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 …
Beyond The Target Market: Product Advertising And Rule 10b-5'S In Connection With Requirement
,
2013
Elon University School of Law
Beyond The Target Market: Product Advertising And Rule 10b-5'S In Connection With Requirement , Thomas J. Maloney
Cleveland State Law Review
An investor purchases Apple common stock in reliance on representations in advertisements that the new iPad is capable of connecting to “ultrafast” 4G wireless networks. It turns out that the iPad is not compatible with the fastest wireless network in Australia or the 4G networks in Sweden and Germany. If the investor suffered a loss as a result, can the investor recover from Apple for securities fraud under Rule 10b-5 of the Securities Exchange Act of 1934? A number of possible impediments to recovery exist. One is Rule 10b-5’s limited scope. The Rule applies only to a fraud that is …
Maritime Piracy: A Sustainable Global Solution,
2013
American University Washington College of Law
Maritime Piracy: A Sustainable Global Solution, Paul Williams, Lowry Pressly
Scholarly Articles in Law Reviews & Journals
Maritime piracy is a complex transnational security concern characterized by emerging international finance operations and organization, an oversupply of labor, and a low cost of market entry. This article provides a realistic picture of the driving forces behind maritime piracy in areas such as Southeast Asia, the Gulf of Aden, and the Gulf of Guinea. By examining some of the assumptions and proposed solutions in counter-piracy literature and policy, this article exposes some piracy illusions and proposes a sustainable, global response that addresses the persistent threat of modern maritime piracy. Today's manifold piracy challenges call for a multifaceted approach. Accordingly, …
Channel Checking And Insider Trading Liability,
2013
University of Michigan Law School
Channel Checking And Insider Trading Liability, Michael Byun
Michigan Business & Entrepreneurial Law Review
This note addresses the potential legality or illegality of channel checking in the context of a private equity buyout. In Part II, this note uses a hypothetical to demonstrate a situation in which a private equity acquirer might engage in a channel check. In Part III, this note analyzes federal judicial and SEC cases that have developed various categories of insider trading liability, and provides a framework for insider trading liability. In Part IV, this note applies the analysis from Part III to the hypothetical described in Part II. Part IV attempts to reach a conclusion about whether the private …
'Quack Corporate Governance' As Traditional Chinese Medicine – The Securities Regulation Cannibalization Of China's Corporate Law And A State Regulator's Battle Against State Political Economic Power,
2013
University of Michigan Law School
'Quack Corporate Governance' As Traditional Chinese Medicine – The Securities Regulation Cannibalization Of China's Corporate Law And A State Regulator's Battle Against State Political Economic Power, Nicholas C. Howson
Law & Economics Working Papers
From the start of the PRC’s “corporatization” project in the late 1980s, a Chinese corporate governance regime subject to increasingly enabling legal norms has been determined by mandatory regulations imposed by the PRC securities regulator, the CSRC. Indeed, the Chinese corporate law system has been cannibalized by allencompassing securities regulation directed at corporate governance, at least for companies with listed stock. This article traces the path of that sustained intervention, and makes a case – wholly contrary to the “quack corporate governance” critique much aired in the U.S. – that for the PRC this phenomenon is necessary and appropriate, and …
Opinions Actionable As Securities Fraud,
2013
University of Idaho College of Law
Opinions Actionable As Securities Fraud, Wendy Gerwick Couture
Articles
This Article proposes a new analytical framework to apply to statements of opinion in securities fraud cases. Although statements of opinion form the basis of some of the most cutting edge securities fraud claims-such as those asserted against securities analysts and credit rating agencies-statements of opinion do not fit squarely within the elements of securities fraud. In particular, three issues arise: (1) When is a statement of opinion false so as to qualify as a misrepresentation? (2) When is a statement of opinion material? (3) And, for that matter, what is the distinction between a statement of fact and a …
Securities Regulation As Gap-Filler: The Example Of Hydraulic Fracturing,
2013
University of Idaho College of Law
Securities Regulation As Gap-Filler: The Example Of Hydraulic Fracturing, Wendy Gerwick Couture
Articles
No abstract provided.
¿Y Si No Me Quiero Separar Así? Flexibilizando El Derecho De Separación,
2013
Washington and Lee University School of Law
¿Y Si No Me Quiero Separar Así? Flexibilizando El Derecho De Separación, Fernando Loayza Jordán
Scholarly Articles
El autor realiza una crítica pormenorizada al artículo 200 de la Ley General de Sociedades, críticaen la cual, propone el cambio de la categoría imperativa de la norma por una de categoría dispositiva. Establece supuestos que beneficien a la separación a favor de los inversionistas y accionistas minoritarios. Propone una regulación atractiva para hacer que las transferencias de acciones sean más dinámicas y atractivas. Todo lo anterior, con el fin de beneficiar los intereses tanto de la sociedad como de los accionistas, tutelando sus derechos de manera más efectiva.
The Greek Debt Restructuring: An Autopsy,
2013
Duke Law School
The Greek Debt Restructuring: An Autopsy, Jeromin Zettelmeyer, Christoph Trebesch, Mitu Gulati
Faculty Scholarship
The Greek debt restructuring of 2012 stands out in the history of sovereign defaults. It achieved very large debt relief—over 50 percent of 2012 GDP—with minimal financial disruption, using a combination of new legal techniques, exceptionally large cash incentives, and official sector pressure on key creditors. But it did so at a cost. The timing and design of the restructuring left money on the table from the perspective of Greece, created a large risk for European taxpayers, and set precedents—particularly in its very generous treatment of holdout creditors—that are likely to make future debt restructurings in Europe more difficult.
Restructuring A Sovereign Debtor’S Contingent Liabilities,
2013
Duke Law School
Restructuring A Sovereign Debtor’S Contingent Liabilities, Mitu Gulati, Lee C. Buchheit
Faculty Scholarship
How should the contingent liabilities of a sovereign be treated in a general restructuring of the debts of that sovereign? This question has played only a minor role in past sovereign debt restructurings because the size of such contingent liabilities has in most cases been small. In recent years, however, slathering government guarantees on third party debt has become the tool of choice for many countries in their efforts to quell an incipient panic in their financial markets. Some of those sovereigns are now, or may soon be, in the position of needing to restructure their debts. Ignoring large contingent …
Revisiting Sovereign Bankruptcy,
2013
Duke Law School
Revisiting Sovereign Bankruptcy, Lee C. Buchheit, Anna Gelpern, Mitu Gulati, Ugo Panizza, Beatrice Weder Di Mauro, Jeromin Zettelmeyer
Faculty Scholarship
Sovereign debt crises occur regularly and often violently. Yet there is no legally and politically recognized procedure for restructuring the debt of bankrupt sovereigns. Procedures of this type have been periodically debated, but so far been rejected, for two main reasons. First, countries have been reluctant to give up power to supranational rules or institutions, and creditors and debtors have felt that there were sufficient instruments for addressing debt crises at hoc. Second, fears that making debt easier to restructure would raise the costs and reduce the amounts of sovereign borrowing in many countries. This was perceived to be against …
Securitization, Structured Finance, And Covered Bonds,
2013
Duke Law School
Securitization, Structured Finance, And Covered Bonds, Steven L. Schwarcz
Faculty Scholarship
No abstract provided.
Who Can't Raise Capital?: The Scylla And Charybdis Of Capital Formation,
2013
Duke University
Who Can't Raise Capital?: The Scylla And Charybdis Of Capital Formation, James D. Cox
Kentucky Law Journal
No abstract provided.
