Do The Securities Laws Matter? The Rise Of The Leveraged Loan Market,
2014
Duke Law School
Do The Securities Laws Matter? The Rise Of The Leveraged Loan Market, Elisabeth De Fontenay
Faculty Scholarship
One of the enduring principles of federal securities regulation is the mantra that bonds are securities, while commercial loans are not. Yet the corporate bond and loan markets in the U.S. are rapidly converging, putting significant pressure on the disparity in their regulatory treatment. As securities, corporate bonds are subject to onerous public disclosure obligations and liability regimes, which corporate loans avoid entirely. This longstanding regulatory distinction between loans and bonds is based on the traditional conception of a commercial loan as a long-term relationship between the borrowing company and a single bank, in contrast to bonds, which may be …
From Pigs To Hogs,
2014
Duke Law School
From Pigs To Hogs, Stephen J. Choi, Mitu Gulati
Faculty Scholarship
The question of whether, and to what extent, markets price contract terms in government bond issues has been one of considerable debate in the literature. We use a natural experiment thrown up by the Euro area sovereign debt crisis of 2010-2013 to test whether a particular set of contract terms – ones that gave an advantage to sovereign guaranteed bonds over garden variety sovereign bonds – was priced. These contract terms turned out to be important for the holders of guaranteed bonds during the Greek debt restructuring of 2012, where they helped the holders of guaranteed bonds escape the haircut …
Who Can’T Raise Capital? The Scylla And Charybdis Of Capital Formation,
2014
Duke Law School
Who Can’T Raise Capital? The Scylla And Charybdis Of Capital Formation, James D. Cox
Faculty Scholarship
There has long been complaints that the heavy regulatory hand of Blue Sky Law administrators prevents capital formation by small issuers. Using data recently collected by the SEC, the article reasons that the problems capital starved small issuers encounter is not the state regulator. The problems are elsewhere. The paper explores whether intermediation may ultimately enable more startups to raise needed funds. For this to occur, however, the paper explores the formidable obstacles the broker must overcome in meeting demanding suitability requirements.
Brief Of Financial Economists As Amici Curiae In Support Of Respondents,
2014
Duke Law School
Brief Of Financial Economists As Amici Curiae In Support Of Respondents, Ernest A. Young
Faculty Scholarship
No abstract provided.
Brief Of Common Law Scholars As Amici Curiae In Support Of Respondents,
2014
Duke Law School
Brief Of Common Law Scholars As Amici Curiae In Support Of Respondents, Samuel W. Buell, Deborah A. Demott, James D. Cox, Ernest A. Young, Ann Lipton
Faculty Scholarship
No abstract provided.
Towards A “Rule Of Law” Approach To Restructuring Sovereign Debt,
2014
Duke Law School
Towards A “Rule Of Law” Approach To Restructuring Sovereign Debt, Steven L. Schwarcz
Faculty Scholarship
No abstract provided.
Putting The Securities Laws To The Test: The Long-Standing Approach To Federal Securities Regulation Is Not Working,
2014
Duke Law School
Putting The Securities Laws To The Test: The Long-Standing Approach To Federal Securities Regulation Is Not Working, Elisabeth De Fontenay
Faculty Scholarship
No abstract provided.
The Gathering Storm: Restructuring Sovereign Contingent Liabilities,
2014
Duke Law School
The Gathering Storm: Restructuring Sovereign Contingent Liabilities, Lee C. Buchheit, Mitu Gulati
Faculty Scholarship
The contingent liabilities of a sovereign, such as guarantees of the debts of third parties, can normally be kept off the balance sheet of the sovereign guarantor. That is their charm. As the debt to GDP ratios of many developed countries approach red-zone levels, contingent liabilities are increasingly being favored over direct, on-the-balance-sheet, borrowings.
But what happens if a country carrying large contingent liabilities needs to restructure its debt? The borrower dare not leave its contingent claims out of the restructuring. To do so would risk undermining the financial predicates of the sovereign’s economic recovery program should the beneficiaries of …
Taking Section 10(B) Seriously: Criminal Enforcement Of Sec Rules,
2014
Fordham Law School
Taking Section 10(B) Seriously: Criminal Enforcement Of Sec Rules, Steve Thel
Faculty Scholarship
The Supreme Court has determined the scope of federal securities laws in a series of cases in which it has read section 10(b) of the Securities Exchange Act as either prohibiting certain misconduct or authorizing the SEC to regulate that conduct and only that conduct. Judging by the language, structure and history of the Exchange Act, the Court’s reading is wrong. Section 10(b) does not prohibit anything, and it neither grants the SEC rulemaking power nor limits the rulemaking power granted to the SEC elsewhere in the Exchange Act. Instead, section 10(b) simply triggers criminal sanctions for certain rule violations. …
Nationalization And Necessity: Takings And A Doctrine Of Economic Emergency,
2014
Fordham University School of Law
Nationalization And Necessity: Takings And A Doctrine Of Economic Emergency, Nestor M. Davidson
Faculty Scholarship
Serious economic crises have recurred with regularity throughout our history. So too have government takeovers of failing private companies in response, and the downturn of the last decade was no exception. At the height of the crisis, the federal government nationalized several of the country’s largest private enterprises. Recently, shareholders in these firms have sued the federal government, arguing that the takeovers constituted a taking of their property without just compensation in violation of the Fifth Amendment. This Essay argues that for the owners of companies whose failure would raise acute economic spillovers, nationalization without the obligation to pay just …
Have Institutional Fiduciaries Improved Securities Class Actions? A Review Of The Empirical Literature On The Pslra's Lead Plaintiff Provision,
2014
St. John's University School of Law
Have Institutional Fiduciaries Improved Securities Class Actions? A Review Of The Empirical Literature On The Pslra's Lead Plaintiff Provision, Michael A. Perino
Faculty Publications
In 1995, Congress substantially revamped the governance of securities class actions when it created the lead plaintiff provision as part of the Private Securities Litigation Reform Act. This paper reviews the empirical literature evaluating that provision. The story that emerges from these studies is of a largely successful statutory innovation that has markedly improved the conduct of these cases. There is little doubt that passage of the PSLRA spurred institutions to become more active in securities class actions. Overall, the results of that participation are positive. Existing studies demonstrate that cases with institutional lead plaintiffs settle for more and are …
Teenage Crowdfunding,
2014
University of Colorado at Boulder
Teenage Crowdfunding, Andrew A. Schwartz
Publications
Teenage startups are in the public interest and should be encouraged, yet the federal CARD Act of 2009 eliminated credit card financing for many such companies, cutting off an important source of early-stage business capital for teenage entrepreneurs. Since then, however, Congress passed the CROWDFUND Act of 2012 which will allow teenagers to raise early-stage financing through Internet crowdfunding. Teens, being masters of the Internet, are well positioned to exploit this new opportunity, with the upshot being that securities crowdfunding may become an important way for youthful entrepreneurs to fund their business dreams.
Rolling Back The Repo Safe Harbors,
2014
Columbia Law School
Rolling Back The Repo Safe Harbors, Edward R. Morrison, Mark J. Roe, Christopher S. Sontchi
Faculty Scholarship
Recent decades have seen substantial expansion in exemptions from the Bankruptcy Code's normal operation for repurchase agreements. These repos, which are equivalent to very short-term (often one-day) secured loans, are exempt from core bankruptcy rules such as the automatic stay that enjoins debt collection, rules against prebankruptcy fraudulent transfers, and rules against eve-of-bankruptcy preferential payment to favored creditors over other creditors. While these exemptions can be justified for United States Treasury securities and similarly liquid obligations backed by the full faith and credit of the United States government, they are not justified for mortgage-backed securities and other securities that could …
The Ftc And Privacy And Security Duties For The Cloud,
2014
Boston University School of Law
The Ftc And Privacy And Security Duties For The Cloud, Daniel J. Solove, Woodrow Hartzog
Faculty Scholarship
Third-party data service providers, especially providers of cloud computing services, present unique and difficult privacy and data security challenges. While many companies that directly collect data from consumers are bound by the promises they make to individuals in their privacy policies, cloud service providers are usually not a part of this arrangement. It is not entirely clear what, if any, obligations cloud service providers have to protect the data of individuals with whom they have no contractual relationship. This problem is especially acute because many institutions sharing personal data with cloud service providers fail to include significant privacy and security …
Money Market Funds Run Risk: Will Floating Net Asset Value Fix The Problem?,
2014
Columbia Law School
Money Market Funds Run Risk: Will Floating Net Asset Value Fix The Problem?, Jeffrey N. Gordon, Christopher M. Gandia
Faculty Scholarship
The instability of money market mutual funds (“MMF”), a relatively new form of financial intermediary that connects short-term debt issuers with funders who want daily liquidity, became manifest in the financial crisis of 2007-2009. The bankruptcy of Lehman Brothers, a major issuer of money market debt, led one large fund to “break the buck” (that is, violate the $1 net asset valuation convention (“NAV”)) and triggered a run on other funds that was staunched only by major interventions from the U.S. Treasury and the Federal Reserve. One common reform proposal has been to substitute “floating NAV” for “fixed NAV,” on …
Crowdfunding For Biotechs: How The Sec’S Proposed Rule May Undermine Capital Formation For Startups,
2013
The Catholic University of America, Columbus School of Law
Crowdfunding For Biotechs: How The Sec’S Proposed Rule May Undermine Capital Formation For Startups, Brian J. Farnkoff
Journal of Contemporary Health Law & Policy (1985-2015)
No abstract provided.
Escaping Entity-Centrism In Financial Services Regulation,
2013
Chicago-Kent College of Law
Escaping Entity-Centrism In Financial Services Regulation, Anita Krug
All Faculty Scholarship
In the ongoing discussions about financial services regulation, one critically important topic has not been recognized, let alone addressed. That topic is what this Article calls the “entity-centrism” of financial services regulation. Laws and rules are entity-centric when they assume that a financial services firm is a stand-alone entity, operating separately from and independently of any other entity. They are entitycentric, therefore, when the specific requirements and obligations they comprise are addressed only to an abstract and solitary “firm,” with little or no contemplation of affiliates, parent companies, subsidiaries, or multi-entity enterprises. Regulatory entity-centrism is not an isolated phenomenon, as …
Market Collaboration: Finance, Culture, And Ethnography After Neoliberalism,
2013
Cornell Law School
Market Collaboration: Finance, Culture, And Ethnography After Neoliberalism, Annelise Riles
Cornell Law Faculty Publications
In the wake of the disasters of March 2011, financial regulators and financial-risk management experts in Japan expressed little hope that much could be done nor did they take great interest in defining possible policy interventions. This curious response to regulatory crisis coincided with a new fascination with culturalist explanations of financial markets, on the one hand, and a resort to what I term “data politics”—a politics of intensified data collection—on the other. In this article, I analyze these developments as being exemplary of a new regulatory moment characterized by a loss of faith in both free market regulation and …
Dirty Remics, Revisited,
2013
Brooklyn Law School
Dirty Remics, Revisited, Bradley T. Borden, David J. Reiss
Cornell Law Faculty Publications
No abstract provided.
Reanalyzing Cost-Benefit Analysis: Toward A Framework Of Function(S) And Form(S),
2013
Texas A&M University School of Law
Reanalyzing Cost-Benefit Analysis: Toward A Framework Of Function(S) And Form(S), Robert B. Ahdieh
Faculty Scholarship
The analysis herein arises from the collision course between the sweeping reforms mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and a single sentence of the U.S. Code, adopted nearly fifteen years earlier and largely forgotten ever since. Few were likely thinking of Section 106 of the National Securities Market Improvement Act when the Dodd-Frank Act was enacted on July 21, 2010. As applied by the D.C. Circuit less than a year later in Business Roundtable v. SEC, however, that provision’s peculiar requirement of cost-benefit analysis could prove the new legislation’s undoing.
To help navigate …
