Is The Pcaob A "Heavily Controlled Component" Of The Sec?: An Essential Question In The Constitutional Controversy,
2010
Indiana University Maurer School of Law
Is The Pcaob A "Heavily Controlled Component" Of The Sec?: An Essential Question In The Constitutional Controversy, Donna M. Nagy
Articles by Maurer Faculty
The U.S. Supreme Court recently heard oral arguments in Free Enterprise Fund v. Public Company Accounting Oversight Board, described by D.C. Circuit Judge Brett Kavanaugh as “the most important separation-of-powers case regarding the President’s appointment and removal powers to reach the courts in the last 20 years.” Established by Congress as the cornerstone of the Sarbanes-Oxley Act of 2002, the PCAOB was structured as a strong, independent board in the private sector, to oversee the conduct of auditors of public companies.
This Article challenges the D.C. Circuit’s depiction of the PCAOB as “a heavily controlled component” of the SEC, and …
Fiduciaries With Conflicting Obligations,
2010
Duke Law School
Fiduciaries With Conflicting Obligations, Steven L. Schwarcz
Faculty Scholarship
This Article examines the dilemma of a fiduciary acting for parties who, as among themselves, have conflicting commercial interests - an inquiry fundamentally different from that of the traditional study of conflicts between fiduciaries and their beneficiaries. Existing legal principles do not fully capture this dilemma because agency law focuses primarily on an agent’s duty to a given principal, not on conflicts among principals; trust law focuses primarily on gratuitous transfers; and commercial law generally addresses arm’s length, not fiduciary, relationships. The dilemma has become critically important, however, as defaults increase in the multitude of conflicting securities (e.g., classes of …
Lying And Getting Caught: An Empirical Study Of The Effect Of Securities Class Action Settlements On Targeted Firms,
2010
Duke Law School
Lying And Getting Caught: An Empirical Study Of The Effect Of Securities Class Action Settlements On Targeted Firms, James D. Cox, Lynn Bai, Randall S. Thomas
Faculty Scholarship
The ongoing Great Recession has triggered numerous proposals to improve the regulation of financial markets and, most importantly, the regulation of organizations such as credit rating agencies, underwriters, hedge funds, and banks, whose behavior is believed to have caused the credit crisis that spawned the economic collapse. Not surprisingly, some of the reform efforts seek to strengthen the use of private litigation. Private suits have long been championed as a necessary mechanism not only to compensate investors for harms they suffer from financial frauds but also to enhance deterrence of wrongdoing. However, in recent years there has been a chorus …
Distorting Legal Principles,
2010
Duke Law School
Distorting Legal Principles, Steven L. Schwarcz
Faculty Scholarship
Legal principles enable society to order itself by preserving broadly based expectations. Sometimes, however, parties transact in ways that are so inconsistent with generally accepted principles as to create uncertainty or confusion that undermines the basis for reasoning afforded by the principles. Such a distortion might occur, for example, if a normally mandatory legal rule were unexpectedly treated as a default rule. This article explores the problem of distorting legal principles, initially focusing on rehypothecation, a distortion whose uncertainty and confusion contributed to the downfall of Lehman Brothers and the resulting global financial crisis. But not all distortions are, on …
The Market Reaction To Legal Shocks And Their Antidotes: Lessons From The Sovereign Debt Market,
2010
Duke Law School
The Market Reaction To Legal Shocks And Their Antidotes: Lessons From The Sovereign Debt Market, Michael Bradley, James D. Cox, Mitu Gulati
Faculty Scholarship
In October 2000 a hedge fund holding an unpaid debt claim won an enormous victory against the debtor, the Republic of Peru, through an opportunistic interpretation of the common pari passu clause by a Brussels court. This development was met by charges from policy makers and practitioners that the court's decision (its novel interpretation of the pari passu clause) would lead to a dramatic increase in the risks of holdout litigation faced by sovereign debtors. Over the ensuing years, multiple reform solutions were proposed including the revision of certain contractual terms, the filing of amicus briefs in a key case, …
Fending For Themselves: Why Securities Regulations Should Encourage Angel Groups,
2010
UC Hastings College of the Law
Fending For Themselves: Why Securities Regulations Should Encourage Angel Groups, Abraham J. B. Cable
Faculty Scholarship
No abstract provided.
In Praise Of Process: Examining The Sec, Rule 14a-8(I)(8), And Afscme V. Aig,
2010
St. Mary's University School of Law
In Praise Of Process: Examining The Sec, Rule 14a-8(I)(8), And Afscme V. Aig, Jena Martin
Faculty Articles
Part one of this essay will discuss the rule, including a brief analysis of proxy access generally and the "election exclusion" specifically. Part two will examine the AFSCME v. AIG case and the SEC's response thereto in more detail-discussing the arguments posited both for and against increased shareholder access, as well as the aftermath of the SEC's decision. Part three will analyze how the SEC's failure to change Rule 14a-8(i)(8) to allow greater shareholder access specifically caused one thread in the financial crisis-as a direct result of a loss of shareholder empowerment. Finally, part four offers an epilogue-a discussion of …
