Securities Law Commons^™

Understanding The Big Three’S Wavering Support Of Environmental And Social Shareholder Proposals, Jeff Schwartz, Jefferson Jensen

Seattle University Law Review

Because of their substantial equity portfolios, BlackRock, Vanguard, and State Street (the Big 3) are central players in corporate governance. It is, therefore, critical to understand how they vote. One puzzle is that their support for shareholder proposals on environmental and social matters appears to waiver. In 2020, for instance, BlackRock supported 11.1% of environmental proposals at S&P 500 firms. In 2021, it seemingly reversed course, supporting 55.2%. It then flipped again, supporting 32.1% in 2022. Such statistics suggest that the Big 3 are constantly changing their views on these topics. This Article seeks to better understand whether this is …

Volume 48 Masthead, Seattle University Law Review

Seattle University Law Review

Volume 48 Masthead

Urgensi Optimalisasi Regulasi Ico Dan Regulatory Sandbox Di Indonesia: Studi Komparatif Malaysia, Singapura, Dan Uea, Arfan Yanayir Akbar Sabillilah

Jurnal Hukum & Pembangunan

Regulasi aset kripto di Indonesia sedang mengalami transisi mendasar menyusul diberlakukannya Undang-Undang Pengembangan dan Penguatan Sektor Keuangan (UU P2SK), yang mengalihkan pengawasan dari Bappebti ke Otoritas Jasa Keuangan (OJK) dan Bank Indonesia. Meskipun demikian, kerangka kerja saat ini masih menyisakan celah yang signifikan, khususnya terkait mekanisme penggalangan dana publik seperti Initial Coin Offering (ICO), Initial Exchange Offering (IEO), dan Security Token Offering (STO), serta tidak adanya Regulatory Sandbox khusus untuk inovasi berbasis kripto. Celah-celah ini menciptakan ketidakpastian hukum, meningkatkan risiko penipuan, dan melemahkan perlindungan investor. Studi ini menggunakan metode yuridis-normatif dengan pendekatan hukum komparatif, menganalisis model regulasi di Malaysia, Singapura, …

Unequal Ownership, Ofer Eldar, Rory Van Loo

Faculty Scholarship

Market concentration and weak competition do not just lead to lower efficiency but also result in corporate profits flowing primarily to wealthy households that own a disproportionate share of public corporations. We demonstrate that this is a growing distributional problem not only due to familiar reasons in the literature, most notably shifts in market power, but also due to changes in the socio-economic makeup of ownership. Over the past twenty years, households in the bottom 90 percent of wealth have seen their share of stock ownership decline by half. That is, the ownership of corporations has become increasingly concentrated among …

Regulatory Personhood: The Elixir For Redundancy Between The Sec And The Pcaob, Sarah Williams

Faculty Scholarly Works

The Public Company Accounting Oversight Board (“PCAOB” or “Board”) is a quasi-governmental regulatory agency created by Congress in 2002 in response to revelations of widespread financial fraud at major public companies. Since its creation, the agency has experienced significant challenges. Litigants have challenged its constitutionality, the Trump administration challenged its very existence, and legislation was introduced in 2021 to transfer its responsibilities to the U.S. Securities and Exchange Commission (“SEC”).

Proposals to eradicate the Board asserted vague concerns about the redundancy of its responsibilities with those of the SEC, and alleged resultant monetary waste. This Article, written in 2022, provides …

How Artificial Intelligence Will Shape Securities Regulation, Gabriel Rauterberg

Other Publications

How will the increasing prevalence and sophistication of artificial intelligence (AI) change the doctrine and practice of securities law? My main thesis is that it will push securities regulation toward a more systems-oriented approach. This approach will replace securities law's emphasis, in areas like manipulation, on forms of enforcement targeted at specific individuals and accompanied by punitive sanctions with a greater focus on ex ante rules designed to shape an ecology of actors and information.

Green Dividends: A Case Study In Green Dividends And The Conditions For Private Ordering Solutions, Anne M. Tucker

Seattle University Law Review

This Essay introduces a novel private ordering solution to facilitate corporate investments in pro-social and environmental initiatives: Green dividends. Green dividends are an optional increase in shareholder dividends that are returned to the company to be reinvested in environmental initiatives or kept by a shareholder.

Green dividends pose an alternative to the current gridlocked debate that corporations can’t, won’t, shouldn’t, and shouldn’t even try to act in pro-social or environmental ways. Turning the common refrains on their head converts each narrative into an element for a successful private ordering solution: authority, accountability, shareholder buy-in, and government- backed enforcement. With Green …

Does Climate Disclosure Work To Reduce Greenhouse Gas Emissions? Emerging Evidence Suggests Cautious Optimism, Cynthia A. Williams

Seattle University Law Review

Significant regulatory resources have been spent developing global, voluntary climate and sustainability disclosure standards, such as the TCFD, TNRD, and ISSB’s Sustainability and Climate Disclosure standards, or domestically required disclosures, such as in the EU and in the U.S. Thus, it is important to evaluate whether this disclosure, particularly voluntary, qualitative disclosure, will have the power to shift the allocation of capital, will have a significant effect on the management of climate risk within firms, and ultimately will reduce climate change risk and biodiversity loss.

In this Article, several interrelated questions will be discussed. First, what does the empirical evidence …

Volume 48 Masthead, Seattle University Law Review

Seattle University Law Review

Volume 48 Masthead

Executive Order 14330: A Solution In Search Of A Problem, Edward A. Zelinsky

Cardozo Law Review de•novo

President Trump’s Executive Order 14330 proclaims its determination to “democratiz[e] access to alternative investments for 401(k) investors.” Among its other provisions, Executive Order 14330 requires the Department of Labor (DOL) to “clarify the duties that a fiduciary owes to plan participants.” Such clarification shall “relieve the regulatory burdens and litigation risk that” allegedly deny 401(k) participants access to alternative investments. However, the order states, DOL’s administrative guidance on alternative investments must be “consistent with applicable law.”

Distinguishing Among Climate Change-Related Risks, Lisa E. Sachs, Denise Hearn, Matt Goldklang, Perrine Toledano

Columbia Center on Sustainable Investment

Understanding the diverse types of climate change-related risks is crucial for developing effective strategies to address the global climate crisis. A holistic yet disaggregated approach allows for a comprehensive view of the challenges while enabling targeted responses from various stakeholders. This document outlines three main categories of climate-related risks: planetary, economic, and financial, detailing their relevance to various stakeholders, timeframes, and potential response strategies.

This short brief aims to disentangle the complex nature of risk discussions for productive discourse and appropriate risk management approaches for different stakeholders. In practice, discussions related to assessing and responding to climate change risk have …

Beyond Jarkesy: Rethinking The Role Of Administrative Law Judges In Sec Administrative Proceedings, Mark T. Uyeda, Jaime Marinaro

Fordham Journal of Corporate & Financial Law

No abstract provided.

Alternatives To Delaware? Evaluating Corporate Law In Nevada, Texas, And Wyoming, Joseph Landau, Bailey Swartz, Anthony Rickey, Robert Ragazzo, Benjamin Edwards, George A. Mocsary

Fordham Journal of Corporate & Financial Law

No abstract provided.

Algorithms In Finance: Balancing First Amendment Protections And Regulation, Yusraa Tadj

Fordham Journal of Corporate & Financial Law

As algorithms become a function of decision-making in the financial sector, policymakers, the judiciary, and academics grapple with regulatory questions. With the increased reliance on algorithms in finance, the Securities and Exchange Commission (SEC) proposed a rule to mitigate potential conflicts of interest that can arise out of financial firms using algorithms. Algorithm users, including financial firms, are finding novel ways to protect algorithm use, such as by offering them First Amendment protections.

This Note considers to what extent algorithms can be considered protected speech amidst the complexity of algorithms and relationship within the financial sector. The Note argues that …

In Re Firstenergy Corp. Securities Litigation: Where Macquarie Meets Affiliated Ute, Elizabeth Cosenza, Amanda M. Payne

Fordham Journal of Corporate & Financial Law

The central question this Article seeks to address is whether there is any world in which the Affiliated Ute presumption can still apply to cases under Rule 10b-5(b) after the Supreme Court’s decision in Macquarie? Put differently, if only half-truths and affirmative misrepresentations remain actionable under Rule 10b-5(b), is the Basic presumption the only pathway left for securities plaintiffs? The U.S. Court of Appeals for the Sixth Circuit will likely be the first court to address this issue in In re FirstEnergy Corp. Securities Litigation. The case will test the availability of the Affiliated Ute presumption post-Macquarie in cases based …

Cryptocurrencies, Nfts, And The Expanding Definition Of "Investment Contract": Has The Sec Already Torpedoed The Howey Test?, David B. Guenther

Fordham Journal of Corporate & Financial Law

The U.S. Supreme Court in SEC v. W.J. Howey Co. in 1946 famously defined the term “investment contract”—the catch-all term in the definition of “security” in the Securities Act of 1933—to mean (1) an investment of money, (2) in a common enterprise, (3) with an expectation of profits solely from the efforts of others. While the Howey test has endured as the standard definition of an investment contract, the Howey Court did not define the term “common enterprise,” and for more than fifty years, Howey’s common enterprise prong has eroded. Since 2017, the Securities and Exchange Commission has further eroded …

How To Evaluate Non-Majority Control: What History And Statutes Tell Us, J. Travis Laster

Fordham Journal of Corporate & Financial Law

Under American law, a person who controls a corporation is a fiduciary. Since the nineteenth century, American law has treated a person who wields a majority of the voting power as having control. For almost as long, American law has recognized that holding a majority of the voting power is sufficient but not necessary for control. During the past two decades in Delaware, two schools of thought co-existed regarding non-majority control. One school took a formal approach that (i) shifted from examining control over the business affairs of the enterprise to control over the board, (ii) discounted sources of influence …

Scienter Potentia Est: The Case For The Presumption Of Use Standard In Insider Trading, Audrey Nelson

Fordham Journal of Corporate & Financial Law

Is it possible to accidentally insider trade? The Supreme Court has held that scienter is a necessary element of all § 10(b) and Rule 10b-5 actions, but the federal appeals courts are split on how the scienter requirement applies to insider trading cases. In a non-insider- trading § 10(b) case, the Supreme Court stated that § 10(b) scienter requires intentional misconduct. Although the Supreme Court has not heard a case specifically about the scienter element in the context of insider trading, those who support a use requirement claim that the § 10(b) scienter element requires the plaintiff to show that …

Amending Regulation D'S Accredited-Investor Definition To Allow Natural Persons To Opt Out Of Unwanted Regulatory Protections, John L. Orcutt

Fordham Journal of Corporate & Financial Law

No abstract provided.

The Fortunate Demise Of Sec Staff Legal Bulletin No. 14l, Raffaele Felicetti

Fordham Journal of Corporate & Financial Law

In 2021, the SEC published its now rescinded Staff Legal Bulletin No. 14L (“the 2021 Bulletin”), revising its interpretations of the “ordinary business” and “economic relevance” exclusions under Rule 14a-8. This Article contends that the post-Bulletin landscape has proven undesirable. It empirically shows that environmental and social (“E & S”) shareholder proposals—including anti-E&S proposals—surged in response. Between 2022 and 2024 alone, E & S proposals accounted for 40% of all such filings in Russell 3000 companies over the entire 2014-2024 period, generating an estimated $23.3 million in additional processing costs for companies during that three-year window. Despite their volume, these …