Securities Law Commons^™

Heyman Center Book Talk: Going Public, Heyman Center On Corporate Governance, Rachel Landy, Dakin Campbell, Megan Baier

2022–2023 Flyers

No abstract provided.

Private Inequity: Reform Rule 506 To Safely Accommodate Investment By Nonaccredited Investors, Allen C. Page

William & Mary Business Law Review

In 2012, Congress enacted Title III of the Jumpstart Our Business Startups Act (the “JOBS Act”), which it named the Crowdfund Act, to create an exemption from registration under the Securities Act of 1933 that, in the words of President Barack Obama, would allow “ordinary Americans . . . to go online and invest in entrepreneurs that they believe in.” While perhaps well-intentioned in principle, Regulation Crowdfunding imposes material limitations and costs on the issuer, leading most issuers to conclude that the inclusion of unaccredited investors in a crowdfunding campaign is not worth the complexity and expense. Furthermore, the most …

Just Say No? Shareholder Voting On Securities Class Actions, Albert H. Choi, Stephen J. Choi, Adam C. Pritchard

Articles

The U.S. securities laws allow security-holders to bring a class action suit against a public company and its officers who make materially misleading statements to the market. The class action mechanism allows individual claimants to aggregate their claims. This procedure mitigates the collective action problem among claimants, and also creates potential economies of scale. Despite these efficiencies, the class action mechanism has been criticized for being driven by attorneys and also encouraging nuisance suits. Although various statutory and doctrinal solutions have been proposed and implemented over the years, the concerns over the agency problem and nuisance suits persist. This paper …

Lecture Series | Robin Meister '86: Has The Spectacular Fall Of Archegos Taught Us Anything?, Ronald H. Filler Institute For Financial Services Law

Ronald H. Filler Institute for Financial Services Law

October 18, 2022

Attack On The Spac: The Push To Regulate Special Purpose Acquisition Companies As Investment Companies Under The Investment Company Act, Sean Meyer

University of Cincinnati Law Review

No abstract provided.

Lecture Series | Environmental, Social, And Governance (Esg): What's Next?, Ronald H. Filler Institute For Financial Services Law

Ronald H. Filler Institute for Financial Services Law

October 11, 2022

Taming Unicorns, Matthew Wansley

Indiana Law Journal

Until recently, most startups that grew to become valuable businesses chose to become public companies. In the last decade, the number of unicorns—private, venture-backed startups valued over one billion dollars—has increased more than tenfold. Some of these unicorns committed misconduct that they successfully concealed for years. The difficulty of trading private company securities facilitates the concealment of misconduct. The opportunity to profit from trading a company’s securities gives short sellers, analysts, and financial journalists incentives to uncover and reveal information about misconduct the company commits. Securities regulation and standard contract provisions restrict the trading of private company securities, which undermines …

Taming Unicorns, Matthew Wansley

Articles

Until recently, most startups that grew to become valuable businesses chose to become public companies. In the last decade, the number of unicorns—private, venture-backed startups valued over one billion dollars—has increased more than tenfold. Some of these unicorns committed misconduct that they successfully concealed for years. The difficulty of trading private company securities facilitates the concealment of misconduct. The opportunity to profit from trading a company’s securities gives short sellers, analysts, and financial journalists incentives to uncover and reveal information about misconduct the company commits. Securities regulation and standard contract provisions restrict the trading of private company securities, which undermines …

Whose Debt Is It Anyway?, Luís C. Calderón Gómez

Articles

Every year, companies issue hundreds of billions of dollars of debt with a feature carrying unclear tax consequences. So do individuals, who frequently tie their most significant financial asset to this type of instrument. Yet this instrument is not an exotic or innovative financial derivative, but is simple vanilla debt with two or more borrowers, or “co-obligated debt”. Co-obligated debt poses a conceptual problem for the law because it does not fit neatly into the simple and dyadic legal framework underlying the law’s conception of debt, where one creditor lends money to one borrower in exchange for a direct promise …

The Corporate Forum, Sergio Alberto Gramitto Ricci, Christina M. Sautter

Faculty Works

In this response to Professor Jill Fisch’s article "GameStop and the Reemergence of the Retail Investor," we focus on one of the risks associated with the growth of retail investing that Fisch surveys, uncontrolled information sourcing. Drawing on our work on retail investors, we revisit an instrument dear to the U.S. Securities and Exchange Commission, whose potential has not been unleashed so far, the corporate forum. Our response succinctly discusses the main mechanics of the corporate forum, the benefits the corporate forum could provide, and the feasibility hurdles that might undermine the success of corporate forums.

Special Purpose Acquisition Companies (Spacs) And The Sec, Neal Newman, Lawrence J. Trautman

Faculty Scholarship

Special Purpose Acquisition Companies (SPACs) are simply enterprises that raise money from the public with the intention of purchasing an existing business and becoming publicly traded in the securities markets. If the SPAC is successful in raising money and the acquisition takes place, the target company takes the SPAC’s place on a stock exchange in a transaction that resembles a public offering. Also known as “blank-check” or “reverse merger” companies, this process avoids many of the pitfalls of a traditional initial public offering.

During late 2020 and 2021 an unprecedented surge in the popularity and issuance of Special Purpose Acquisition …

The Debate Surrounding The Company Purpose In The Post-Pandemic Age, Leon Anidjar

Cardozo International & Comparative Law Review

The recent COVID-19 pandemic crisis produced many creative responses to confront its adverse results. Many companies worldwide were required to adopt innovative thinking by altering their business activities and revising their entire supply chain by attracting different types of resources delivered by various stakeholders. This Article explores the implications of this fundamental change on central theoretical assumptions of corporate governance. It articulates a new stakeholders-resources theory that explores governance norms as part of the firm's quest for inputs required to generate a competitive advantage. It applies this analytical framework in the debate on corporate purpose. This Article argues that companies …

A Proposed Sec Cyber Data Disclosure Advisory Commission, Lawrence J. Trautman, Neal Newman

Faculty Scholarship

Constant cyber threats result in: intellectual property loss; data disruption; ransomware attacks; theft of valuable company intellectual property and sensitive customer information. During March 2022, The Securities and Exchange Commission (SEC) issued a proposed rule addressing Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure, which requires: 1. Current reporting about material cybersecurity incidents; 2. Periodic disclosures about a registrant’s policies and procedures to identify and manage cybersecurity risks; 3. Management’s role in implementing cybersecurity policies and procedures; 4. Board of directors’ cybersecurity expertise, if any, and its oversight of cybersecurity risk; 5. Registrants to provide updates about previously reported cybersecurity …

How Fintech Cos. May Transform Real Estate Investment, Joseph Bizub, Justin Peralta, David J. Reiss

Cornell Law Faculty Publications

Until relatively recently, real estate with a small footprint — one-to-four-family homes as well as small retail, office and industrial buildings — were generally within the sole purview of small investors who invested locally.

Today, because of technological advances, these owner-occupants and investors face significant competition from institutional investors and an emerging class of decentralized finance investors.

These fintech companies are bringing new approaches to the challenges that real estate investing traditionally poses: illiquidity, lack of capital, lack of diversification and uneven access to market information.

This article focuses on how decentralized finance investors in particular are meeting those challenges …

Federal Courts Take The Wheel: The Delaware Supreme Court Validates Federal Forum Provisions For '33 Act Litigation In Salzberg V. Sciabacucchi, Brittany Mann

Villanova Law Review (1956 - )

No abstract provided.

Shareholder Appraisal Rights: Delaware's Flawed Market-Out Exception, Lynn Bai, William A. Murphy

University of Michigan Journal of Law Reform Caveat

State statutes give dissenting shareholders an appraisal right in some, but not all corporate mergers. With varying specifics, a widely adopted market-out exception denies appraisal if the shares are publicly traded. The rationale for market-out is that the public market offers a reliable valuation of the shares and a convenient exit to dissenting shareholders. A major criticism of market-out is that market prices may not reflect the full value of the shares due to information asymmetry in mergers involving conflicts of interests. Delaware’s market-out approach is drastically different from that adopted by the Model Business Corporation Act (MBCA), but both …

Quinquagenaries, Anthony Duggan

Dalhousie Law Journal

This article is part of a symposium to mark the 50th anniversary, or quinquagenary, of the Dalhousie Law Journal. The invitation to participate in the symposium asked authors to reflect on developments in their field over the past 50 years. My field is the law of secured transactions and, as it happens, the Canadian Personal Property Security Acts (PPSAs) are approaching their own quinquagenary. There have been numerous statutory and case law developments over the past 50 years, but one of the most remarkable turn of events is the influence the Canadian PPSAs have had on the reform of secured …

Theorizing Responsibility In The Investor State Dispute Resolution System, Kristen Boon

St. John's Law Review

(Excerpt)

The Investor-State Dispute System (“ISDS”) permits investors to sue states when their investments are injured. The system was designed to protect investors and impose responsibilities on states; it is uncontroversial to say that the ISDS system is one-sided. But a chorus of voices is now asking: should investors have responsibilities too? The narrative is one of injustice, driven by the perception that states have signed on to a system that has left them with large financial exposure to investors. This viewpoint has been reinforced, in the eyes of some, by the influence of big business, and by state losses …

Corporate Governance Guidelines: How To Improve Disclosure And Promote Better Corporate Governance In Public Companies, Jennifer O'Hare

Faculty Publications

If you are a shareholder of a public corporation, you may think it would be easy to find basic information about your shareholder rights, such as whether shareholders have the right to call special stockholder meetings. You would probably assume that the information would be disclosed in the company’s “Corporate Governance Guidelines,” (CGGs) which, according to a New York Stock Exchange (NYSE) rule, must be posted on the company’s website for shareholder review. But, as this article shows, companies are not required to disclose information about shareholder rights in their corporate governance guidelines, and most companies have chosen not to …

Climate Change, West Virginia V. Epa, And The Sec's Distinctive Statutory Mandate, Jill E. Fisch, George S. Georgiev, Donna M. Nagy, Cynthia A. Williams

Articles

No abstract provided.