Banking and Finance Law Commons^™

Risk And Reputation, Taylor J. Wilson

Michigan Law Review

Direct listing is an innovative alternative to a traditional initial public offering. Since direct listing was revived in 2018, there have been many lingering questions, particularly about the liability of financial advisors involved in the process. In a traditional IPO, a company retains an investment bank as an underwriter; the underwriter takes on a degree of financial risk and lends credibility to the company’s offering, often directly marketing the offering to potential investors. In a direct listing, however, investment banks act as financial advisors but do not assume financial risk or market the sale of securities. Section 11 is an …

The Development Of The American “Security Interest” And Its Effect On The International Harmonization Of Security Rights, Henry Gabriel

Brooklyn Journal of Corporate, Financial & Commercial Law

No abstract provided.

The Internet Is For Porn…Or Is It? Fair Access To Financial Services And The Need For Onlyporn Legislation, Emily Pollak

Brooklyn Journal of Corporate, Financial & Commercial Law

Historically, the pornography industry has been the target of countless attempts to delegitimize sex work, but it still endures as a legal industry. Nevertheless, financial service providers such as banks and third-party payment processors have circumvented providing the industry fair access to their services, under vague pretexts such as reputational risk. While porn is not the only marginalized industry affected by unfair treatment from financial service providers, it is among the most targeted. This note gives context to this issue and provides that access to the global marketplace should not be limited by financial institutions functioning as de facto legislators, …

"Keep To The Code”: A Global Code Of Conduct For Third-Party Funders, Victoria Sahani

Faculty Scholarship

Global commercial third-party funding has given rise to wide-ranging regulatory approaches worldwide. Consequently, funders can engage in cross-border regulatory arbitrage by exploiting regulatory gaps within and among nations. This Article argues that the global community of nations should articulate a universal approach to the behavioral expectations of third-party funders operating transnationally, independent of local laws regarding the technical business of funding. It asserts that the key to fostering the ethical development of the third-party funding industry is to develop a globally applicable but locally enforced code of conduct or professional responsibility for the industry. Moreover, a successful regime for funder …

The Private Law Of Stablecoins, Kara J. Bruce, Christopher K. Odinet, Andrea Tosato

Faculty Scholarship

Stablecoins are one of the cornerstones of the crypto world. They’ve attracted significant attention over the past few years, ranging from Wall Street to kitchen table investors, and even the White House. As a less volatile alternative to crypto-assets like bitcoin, stablecoins have the potential to change the way we make payments, unlock the groundwork needed for more blockchain-based applications, and even reorient the economy toward private money. But how stable are these stablecoins, really? Can they be relied upon in the way their many proponents claim? And how much of the popular beliefs about stablecoins match their realities? That’s …

Freeports: An Introduction To The Next Battleground Of International Tax Avoidance, Charles F. Whitten

SLU Law Journal Online

Freeports, special zones that offer favorable tax policies to goods being housed therein, are quietly and quickly becoming a favored investment tactic used by the ultra-wealthy. In this article, Charles F. Whitten discusses how freeport expansion threatens to unravel international efforts to combat tax avoidance and money laundering.

Beware The Proposed Us Crypto Regulation— It May Be A Trojan Horse, Hilary J. Allen

Popular Media

Following the spectacular failure of crypto exchange FTX International, there have been renewed calls for crypto legislation (including from the industry itself).But many of the proposals so far would be worse than the status quo — at least for the general public. Crypto firms such as FTX were involved in drafting many of the mooted US bills. The exchange’s implosion should not become a pretext for rushing these into law.

Law School News: Omshehe Wins Top National Prize With Securities Regulation Article 11-4-2022, Michael M. Bowden

Life of the Law School (1993- )

No abstract provided.

Navigating The Non-Fungible Token, Kimberly A. Houser, John T. Holden

Utah Law Review

$91.8 million, $69 million, and $52.7 million. These are the amounts associated with the three most sought after Non-Fungible Tokens (NFTs) sold in 2021. Although NFTs were first created in 2014, 2021 saw a massive rise in their global popularity. In fact, Google reported that in 2021, “How to buy an NFT?” was one of its most searched questions.

NFTs can alternatively represent a collectible, a financial instrument, or a permanent record associated with a person, physical or digital object, or data—each presenting an entirely distinct set of legal issues. The lack of governmental expertise in emerging technologies accompanied by …

Regulating Global Stablecoins: A Model-Law Strategy, Steven L. Schwarcz

Vanderbilt Law Review

Digital currencies have the potential to improve the speed and efficiency of the payment system. The principal challenge is retail: to facilitate day-to-day payments among consumers as an alternative to cash, both domestically and across national borders. Two models of digital currencies are becoming viable: central bank digital currencies and nongovernment-issued currencies that are backed by assets having intrinsic value (stablecoins or, when widely used internationally, global stablecoins). Because they are not government issued, global stablecoins present complex and novel cross-border regulatory challenges, including managing the costs of complying with a multitude of national laws and ensuring international legal enforceability. …

A New Age Of Antitrust: How The Latest Ftc Leadership Is Rewriting The Rules, Sara Rutherford

SLU Law Journal Online

The addition of a new Chair of the United States Federal Trade Commission has brought major changes relating to Big Tech. In this article, Sara Rutherford discusses the FTC's new anti-trust policies and their application to big companies.

Sanctions, Financial Regulation, And Crypto In Latin America, Camilla Oliva

Cardozo International & Comparative Law Review

The note examines the intersection of corruption, financial regulation, and cryptocurrency in Latin America, arguing that U.S. sanctions and the lack of effective financial regulation have inadvertently enabled corruption in the region. It explores how cryptocurrencies, while offering potential solutions to financial instability, are also exploited by corrupt actors and governments to circumvent sanctions and regulatory frameworks. The analysis highlights the dual role of cryptocurrencies as both a tool for financial inclusion and a means of evading accountability, particularly in countries like Venezuela and El Salvador.

Time To Repay Or Time To Delay? The Effect Of Having More Time Before A Payday Loan Is Due, Paige Marta Skiba, Susan Payne Carter, Kuan Liu, Justin Sydnor

Vanderbilt Law School Faculty Publications

We examine the effect of state laws on minimum payday loan durations that give some borrowers an additional pay cycle to repay their initial loan with no other changes to contract terms. Neoclassical models predict this “grace period” would reduce borrowers’ need for costly loan rollovers. However, in reality, borrowers’ repayment behavior with grace periods is very similar to borrowers with shorter loans, merely pushed out a few weeks. Potential explanations include heuristic repayment decisions and naïve present focus. A calibrated model suggests that present-focused borrowers get less than one-half of the benefit from a grace period that time-consistent borrowers …

Green, Or Greed? A Fresh Perspective On The Valuation Of Conservation Easements, Alan L. Feld, Jacob Nielson, Theodore S. Sims

Faculty Scholarship

Charitable contributions of "conservation easements" have since 1980 allowed high-income taxpayers to shelter income from taxation through overvalued deductions. Overvaluation has increased dramatically in the past 20 years: a 2016 study of all easement decisions since 1980 reported that while overvaluation had averaged by a factor of two before 1994, it averaged by a factor of ten for decisions between 1994 and 2016. SOI data disclose that aggregate easement contributions deducted on Schedule A grew from $2.26 billion in 2015 to $6.5 billion in 2018 (the most recent year available). A recent report by supporters of conservation easements acknowledges that …

Taming Unicorns, Matthew Wansley

Articles

Until recently, most startups that grew to become valuable businesses chose to become public companies. In the last decade, the number of unicorns—private, venture-backed startups valued over one billion dollars—has increased more than tenfold. Some of these unicorns committed misconduct that they successfully concealed for years. The difficulty of trading private company securities facilitates the concealment of misconduct. The opportunity to profit from trading a company’s securities gives short sellers, analysts, and financial journalists incentives to uncover and reveal information about misconduct the company commits. Securities regulation and standard contract provisions restrict the trading of private company securities, which undermines …

Protecting What Matters: Reflections On A Central Bank's Role At Times Of War, Iris H-Y Chiu, Alan H. Brener

Vanderbilt Journal of Transnational Law

This Article explores the important and multifaceted roles of a central bank in extraordinary times of crisis such as war, focusing on the National Bank of Ukraine (NBU) and its responses in the face of the Russian invasion of Ukraine which began on February 24, 2022. During a time of martial law, institutional preservation and legitimacy can be threatened, but preserving these very institutional tenets is important in defending the nation under siege and in securing future restoration and rebuilding. In this light, we examine the NBU's difficult and conflicting choices in three respects: providing war finance, preserving banking and …

Gravity And Grace: Foreign Investments And Cultural Heritage In International Investment Law, Valentina Vadi

Vanderbilt Journal of Transnational Law

Globalization and international economic governance have promoted dialogue and interaction among nations, potentially increasing cultural diversity and providing the funds to recover and preserve cultural heritage. However, these phenomena can also jeopardize cultural diversity. Foreign direct investments in the extraction of natural resources have the potential to change cultural landscapes, destroy monuments, and erase memories. In parallel, international investment law constitutes a legally binding and highly effective regime that demands that states promote and facilitate foreign direct investment. Does the existing legal framework adequately protect cultural heritage vis-a-vis the economic interests of foreign investors? To address this question, this Article …

On The Misuse Of Regressions Of Price On The Hhi In Merger Review, Jonathan Baker

Scholarly Articles in Law Reviews & Journals

The article explains why regressions of price on HHI should not be used in merger review. Both price and HHI are equilibrium outcomes determined by demand, supply, and the factors that drive them. Thus, a regression of price on the HHI does not recover a causal effect that could inform the likely competitive effects of a merger. Nonetheless, economic theory is consistent with the legal presumption that a merger is likely to have adverse competitive effects if it occurs in a concentrated market and makes that market more concentrated.

Special Purpose Acquisition Companies (Spacs) And The Sec, Neal Newman, Lawrence J. Trautman

Faculty Scholarship

Special Purpose Acquisition Companies (SPACs) are simply enterprises that raise money from the public with the intention of purchasing an existing business and becoming publicly traded in the securities markets. If the SPAC is successful in raising money and the acquisition takes place, the target company takes the SPAC’s place on a stock exchange in a transaction that resembles a public offering. Also known as “blank-check” or “reverse merger” companies, this process avoids many of the pitfalls of a traditional initial public offering.

During late 2020 and 2021 an unprecedented surge in the popularity and issuance of Special Purpose Acquisition …

A Proposed Sec Cyber Data Disclosure Advisory Commission, Lawrence J. Trautman, Neal Newman

Faculty Scholarship

Constant cyber threats result in: intellectual property loss; data disruption; ransomware attacks; theft of valuable company intellectual property and sensitive customer information. During March 2022, The Securities and Exchange Commission (SEC) issued a proposed rule addressing Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure, which requires: 1. Current reporting about material cybersecurity incidents; 2. Periodic disclosures about a registrant’s policies and procedures to identify and manage cybersecurity risks; 3. Management’s role in implementing cybersecurity policies and procedures; 4. Board of directors’ cybersecurity expertise, if any, and its oversight of cybersecurity risk; 5. Registrants to provide updates about previously reported cybersecurity …