

Michigan Law Review

Proxy contests are generally fought for control of a corporation. The rules governing this form of corporate combat seek to provide shareholders with adequate information about the rival forces for control so that they can intelligently choose between them. The information furnished in proxy materials and discussions at annual meetings have traditionally been devoted almost entirely to subjects such as finance, production, acquisitions, and the like.

Securities Regulation--Damages--The Possibility Of Punitive Damages As A Remedy For A Violation Of Rule 10b-5, Michigan Law Review

Michigan Law Review

Several lower federal courts have recently been faced with this issue and have reached conflicting results in their attempts to resolve it. This Note will examine both the problems of statutory interpretation and the policy considerations that are involved in deciding whether punitive damages should be awarded in civil actions based on violations of rule I0b-5.

Reform Of The Blue Sky Laws, James S. Mofsky

Vanderbilt Law Review

Some constructive recommendations can be made to generate meaningful reform of the blue sky laws within the states themselves. In this regard, it is important to separate those persons who would be in favor of revision as discussed in this article from those who would be opposed. As previously mentioned, corporate officials and businessmen associated with small firms directly affected by the blue sky laws would probably advocate reform, as would the investment bankers who underwrite such firms. These persons and firms must have substantial political muscle if they are to achieve significant results in the state capitols. Such strength …

Recent Cases, Law Review Staff

Vanderbilt Law Review

Criminal Law--Habeas Corpus-State Prison Regulation Prohibiting Prisoner from Preparing Petition for Fellow Inmates Held Invalid in Absence of Alternative Means of Assistance

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Securities Regulation--Corporation as a Director for the Purposes of Section 16(b) of the 1934 Securities Exchange Act

Jennings & Marsh, Jr: Securities Regulation: Cases And Materials (2d Ed.), Homer Kripke

Michigan Law Review

A Review of Securities Regulation: Cases and Materials (2d ed.) by Richard W. Jennings and Harold Marsh, Jr.

The Problems: An Overview, Mark S. Massel

Vanderbilt Journal of Transnational Law

Securities regulation -- domestic and foreign -- has a technical fascination for the lawyer, whether he be a practicing attorney, corporate counsel, government regulator, or legal scholar. The intricate detail of the primary regulations and of their subsidiary byways provide opportunities for stimulating mental gymnastics. The piecing together of the various phases provides interesting occasions for experimentation, speculation, and analyzation.

Yet, a preoccupation with securities regulation which overlooks the setting can produce mere academic exercise. The need for an appreciation of the setting is all-important in examining foreign securities regulation. In considering United States securities regulation we do not need …

Manne: Insider Trading And The Stock Market, Harold Marsh Jr.

Michigan Law Review

A Review of Insider Trading and the Stock Market by Henry G. Manne

Israels And Guttman: Modern Securities Transfers, Berto Rogers

Michigan Law Review

A Review of Modern Securities Transfers by Carolos L. Israels and Egon Guttman

Current Problems In Securities Regulation, Robert N. Dorosin, Ira J. Jaffe, Rolfe A. Worden, James C. Lockwood, Willoughby C. Johnson

Michigan Law Review

This comment analyzes four areas of central significance to adequate protection for the investor: (1) qualifications of those in the securities industry who deal with the public; (2) dissemination of corporate publicity; (3) dissemination of investment advice; and (4) selling practices in the securities industry. The findings and recommendations of the Special Study are given special attention insofar as they bear upon the problems covered. In certain areas, however, recent developments in court and Commission decisions have brought about changes equally as significant as the findings and recommendations of the Special Study. Thus each section covers the background and recent …

New Books And Recent Scholarship, F. Hodge O'Neal, Jordan Derwin, C. Edwin Chapman, Jr.

Vanderbilt Law Review

The years since World War II have brought extensive developments in the field of corporation law and practice. Many states have enacted a completely new corporation statute' or a new blue sky law. At the same time, "federal corporation law" and federal securities regulation have grown substantially. Legislatures and courts in many states have given some recognition to the distinctive problems of the close corporation. A number of highly publicized proxy fights have spurred developments in the law applicable to the proxy system. Some courts have enunciated interesting legal principles applicable to the sale of corporate control. And just last …

Choka: An Introduction To Securities Regulation, Laylin K. James

Michigan Law Review

A Review of An Introduction to Securities Regulation. By Allen D. Choka

Loss & Cowett: Blue Sky Law, Homer D. Crotty

Michigan Law Review

A Review of Blue Sky Law. By Louis Loss and Edward W. Cowett.

The Ohio "Blue Sky" Cases, Clarence D. Laylin

Michigan Law Review

The ancient notion that private fraud lies beyond the domain of public law did not long survive the statements of it that have been quoted.' Our legislation, expressing always the changing moral standards of the people, has directed the sanctions of the criminal law, step by step, ever against new forms of overreaching and imposition. Numerous illustrations might be cited to show the growing repugnance of the public mind toward frauds and cheats, and the tendency to recognize them as offenses invoking the restraint of public action as well as the redress of private injuries.