Who Should Do The Math? Materiality Issues In Disclosures That Require Investors To Calculate The Bottom Line,
2012
Pepperdine University
Who Should Do The Math? Materiality Issues In Disclosures That Require Investors To Calculate The Bottom Line, Stefan J. Padfield
Pepperdine Law Review
Corporations sometimes tread a fine line by disclosing the data necessary to calculate the bottom line impact of a particular set of facts, while failing to disclose the bottom line itself. For example, in 2002, Merck & Co., Inc., disclosed that one of its subsidiaries had recognized as revenue co-payments it never actually received, but failed to disclose that the total amount so recognized was $5.54 billion for the year 2001. When plaintiffs challenge such incomplete disclosure, courts routinely dismiss their claims based upon what I call the Simple Math rule. The Simple Math rule states that, assuming a material …
Say On Pay And The Sec Disclosure Rules: Expressive Law And Ceo Compensation ,
2012
Pepperdine University
Say On Pay And The Sec Disclosure Rules: Expressive Law And Ceo Compensation , Sandeep Gopalan
Pepperdine Law Review
The debate over the lack of correlation between CEO compensation and performance has caused a divide amongst corporate law scholars. Proponents of intervention have predictably welcomed the legislative activity and have called for more. This article argues that the legislative and regulatory interventions by the state are in furtherance of the expressive functions of the law, and that even in the absence of sanctions such expressive laws can have an affect on behavior. It argues that while legislative and regulatory actions can express certain norms, they are ultimately unlikely to be of much help in behavior modification unless accompanied by …
Mexico And The Settlement Of Investment Disputes: Icsid As The Recommended Option,
2012
Pepperdine University
Mexico And The Settlement Of Investment Disputes: Icsid As The Recommended Option, Bernardo Sepúlveda
Pepperdine Dispute Resolution Law Journal
The changes that have taken place in arbitration conditions, the greater fairness in the arbitration process, and the increasingly stringent qualifications to be met by arbitrators, as well as contemporary economic realities, have been instrumental in causing Mexico's about-face on its approach to arbitration. Although in certain quarters doubts remain in Mexico as to the advantages of international arbitration, it would be ill advised to ignore a legal and political reality. In signing treaties that include an arbitration clause, Mexico has assumed rights and obligations. Politically speaking, a border has already been crossed. In the face of this indisputable fact, …
Unraveling The Mystery Of Wilko V. Swan: American Arbitration Vacatur Law And The Accidental Demise Of Party Autonomy ,
2012
Pepperdine University
Unraveling The Mystery Of Wilko V. Swan: American Arbitration Vacatur Law And The Accidental Demise Of Party Autonomy , James M. Gaitis
Pepperdine Dispute Resolution Law Journal
This article begins with a brief description of what the Wilko Court said with respect to the vacatur of arbitral awards and how federal and state appellate courts have construed that language. Traditional American arbitration vacatur law, including but not limited to the cases relied upon by the Wilko Court, are then reviewed in depth such that the Wilko decision and the Wilko Court's choice of language may be placed in context and fully examined. The intent and proper operation of the FAA are then discussed based on both the legislative history of the FAA and other authorities that consistently …
Insider Trading, Informed Trading, And Market Making: Liquidity Of Securities Markets In The Zero-Sum Game,
2012
William & Mary Law School
Insider Trading, Informed Trading, And Market Making: Liquidity Of Securities Markets In The Zero-Sum Game, Stanislav Dolgopolov
William & Mary Business Law Review
This Article reexamines the nexus of relationships among informed transactions, information asymmetry, and liquidity of securities markets in the context of public policy debates about insider trading and its regulation.The Article analyzes this nexus, with the emphasis on recent empirical studies and developments in the securities industry, from a variety of perspectives and considers the validity of the alleged link between insider trading—as opposed to other forms of informed trading—and market liquidity as a justification for the existence of regulation.
Federal Discovery Stays,
2012
University of Maryland School of Business
Federal Discovery Stays, Gideon Mark
University of Michigan Journal of Law Reform
In federal civil litigation, unless a discretionary stay is granted, discovery often proceeds while motions to dismiss are pending. Plaintiffs with non-meritorious cases can compel defendants to spend massively on electronic discovery before courts ever rule on such motions. Defendants who are unable or unwilling to incur the huge up-front expense of electronic discovery may be forced to settle non-meritorious claims. To address multiple electronic discovery issues, Congress amended the Federal Rules of Civil Procedure in 2006 and the Federal Rules of Evidence in 2008. However, the amendments failed to significantly reduce costs and failed to address the critical issue …
Is The Third Time The Charm? Janus And The Proper Balance Between Primary And Secondary Actor Liability Under Section 10(B),
2012
Fordham University
Is The Third Time The Charm? Janus And The Proper Balance Between Primary And Secondary Actor Liability Under Section 10(B), Elizabeth Cosenza
Cardozo Law Review
On June 13, 2011, in a 5-4 ruling that has generated much criticism, the Supreme Court decided Janus Capital Group, Inc. v. First Derivative Traders, a landmark case establishing the limits of secondary actor liability under section 10(b) of the Securities Exchange Act of 1934 (Exchange Act). Following Janus, investment managers who deceive and manipulate their shareholders no longer face the prospect of liability under section 10(b) as long as those managers perpetrate their fraud through the mutual fund itself which is, in essence, a business trust. More importantly, the decision holds that liability under section 10(b) may …
The Quest For Financial Regulatory Reform: Will A Uniform Fiduciary Standard Guide The Way?,
2012
Pepperdine University
The Quest For Financial Regulatory Reform: Will A Uniform Fiduciary Standard Guide The Way?, Bonnie M. Treichel
The Journal of Business, Entrepreneurship & the Law
No abstract provided.
The Rating Agencies: Where We Have Been And Where Do We Go From Here?,
2012
Pepperdine University
The Rating Agencies: Where We Have Been And Where Do We Go From Here?, Joshua D. Krebs
The Journal of Business, Entrepreneurship & the Law
The credit rating agencies are supposed to be gatekeepers to the public securities markets. As “gatekeepers,” they are reputational intermediaries in the investment process. Other gatekeepers include: independent auditors, credit rating agencies, securities analysts, investment bankers, and attorneys. The function of these reputational intermediaries is to act as neutral third party advisors to the investment process. While these intermediaries are paid for their opinions by one or more parties to a transaction, in theory the opinions will be neutral. This is due to the thought that any resulting reputational damage from non-neutral opinions would severely damage long-term profitability, in exchange …
L3cs: The Next Big Wave In Socially Responsible Investing Or Just Simply Too Good To Be True?,
2012
Pepperdine University
L3cs: The Next Big Wave In Socially Responsible Investing Or Just Simply Too Good To Be True?, David J. Schwister
The Journal of Business, Entrepreneurship & the Law
No abstract provided.
Unnecessary Reform: The Fallacies With And Alternatives To Sec Regulation Of Hedge Funds,
2012
Pepperdine University
Unnecessary Reform: The Fallacies With And Alternatives To Sec Regulation Of Hedge Funds, Evan M. Gilbert
The Journal of Business, Entrepreneurship & the Law
No abstract provided.
The Unsuitability Of The "Suitability Rule": Why Finra's Current Interpretation Of Conduct Rule 2310 Undermines Investor "Holding Claim" Entitlements In Contemporary Markets,
2012
Pepperdine University
The Unsuitability Of The "Suitability Rule": Why Finra's Current Interpretation Of Conduct Rule 2310 Undermines Investor "Holding Claim" Entitlements In Contemporary Markets, Laurence A. Steckman, Robert E. Conner
The Journal of Business, Entrepreneurship & the Law
This article's thesis is that FINRA Conduct Rule 2310, FINRA's “suitability rule,” should be interpreted to govern all broker-customer communications that constitute non-trivial investment advice regarding portfolio composition, not just buy, sell or exchange communications, per current interpretation (the “BSE Interpretation”). Because acting on advice to hold a security (a “Holding Claim”) can affect risk just as significantly as a recommendation to buy, sell or exchange one, the BSE Interpretation leaves a large body of investment advice affecting customer portfolio risk unregulated by suitability standards. Such interpretation not only fails to reflect Rule 2310's well recognized customer-protective purposes, but effectively …
Too Much Of A Good Thing: How Much Should Hedge Funds Be Required To Disclose?,
2012
Pepperdine University
Too Much Of A Good Thing: How Much Should Hedge Funds Be Required To Disclose?, Daniel Etlinger
The Journal of Business, Entrepreneurship & the Law
No abstract provided.
A Look At The Globalization Of The Exchanges And Its Effects On The United States Market Through An Analysis Of The Nyse And
Euronext Merger,
2012
Pepperdine University
A Look At The Globalization Of The Exchanges And Its Effects On The United States Market Through An Analysis Of The Nyse And Euronext Merger, Christopher Osborne
The Journal of Business, Entrepreneurship & the Law
No abstract provided.
The Integrative Market Hypothesis
For Stock Market Fluctuations,
2012
Pepperdine University
The Integrative Market Hypothesis For Stock Market Fluctuations, Janet Kerr, Alessandro Casati
The Journal of Business, Entrepreneurship & the Law
This article provides a new understanding of stock market price fluctuations, applying the concepts of quantum physics. This new approach challenges traditional theories of stock price movement, such as Random Walk, finding them antiquated and incomplete. The paper compares the stock price fluctuations to the quantum movement of particles. Specifically, the movement of stock prices on the NASDAQ index is fitted to a curve derived from Plank's equation for black body radiation. The market is ultimately found to be not totally reactive nor random, but taking on an emergent quality. This independent movement is not expected from the interaction of …
Codes Of Ethics And State Fiduciary Duties: Where Is The Line?,
2012
Pepperdine University
Codes Of Ethics And State Fiduciary Duties: Where Is The Line?, Z. Jill Barclift
The Journal of Business, Entrepreneurship & the Law
No abstract provided.
Goldstein V. Securities And
Exchange Commission,
2012
Pepperdine University
Goldstein V. Securities And Exchange Commission, Todd Zaun
The Journal of Business, Entrepreneurship & the Law
Hedge funds are one of the fastest growing and most controversial segments of the financial market. Most people know very little about hedge funds other than that they are the investment vehicle of choice for well-heeled investors - the place where the rich put their money in order to get even richer. In fact, hedge funds thrive on the lack of knowledge about what exactly it is that they do. Without the ability to keep their trading strategies confidential, hedge funds argue they would not be able generate the impressive returns that keep them in business. And so when the …
Arbitration Of Investors' Claims Against Issuers: An Idea Whose Time Has Come,
2012
University of Cincinnati College of Law
Arbitration Of Investors' Claims Against Issuers: An Idea Whose Time Has Come, Barbara Black
Faculty Articles and Other Publications
Ever since the U.S. Supreme Court held that arbitration provisions contained in brokerage customers’ agreements were enforceable with respect to federal securities claims, proposals have been floated to include in an issuer’s governance documents a provision that would require arbitration of investors’ claims against the issuer. To date, however, publicly traded domestic issuers and their counsel have not seriously pursued these proposals, probably because of several legal obstacles to implementation. In addition to these legal obstacles, publicly traded issuers may not have perceived significant advantages to arbitration. Recent legal developments, however, make inclusion of an arbitration provision in a publicly …
Matrixx Initiatives, Inc. V. Siracusano: Nasal Spray Decision Throws Corporations Off The Scent Of "Materiality" Definition,
2012
University of Maryland Francis King Carey School of Law
Matrixx Initiatives, Inc. V. Siracusano: Nasal Spray Decision Throws Corporations Off The Scent Of "Materiality" Definition, Marcie Brecher
Proxy
No abstract provided.
Insider Trading In China: Compared With Cases In The United States,
2012
University of Maryland Francis King Carey School of Law
Insider Trading In China: Compared With Cases In The United States, Greg Tzu Jan Yang
Maryland Series in Contemporary Asian Studies
No abstract provided.
