Securities Class Actions And Bankrupt Companies,
2013
Brooklyn Law School
Securities Class Actions And Bankrupt Companies, James J. Park
Michigan Law Review
Securities class actions are often criticized as wasteful strike suits that target temporary fluctuations in the stock prices of otherwise healthy companies. The securities class actions brought by investors of Enron and WorldCom, companies that fell into bankruptcy in the wake of fraud, resulted in the recovery of billions of dollars in permanent shareholder losses and provide a powerful counterexample to this critique. An issuer's bankruptcy may affect how judges and parties perceive securities class actions and their merits, yet little is known about the subset of cases where the company is bankrupt. This is the first extensive empirical study …
The Tips Are For The Taking: The Supreme Court Limits Third Party Liability In Dirks V. Securities And Exchange Commission,
2013
Pepperdine University
The Tips Are For The Taking: The Supreme Court Limits Third Party Liability In Dirks V. Securities And Exchange Commission, W. Steven Shayer
Pepperdine Law Review
No abstract provided.
Boiler Room Fraud: An Operational Plan Utilizing The Injunction Against Fraud Pursuant To 18 U.S.C. §1345 ,
2013
Pepperdine University
Boiler Room Fraud: An Operational Plan Utilizing The Injunction Against Fraud Pursuant To 18 U.S.C. §1345 , Robert M. Twiss
Pepperdine Law Review
No abstract provided.
The Unjustified Furor Over Securities Arbitration,
2013
Pepperdine University
The Unjustified Furor Over Securities Arbitration, Gilbert R. Serota
Pepperdine Law Review
No abstract provided.
Corporation Code Sections 309 And 1203: California Redefines Directors' Duties Towards Shareholders,
2013
Pepperdine University
Corporation Code Sections 309 And 1203: California Redefines Directors' Duties Towards Shareholders, Ernest F. Batenga, Mark Willis
Pepperdine Law Review
No abstract provided.
The New Shareholder Power,
2013
Pepperdine University
A Note On Individual Recovery In Derivative Suits,
2013
Pepperdine University
A Note On Individual Recovery In Derivative Suits, Richard A. Booth
Pepperdine Law Review
No abstract provided.
The Supreme Court And The Shareholder Litigant: Basic, Inc. V. Levinson In Context,
2013
Pepperdine University
The Supreme Court And The Shareholder Litigant: Basic, Inc. V. Levinson In Context, Jayne W. Barnard
Pepperdine Law Review
No abstract provided.
The "In Connection With" Requirement Of Rule 10b-5,
2013
Pepperdine University
The "In Connection With" Requirement Of Rule 10b-5, C. Edward Fletcher Iii
Pepperdine Law Review
No abstract provided.
Decisional Integrity And The Business Judgment Rule: A Theory,
2013
Pepperdine University
Decisional Integrity And The Business Judgment Rule: A Theory, Alfred Dennis Mathewson
Pepperdine Law Review
No abstract provided.
Scandal Enforcement At The Sec: The Arc Of The Option Backdating Investigations,
2013
NYU Law School
Scandal Enforcement At The Sec: The Arc Of The Option Backdating Investigations, Stephen Choi, Adam C. Pritchard, Anat C. Wiechman
Law & Economics Working Papers
We study the SEC’s allocation of enforcement resources in the wake of a salient public scandal. We focus on the SEC’s investigations of option backdating in the wake of numerous media articles on the practice of backdating. We find that the SEC shifted its mix of investigations significantly toward backdating investigations and away from investigations involving other accounting issues. We test the hypothesis that SEC pursued more marginal investigations into backdating at the expense of pursuing more egregious accounting issues. Our event study of stock market reactions to the initial disclosure of backdating investigations shows that those reactions declined over …
Investment Company As Instrument: The Limitations Of The Corporate Governance Regulatory Paradigm,
2013
Chicago-Kent College of Law
Investment Company As Instrument: The Limitations Of The Corporate Governance Regulatory Paradigm, Anita Krug
All Faculty Scholarship
U.S. regulation of public investment companies (such as mutual funds) is based on a notion that, from a governance perspective, investment companies are simply another type of business enterprise, not substantially different from companies that produce goods or provide (noninvestment) services. In other words, investment company regulation is founded on what this Article calls a “corporate governance paradigm,” in that it provides a significant regulatory role for boards of directors, as the traditional governance mechanism in business enterprises, and is “entity centric,” focusing on intraentity relationships to the exclusion of superentity ones. This Article argues that corporate governance norms, which …
Rethinking U.S. Investment Adviser Regulation,
2013
Chicago-Kent College of Law
Rethinking U.S. Investment Adviser Regulation, Anita Krug
All Faculty Scholarship
(Excerpt)Now, in the aftermath of Dodd-Frank's enactment and the SEC's associated bout of rulemaking, one might think that the Advisers Act's regulatory regime is a workable and effective one, equipped to address - and address efficiently - the investor-protection risks that the twenty-first-century investment adviser industry produces. In fact, however, Dodd-Frank did not touch - and, indeed, Dodd-Frank's crafters indicated no awareness of - many of the Advisers Act's longstanding troubles. Additionally, the changes Dodd-Frank brought about have their own considerable deficiencies. As this Article contends, the U.S. investment adviser regulatory regime, now seventy-four years old, is in need of …
The Cost Of Securities Fraud,
2013
University of Maryland Francis King Carey School of Law
The Cost Of Securities Fraud, Urska Velikonja
Faculty Scholarship
Under the dominant account, securities fraud by public firms harms the firms’ shareholders and, more generally, capital markets. Recent financial legislation—the JOBS Act and the Dodd-Frank Act—as well as the influential 2011 D.C. Circuit decision in Business Roundtable v. SEC reinforce that same worldview. This Article contends that the account is wrong. Misreporting distorts economic decision-making by all firms, both those committing fraud and not. False information, coupled with efforts to hide fraud and avoid detection, impairs risk assessment by providers of human and financial capital, suppliers and customers, and thus misdirects capital and labor to lower-value projects. If fraud …
Punishing Bad Brokers: Self-Regulation And Finra Sanctions,
2013
University of Cincinnati College of Law
Punishing Bad Brokers: Self-Regulation And Finra Sanctions, Barbara Black
Faculty Articles and Other Publications
Regulation of the broker-dealer industry by a self-regulatory organization (SRO) is an integral part of the federal regulatory scheme under the Securities Exchange Act of 1934 (the Exchange Act). As a result, the Financial Industry Regulatory Authority (FINRA), the sole SRO for U.S. broker-dealers, plays an important role in protecting investors, especially retail investors, and bolstering investor confidence in the securities industry and capital markets. In 2012 FINRA brought 1,541 disciplinary actions against registered individuals and firms, levied fines totaling more than $68 million and ordered restitution of $34 million. It expelled 30 firms, barred 294 individuals and suspended another …
Curbing Broker-Dealers' Abusive Sales Practices: Does Professor Jensen's Integrity Framework Offer A Better Approach?,
2013
University of Cincinnati College of Law
Curbing Broker-Dealers' Abusive Sales Practices: Does Professor Jensen's Integrity Framework Offer A Better Approach?, Barbara Black
Faculty Articles and Other Publications
Retail investors, particularly senior citizens, need competent and careful investment advice more than ever before. Many must rely on the services provided by investment advice providers, including broker-dealers. Regulators have sounded the alarm about sales of risky, complex products to retail customers in search of better returns, especially senior citizens and retirees. Both the SEC and FINRA have identified abusive broker-dealer sales practices as priorities in their examinations of broker-dealers and have brought numerous enforcement actions against broker-dealers for sales practices that harm retail investors. These enforcement actions frequently allege both failures of the firms’ due diligence processes to assure …
Criminal Securities Fraud And The Lower Materiality Standard,
2013
University of Idaho College of Law
Criminal Securities Fraud And The Lower Materiality Standard, Wendy Gerwick Couture
Articles
No abstract provided.
Behavioral Economics And Investor Protection: Reasonable Investors, Efficient Markets,
2013
University of Cincinnati College of Law
Behavioral Economics And Investor Protection: Reasonable Investors, Efficient Markets, Barbara Black
Faculty Articles and Other Publications
The judicial view of a “reasonable investor” plays an important role in federal securities regulation, and courts express great confidence in the reasonable investor’s cognitive abilities. Behavioral economists, by contrast, do not observe real people investing in today’s markets behaving as the reasonable investors that federal securities law expects them to be. Similarly, the efficient market hypothesis (EMH) has exerted a powerful influence in securities regulation, although empirical evidence calls into question some of the basic assumptions underlying EMH. Unfortunately, to date, courts have only acknowledged the discrepancy between legal theory and behavioral economics in one situation, class certification of …
Dirty Remics, Revisited,
2013
Brooklyn Law School
Dirty Remics, Revisited, David J. Reiss, Bradley T. Borden
Faculty Scholarship
No abstract provided.
Securities Regulation Of Ontario Venture Issuers: Rules Or Principles?,
2013
Osgoode Hall Law School of York University
Securities Regulation Of Ontario Venture Issuers: Rules Or Principles?, John Pearson Allen
PhD Dissertations
Should the securities regulation of Ontario venture issuers be based primarily on rules or principles? Advocates for rules argue that detailed rules, with predictable meaning and scope, allow participants to focus on matters other than compliance. Advocates for principles argue that when an activity is complex, such as securities trading, detailed rules can become a confusing web, obscuring core values and discouraging creative solutions. The rules and principles literature is reviewed, along with the topics of risk-based, responsive, outcomes oriented and proportionate regulation. Governance theory is addressed and various compliance theories are discussed. From this, eight factors are gleaned to …
