Securities Law Commons^™

The Shareholder Value Myth, Lynn A. Stout

Cornell Law Faculty Publications

No abstract provided.

Business Roundtable V. Securities And Exchange Commission: The Sec's First Big Shot At Proxy Access In The Shadow Of Dodd-Frank, Raymond E. Areshenko

Journal of the National Association of Administrative Law Judiciary

No abstract provided.

When The Government Attempts To Change The Board, Investors Should Know, William O. Fisher

Pepperdine Law Review

In 2008 and 2009, the federal government effectively hired and fired directors at American International Group and Bank of America, without any securities filing of the sort that would have been required had a private market actor attempted to change the boards at those companies. The fact that current law allows the government to secretly reconstitute the governing bodies of multibillion-dollar, publicly traded companies is cause for concern, for who controls the board controls the company. This Article argues that, just as securities filings alert investors when private parties attempt board change, a new required filing should inform investors when …

Materiality In Sarbanes-Oxley Act Employee Protection Claims, William Dorsey

Journal of the National Association of Administrative Law Judiciary

No abstract provided.

Great Debate: Mining In Latin America, Lisa E. Sachs

Columbia Center on Sustainable Investment Staff Publications

Mining represents a great opportunity for economic growth, especially for emerging economies. It is often seen as the path to prosperity. However, the mining industry is a double edged sword. Countries in Latin America are managing to attract significant foreign investment. In Chile, the extractive sector’s participation in the economy has tripled in the last 10 years, reaching 15% of GDP. In Colombia and Peru, it has doubled to 10% of GDP. The Santos administration in Colombia has made mining one of its top policy priorities.

However, there may be significant downsides to mining, as governments are forced to offer …

Accidental Suicide Pacts And Creditor Collective Action Problems: The Mortgage Mess, The Deadweight Loss, And How To Get The Value Back, Robert C. Hockett

Cornell Law Faculty Publications

Sustained economic recovery will remain elusive in America, post-crash, until principal is reduced on some 10-13 million underwater home mortgage loans across the nation. Yet in the case of privately securitized loans, these write-downs are all but impossible to carry out on the requisite scale because bubble-era securitization contracts, which now effectively function as suicide pacts among bondholders, would require collective action by millions of geographically dispersed passive investors in order to authorize write-downs or sales out of securitization trusts. The solution, this article suggests, is for state and municipal governments to use their eminent domain powers to buy up …

Scaling Chinese Walls: Insights From Aftra V. Jpmorgan Chase, Jeffrey Bingham

William & Mary Business Law Review

The material non-public information financial services firms receive from clients utilizing commercial banking services may often prove beneficial to the firm’s trust account clients if the information is used in making investment decisions for these trust accounts. Consequently, financial services firms confront two equally dubious options: to utilize the information to benefit the trust account client and break insider trading laws, or to disregard the information and seemingly violate the firm’s fiduciary duty to the trust account client. To successfully defend against either of the above claims, firms should establish and maintain effective Chinese Walls between private and public side …

Policing Public Companies: An Empirical Examination Of The Enforcement Landscape And The Role Played By State Securities Regulators, Amanda Rose, Larry J. Leblanc

Vanderbilt Law School Faculty Publications

Multiple different securities law enforcers can pursue U.S. public companies for the same misconduct. These enforcers include a variety of federal agencies, class action attorneys, and derivative litigation attorneys, as well as fifty separate state regulators. Scholars and policy makers have increasingly questioned whether the benefits of this multienforcer approach are worth the costs, or whether a more coordinated and streamlined securities enforcement regime might lead to efficiency gains. How serious are these concerns? And what role do state regulators play in the enforcement mix? Whereas the enforcement efforts of the Securities and Exchange Commission and class action lawyers have …

State Enforcement Of National Policy: A Contextual Approach (With Evidence From The Securities Realm), Amanda M. Rose

Vanderbilt Law School Faculty Publications

This Article addresses a topic of contemporary public policy significance: the optimal allocation of law enforcement authority in our federalist system. Proponents of competitive federalism have long argued that assigning concurrent enforcement authority to states and the federal government can lead to redundant expense, policy distortion, and a loss of democratic accountability. A growing literature responds to these claims, trumpeting the benefits of concurrent state-federal enforcement - most notably the potential for state regulators to remedy under-enforcement by captured federal agencies. Both bodies of scholarship are right, but also incomplete. What is missing from this rather polarized debate is a …

Municipal Securities: The Crisis Of State And Local Government Indebtedness, Systemic Costs Of Low Default Rates, And Opportunities For Reform, Christine Sgarlata Chung

Cardozo Law Review

No abstract provided.

Who Wants To Watch? A Comment On The New International Paradigm Of Financial Consumer Market Regulation, Toni Williams

Seattle University Law Review

This Article explores the capacity of the G20’s model of financial consumer protection to reconfigure relationships between financial firms and consumers, focusing in particular on the market conduct of financial firms. Although this Article does not focus directly on Adolf A. Berle’s work, it does engage with some of his enduring concerns about economic relations between corporations, regulators, and individuals; the socialcontext of those economic relations; and the role of law and legal regulation in shaping market relations. More specifically, this Article considers new international regulatory principles related to corporate social responsibility— a recurring theme of Berle’s work11—in the somewhat …

Dinner Parties During “Lost Decades”: On The Difficulties Of Rethinking Financial Markets, Fostering Elite Consensus, And Renewing Political Economy, David A. Westbrook

Seattle University Law Review

This Article addresses two groups of problems that ought to be understood in relation to one another. This Article has three movements. In Part II, I discuss conceptual obstacles to forming the new elite consensus that rethinking the role of financial markets requires. To produce policy reform, it is not enough to have new ideas; the ideas must be understood, adopted, and acted upon by people. Policy reform is thus always a function of conversations. In Part III, I discuss some possible ways the elite consensus might be formed. In Part V, the conclusion, I offer a preliminary assessment of …

On The Rise Of Shareholder Primacy, Signs Of Its Fall, And The Return Of Managerialism (In The Closet), Lynn A. Stout

Seattle University Law Review

In their 1932 opus "The Modern Corporation and Public Property," Adolf Berle and Gardiner Means famously documented the evolution of a new economic entity—the public corporation. What made the public corporation “public,” of course, was that it had thousands or even hundreds of thousands of shareholders, none of whom owned more than a small fraction of outstanding shares. As a result, the public firm’s shareholders had little individual incentive to pay close attention to what was going on inside the firm, or even to vote. Dispersed shareholders were rationally apathetic. If they voted at all, they usually voted to approve …

Rebalancing Private Placement Regulation, William K. Sjostrom, Jr.

Seattle University Law Review

Regulating securities offerings entails balancing investor protection and capital formation. Inevitably, this balance gets upset. As financial markets evolve, Congress passes new legislation, the Securities and Exchange Commission (SEC) adopts new rules, and the courts issue unanticipated opinions. These events upset the balance because they happen in an uncoordinated and haphazard manner and oftentimes produce unintended consequences.The Article proceeds as follows. To set the stage, Part II provides background on the Securities Act and describes the differences between public offerings and private placements. Part III explains why rebalancing private placement regulation may be warranted. Part IV offers proposed statutory language …

Equity Derivatives And The Challenge For Berle’S Conception Of Corporate Accountability, Janis Sarra

Seattle University Law Review

With the proliferation of equity derivatives and related structured financial products, the North American conception of corporate governance faces a new and distinct challenge to its underlying premises.This Article analyzes these developments with a focus on the implications for director and officer accountability and corporate sustainability, using the occasion of the third symposium of the Adolf A. Berle, Jr. Center on Corporations, Law & Society to consider whether Berle’s analysis of corporate accountability offers any insights into how to address the uncoupling of economic interest and legal rights in corporate governance. Part II of this Article sets the context for …

Hedge Funds And Risk Decoupling: The Empty Voting Problem In The European Union, Wolf-Georg Ringe

Seattle University Law Review

The law must remain adaptive and responsive to the constantly changing challenges of our society and our business life. One of the most pressing challenges of the past years is the emergence of alternative investment funds, in particular hedge funds, which masterfully exploit the traditional categories of corporate law, financial derivatives, and risk management. This Article is only concerned with the first of these two forms— negative decoupling.9 It looks at the various forms of negative riskdecoupling strategies and tries to shed light on their overall desirability. Three distinct theoretical perspectives are used as an analytical framework to examine the …

Revisiting “Truth In Securities” Revisited: Abolishing Ipos And Harnessing Private Markets In The Public Good, A. C. Pritchard

Seattle University Law Review

This article's focus is the idea that the transition between private- and public company status could be less bumpy if we unify the public–private dividing line under the Securities Act and Exchange Act. Part II of this article outlines the current public–private dividing lines under the Securities Act and the Exchange Act. This part also explores Facebook’s recent transition from private to public status under that framework, as well as Congress’s recent intervention in the field with the JOBS Act. Part III explores the problems of making the transition from private to public, focusing on IPOs and their role in …

Corporate Governance As A School Of Social Reform, Ciarán O’Kelly

Seattle University Law Review

In this paper, I present a vision of the corporation as a moral person. I point to “the separation of ownership and control” as a moment when the corporation broke away from the moral lives of ownermanagers. I then draw out the manner in which we can speak of the company as a moral person. Finally, through a discussion of social reporting in two British banks, I point to a shift in how this moral personhood is articulated, with the rise of corporate governance—or doing business well—as its own foundation of corporate responsibility. I propose a view of corporate responsibility …

The Common Link In Failures And Scandals At The World’S Leading Banks, Justin O’Brien, Olivia Dixon

Seattle University Law Review

This Article argues that both the root cause of the crisis and the route to restoring trust and confidence is to be found in ascertaining how to regulate culture across mandates, processes, and use of discretion. Part II identifies the internal and external failings of four of the most recent global banking scandals within the CEDAR matrix. Part III discusses the regulatory challenges faced when compliance serves no practical function and the consequent material risk to market integrity. This Article concludes by suggesting that it is unsustainable for regulation to be decided, implemented, and monitored at a national level. Global …

Shareholder Social Responsibility, David Millon

Seattle University Law Review

Amidst concerns about the negative effects on long-run value and competitiveness, one overlooked consequence of short-termism is its impediment to corporate social responsibility (CSR).In this Article, Part II examines the short-termism phenomenon, first from the point of view of investors and then from that of corporate managers, and summarizes widely held views about the social costs of short-termism. Part III then shifts the focus to the impact of shorttermism on CSR, a problem that has been largely overlooked, and develops two theories or models of CSR: the “ethical” and the “strategic.” Part III also explains how short-termism presents a significant …