Securities Law Commons^™

Shadow Banking, Financial Markets, And The Real Estate Sector, Steven L. Schwarcz

Faculty Scholarship

This is a relatively brief “firestarter” talk prepared by the author for the World Economic Forum’s Industry Partnership Strategists Meeting 2012 (held on October 3, 2012) on transformation of the real estate sector in light of ongoing shifts in the financial markets and broader global trends.

Four Uncharted Corners Of Anti-Corruption Law: In Search Of Remedies To The Sanctioning Effect, Andrew B. Spalding

Law Faculty Publications

This Article is the third installment in a long-term research project that examines the effects of the U.S. Foreign Corrupt Practices Act in relation to its underlying policy goals. It first reiterates the various data points showing that enforcement now has the unintended effect of reducing investment in higher-corruption markets. Because this amounts to the withdrawal of capital from developing countries in protest of their political conditions, I call this the "sanctioning effect." The paper then seeks to push the envelope of current anti-bribery debates by exploring connections to four fields of academic inquiry not typically associated with the FCPA. …

Coco Rising: Can The Emergence Of Novel Hybrid Securities Protect From Future Liquidity Crises?, Eric S. Halperin

Brigham Young University International Law & Management Review

No abstract provided.

Institutionalization, Investment Adviser Regulation, And The Hedge Fund Problem, Anita Krug

All Faculty Scholarship

This Article contends that more effective regulation of investment advisers could be achieved by recognizing that the growth of hedge funds, private equity funds, and other private funds in recent decades is a manifestation of institutionalization in the investment advisory context. That is, investment advisers today commonly advise these “institutions,” which have supplanted other, smaller investors as advisory clients. However, the federal securities statute governing investment advisers, the Investment Advisers Act of 1940, does not address the role of private funds as institutions that now intermediate those smaller investors’ relationships to investment advisers. Consistent with that failure, investment adviser regulation …

Memo To The Sec On The Proposed Rule On Disclosure Of Payments By Resource Extraction Issuers, Perrine Toledano

Columbia Center on Sustainable Investment Staff Publications

CCSI strongly supports the transparency of contracts and tax flows. CCSI shares the belief of many stakeholders that transparency is essential to leverage extractive industries for sustainable development and is in the mutual interest of all stakeholders. However, some industry players continue to voice the concern that increased transparency would be harmful for their business. Therefore, CCSI is working to also establish the business case for transparency.

In one such case, some industry players have been lobbying against the regulations developed by the Security and Exchange Commission to implement the mandatory disclosure provisions of the Dodd Frank Wall Street Reform …

Transnational Class Actions And The Illusory Search For Res Judicata, Tanya Monestier

Law Faculty Scholarship

The transnational class action-a class action in which a portion of the class consists of non-US claimants-is here to stay Defendants typically resist the certification of transnational class actions on the basis that such actions provide no assurance of finality for a defendant, as it will always be possible for a non-U.S. class member to initiate subsequent proceedings in a foreign court. In response to this concern, many U.S. courts will analyze whether the "home" courts of the foreign class members would accord res judicata effect to an eventual U.S. judgment prior to certifying a U.S. class action containing foreign …

Dodd-Frank, Compensation Ratios, And The Expanding Role Of Shareholders In The Governance Process, J. Robert Brown Jr.

Sturm College of Law: Faculty Scholarship

The Dodd-Frank Act included a number of provisions designed to reform the executive compensation process. One of the provisions, Section 953(b), requires disclosure of a ratio that compares CEO compensation with the median income of employees. Although hardly noticed at the time of adoption, the provision has since generated opposition, with many of the concerns involving the logistics associated with implementation. Efforts to repeal Section 953(b) have surfaced in Congress.

Derivatives: A Twenty-First Century Understanding, Timothy E. Lynch

Faculty Works

Derivatives are commonly defined as some variation of the following: a financial instrument whose value is derived from the performance of a secondary source such as an underlying bond, commodity or index. But this definition is both over-inclusive and under-inclusive. Thus, not surprisingly, derivatives are largely misunderstood, including by many policy makers, regulators and legal analysts. It is important for interested parties such as policy makers to understand derivatives, because the types and uses of derivatives have exploded in the last few decades, and because these financial instruments can provide both social benefits and cause social harms. This Article presents …

Gambling By Another Name; The Challenge Of Purely Speculative Derivatives, Timothy E. Lynch

Faculty Works

Derivatives contracts can be used to hedge pre-existing risks, but they can also be used to speculate. This Article focuses on derivatives contracts in which both counterparties are speculators. These “purely speculative derivatives (PSD) contracts” have become increasingly common over the last several years and have notably resulted in the transfer of many tens of billions of dollars from institutions that had invested in the US subprime housing market to a handful of speculators who foresaw the market’s collapse, as well as many billions of dollars in fees to PSD brokers.

PSD contracts are problematic. PSD contracts are less-than-zero-sum transactions …

Intraportfolio Litigation, Amanda Rose, Richard Squire

Vanderbilt Law School Faculty Publications

The modern trend is for investors to diversify. Shareholders who own one S&P 500 firm tend to own many of the others as well. This trend casts doubt on the traditional compensation and deterrence rationales for legal rules that hold corporations liable for the acts of their agents. Today, when A Corp sues B Corp (for breach of contract, theft of trade secrets, or any other legal wrong), many of the same shareholders own both the plaintiff and the defendant. For these shareholders, damages just shift money from one pocket to another, minus of course lawyer fees. We offer here …

Warning: Your Lcc Interest Might Be A Security, Wendy Gerwick Couture

Articles

No abstract provided.

"Patient Capital": Can Delaware Corporate Law Help Revive It?, Jack B. Jacobs

Washington and Lee Law Review

No abstract provided.

The Trouble With Investment Banking: Cluelessness, Not Greed, Will Bunting

San Diego Law Review

We assume that the set of marketable financial instruments can be divided into two distinct categories: (1) easy to price and (2) difficult to price, and then isolate two behavioral effects as most important with respect to securities trading in difficult-to-price securities; specifically, the "house money effect" and the "earned money effect." It is shown that these behavioral effects discourage profitable investment in research effort.

We then argue that the Private Securities Litigation Reform Act (PSLRA) safe harbor should not apply to investment banks that issue/underwrite difficult-to-price securities. We also advocate for the return of the private investment banking partnership …

Wider Role For Our Miners In Africa, Lisa E. Sachs, Joel Negin, Glenn Denning

Columbia Center on Sustainable Investment Staff Publications

The Australian government is rapidly increasing aid to Africa. But the real story about the country's engagement in Africa is the massive investment by Australian companies in extractive industries.

More than 150 Australian resource companies are active in more than 40 African countries with a total investment greater than $20 billion, including in coal in Mozambique, copper and uranium in Zambia, gold in Eritrea and uranium in Malawi.

The Wreck Of Regulation D: The Unintended (And Bad) Outcomes For The Sec’S Crown Jewel Exemptions, Rutheford B. Campbell Jr.

Law Faculty Scholarly Articles

Regulation D is—or at least should be—the crown jewel of the Securities and Exchange Commission's regulatory exemptions from the registration requirements of the Securities Act of 1933. It offers businesses—especially businesses with relatively small capital requirements—fair and efficient access to vital, external capital.

In this article, I present data derived from deep samples of recent Form Ds filed with the Commission. The data show that Regulation D is not working in the way the Commission intended or in a way that benefits society The data reveal that companies attempting to raise relatively small amounts of capital under Regulation D overwhelmingly …

The Federal Trade Commission And Privacy: Defining Enforcement And Encouraging The Adoption Of Best Practices, Andrew Serwin

San Diego Law Review

This Article examines the history of privacy enforcement by the Federal Trade Commission (FTC), including the FTC’s jurisdiction under section 5, and its privacy enforcement matters, as well as the FTC’s recently issued report, Protecting Consumer Privacy in an Era of Rapid Change: A Proposed Framework for Businesses and Policymakers, in which the FTC examines past enforcement models, noting their failings. In light of the FTC’s examination of past enforcement models, this Article then analyzes these models, including the accountability-centric model that has previously been utilized in the United States, as well as the FTC’s proposed solution to the privacy …

Jones V. Harris Associates: Shareholders’ Consolation Prize In The Mutual Fund Fee Debate, Nicole Grospe

Pace Law Review

No abstract provided.

Fair Notice: Providing For Electronic Document Transmissions To Shareholders In Washington State, James L. Proctor Jr.

Washington Journal of Law, Technology & Arts

In 2008, Washington State amended Wash. Rev. Code § 23B.01.410 to allow electronic transmission of materials accompanying corporate notices to shareholders. This amendment, combined with an earlier change allowing corporations operating within the state to notify shareholders through certain types of electronic transmissions, incorporated several Securities and Exchange Commission (SEC) suggestions to expand the authorized uses of Internet-based technology to communicate with shareholders. However, corporations operating across state lines are subject to a complex variety of state notice requirements. These differences create an uneven national standard for which types of electronic communication constitute sufficient notice. This statutory variance compels corporations …

Arbitration Case Law Update 2011, Jill I. Gross

Elisabeth Haub School of Law Faculty Publications

Parties to arbitration agreements sometimes invoke the judicial system to litigate collateral issues arising out of the arbitration process, such as arbitrability of some or all of the claims, arbitrator bias, and award enforcement or vacatur. When deciding these collateral issues arising out of securities arbitration, courts interpret and apply the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. (2010) (FAA). In this chapter, we identify recent judicial decisions in the area of arbitration law, and analyze their impact on securities arbitration practice.

Zambezi Valley Development Study, Lisa E. Sachs, Perrine Toledano

Columbia Center on Sustainable Investment Staff Publications

In June 2011, CCSI released a consultative draft report on Resource-Based Sustainable Development in the Lower Zambezi Basin, the result of a year-long inquiry into how the vast resource deposits in Tete province, combined with other major investments along the Nacala and Beira corridors, can be the basis for sustainable, equitable and inclusive growth in the Lower Zambezi Basin.

The report recommends a framework of actions by Mozambique and its public and private partners to ensure that Mozambique reaps a major boost to economic development from its vast resource endowments, while also respecting the profitability of private-sector investments in …