Securities Law Commons^™

Clearing And Trade Execution Requirements For Otc Derivatives Swaps Under The Frank-Dodd Wall Street Reform And Consumer Protection Act, Willa E. Gibson

Akron Law Faculty Publications

This paper examines Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act entitled the “Wall Street Transparency and Accountability Act of 2010” (the “Act”). The Act provides a comprehensive regulatory framework for swap transactions that designates the Commodities Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) as the primary regulators of the OTC derivatives swap market. The Act provides a very broad definition of swaps to include most OTC derivatives transactions, and it grants the CFTC regulatory jurisdiction over them with the exception of security-based swaps to which the SEC is granted regulatory jurisdiction. …

Is The Public Utility Holding Company Act A Model For Breaking Up The Banks That Are Too-Big-To-Fail, Roberta S. Karmel

Faculty Scholarship

No abstract provided.

What Role For “Women,” “Men,” And Transpeople/Intersex People In Gender Equality: A Commentary, Edward D. Stein

Articles

This has been a very rich opening panel to what promises to be a terrific conference. The panelists' comments go in such varied directions that it is a challenge to be both a commentator and summarizer, especially when I have just a few minutes to speak. What I plan to do is say a little bit to draw together some of the themes that the panelists have been talking about that are connected to a couple of topics I have been working on while at the same time trying to look forward to some of the things I hope we …

A Summary Of The Sec Study On Investment Advisors And Broker-Dealers, Christine Lazaro

Faculty Publications

(Excerpt)

For some time, there has been a debate over what the appropriate standards of care are and should be for both broker-dealers and investment advisers. The standards vary based on where the investment professional is, where the customer is, what types of services are being offered and what responsibilities are assumed. Across the country, there is a complete lack of uniformity. Congress considered this when drafting the Dodd-Frank Wall Street Reform and Consumer Protection Act. Accordingly, pursuant to Dodd-Frank, Congress required the SEC (the “Commission”) to conduct a study to examine the current standards of care for both brokers …

Risk, Speculation, And Otc Derivatives: An Inaugural Essay For Convivium, Lynn A. Stout

Cornell Law Faculty Publications

Speculative trading, including speculative trading in derivatives, is often claimed to provide social benefits by decreasing risk and improving the accuracy of market prices. This assumption overlooks the possibility that speculation can be driven not just by differences in traders' risk aversion and information investments, but also by differences in traders' subjective expectations. Disagreement-based speculation erodes traders' returns, increases traders' risks, and can distort market prices. There is reason to believe that by 2008, the market for OTC derivatives may have been dominated by disagreement-based speculation that contributed to the Fall 2008 credit crisis.

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

Articles

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 …

Upper-Level Courses: Three Examplars, Mark Fagan, Tamar Frankel, Eric J. Gouvin, Kathy Z. Heller

Faculty Scholarship

I'm Mark Fagan, and I co-teach a course on securitization with Tamar Frankel at Boston University School of Law. We have come together to teach several interdisciplinary courses that combine law, business and public policy. Our course on securitization is a wonderful exemplar because it touches so many aspects of law as well as business and public policy.

We spent quite a bit of time wrestling with how to teach it. Do you teach it in a process fashion? Do you teach it by legal topic? Do you take examples and examine them? After much debate and discussion, we actually …

Enhanced "Blue Sky" Enforcement: A Path To Help Solve Our Public School Funding Dilemma, Marc I. Steinberg

Faculty Journal Articles and Book Chapters

No abstract provided.

Back To The Future[S]: A Critical Look At The Film Futures Ban, Paul G. Anderson

Cardozo Arts & Entertainment Law Journal

No abstract provided.

Governing Securities Class Actions, Elizabeth Chamblee Burch

Scholarly Works

This short essay, written for a symposium on The Principles and Politics of Aggregate Litigation: CAFA, PSLRA, and Beyond, decouples due process from a proceduralist’s intuition and explains why it matters in securities class actions. It begins by exploring several analytical models that shed light on the representative relationship in class actions, including a public law analogy to the administrative state, a private law analogy to corporate law, and another, more modern public law analogy to political governance. After finding that the political-governance model best addresses both sources of inadequate representation in securities class actions — rifts between class members …

Corporate Governance In An Age Of Separation Of Ownership From Ownership, Usha Rodrigues

Scholarly Works

The shareholder empowerment provisions enacted as part of the recent bailout legislation are internally incoherent because they fail to address the short-termist realities of shareholder ownership today. Ownership has separated from ownership in modern corporate America: individual investors now largely hold stock through mutual funds, pension funds, and hedge funds. The incentives of these short-term financial intermediaries only imperfectly reflect the interests of their long-term holders - an imbalance only exacerbated by the bailout’s corporate governance legislation. The bailout’s focus on shareholder empowerment tactics - such as proxy access, say-on-pay, and increased disclosure - makes little sense if shareholders are …

Macro- And Micro-Level Effects On Responsive Financial Regulation, Cristie Ford

All Faculty Publications

We are approaching the 20th anniversary of Ian Ayres’ and John Braithwaite’s 1992 book, Responsive Regulation. This paper, which was prepared for a September 2010 workshop at UBC, considers the implications of the recent financial crisis for Ayres’ and Braithwaite’s concept of “enforced self-regulation.” Its main thesis is that flexible and iterative regulatory strategies, such as enforced self-regulation and its progeny, are more porous to influence from different planes of action than prescriptive regulation would be. When focusing on technical regulatory design strategies, scholars should therefore be cautious about bracketing or underestimating the problem of power operating at the “macro …

Chasing The Greased Pig Down Wall Street: A Gatekeeper’S Guide To The Psychology, Culture And Ethics Of Financial Risk-Taking, Donald C. Langevoort

Georgetown Law Faculty Publications and Other Works

The current financial crisis has once again focused attention on lawyers, corporate directors and auditors as gatekeepers, who are expected to introduce some degree of cognitive independence to the task of risk assessment and risk management in public companies, including financial services firms. This essay examines the psychological and cultural forces that may distort risk perception and risk motivation in hyper-competitive firms, beyond the standard economic incentives associated with agency costs and moral hazards, warning gatekeepers against too easily assuming that all is well when insiders display high levels of intensity, focus and devotion to hard-to-achieve goals. In fact, these …

Activist Distressed Debtholders: The New Barbarians At The Gate?, Michelle M. Harner

Faculty Scholarship

The term “corporate raiders” previously struck fear in the hearts of corporate boards and management teams. It generally refers to investors who target undervalued, cash-flush or mismanaged companies and initiate a hostile takeover of the company. Corporate raiders earned their name in part because of their focus on value extraction, which could entail dismantling a company and selling off its crown jewels. Today, the term often conjures up images of Michael Milken, Henry Kravis or the movie character Gordon Gekko, but the alleged threat posed to companies by corporate raiders is less prevalent—at least with respect to the traditional use …

Will The Cftc Defy Congress's Mandate To Stop Excessive Speculation In Commodity Markets And Aid And Abet Hyperinflation In World Food And Energy Prices: Analysis Of The Cftc's Proposed Rules On Speculative Position Limits, Michael Greenberger

Faculty Scholarship

On January 26, 2011, the Commodity Futures Trading Commission issued the Notice of Proposed Rulemaking on Position Limits for Derivatives pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act.  The proposed rules are designed to implement the historic Congressional mandate of the Commodity Exchange Act, as amended by Section 737 of the Dodd-Frank Act, to ban excessive speculation from the derivatives market, i.e., the speculation which exceeds the need for liquidity by commercial handlers hedging price risk in these markets. Section 737 is the result of multi-year consideration by Congress, during which a strong consensus was reached …

Life After Morrison: Extraterritoriality And Rico, R. D. Mello

Vanderbilt Journal of Transnational Law

For years, the federal courts of appeals have borrowed heavily from securities law jurisprudence in developing a framework for analyzing claims under the Racketeer Influenced and Corrupt Organizations Act (RICO). Last year, in the case of Morrison v. National Australia Bank, the Supreme Court issued a ground-breaking opinion that rejected decades of lower court precedent related to the extraterritorial application of U.S. securities laws and reemphasized the vitality of the presumption against extraterritoriality. Because of the parallel development of securities law and RICO jurisprudence, Morrison will have significant consequences for the application of RICO in cases involving foreign defendants and …

Punctuated Equilibrium: A Model For Administrative Evolution, Mark Niles

Scholarly Articles in Law Reviews & Journals

No abstract provided.

Morrison V. National Australia Bank: Defining The Domestic Interest In International Securities Litigation, Hannah Buxbaum

Articles by Maurer Faculty

This articles uses the lens of the Morrison v. National Australia Bank to look at domestic and international securities regulation.

Insider Trading, Congressional Officials, And Duties Of Entrustment, Donna M. Nagy

Articles by Maurer Faculty

This article refutes what has become the conventional wisdom that insider trading by members of Congress and legislative staffers is “totally legal” because such congressional officials are immune from federal insider trading law. It argues that this well-worn claim is rooted in twin misconceptions based on: (1) a lack of regard for the broad and sweeping duties of entrustment which attach to public office and (2) an unduly restrictive view of Supreme Court precedents, which have interpreted Rule 10b-5 of the Securities Exchange Act to impose liability whenever a person trades securities on the basis of material nonpublic information in …

Promoting Employee Voice In The American Economy: A Call For Comprehensive Reform, Kenneth G. Dau-Schmidt

Articles by Maurer Faculty

It has become apparent that there are serious deficiencies in the American model of production. Our model of corporate governance has recently come under intense scrutiny in the academic literature and the popular press. There are increasing concerns that American corporations are too focused on short-run profits and stock prices, at the expense of long-term strategies and investments that would benefit the long-run value of the firm, employees, and the American economy at large. In the pursuit of short-run shareholder interests, American corporations have bestowed on senior executives enormous compensation packages that seem increasingly divorced from any notion of rationality, …