Securities Law Commons^™

Relational Enforcement Of Stock Exchange Rules, Geeyoung Min, Kwon-Yong Jin

BYU Law Review

Stock exchanges, as regulating entities supervised by the Securities and Exchange Commission (SEC), have wielded their rulemaking power on various corporate governance issues, ranging from the independent board committee requirement adopted in 2003 to the board diversity requirement approved in 2021. Simultaneously, as for-profit corporate entities, major stock exchanges have been competing against each other to attract and retain more companies. This dual status of stock exchanges — as regulators and as profit driven entities — brings into question the stock exchanges' incentive to enforce their own rules against listed companies. What happens if a listed company violates stock exchange …

Avoiding Wasteful Competition: Why Trading On Inside Information Should Be Illegal, Michael D. Guttentag

Brooklyn Law Review

This article offers a new and compelling reason to make all trading based on inside information illegal. The value realized by trading on inside information is unusual in two respects. First, inside information is produced at little or no incremental cost and is nevertheless quite valuable. Second, profits made from trading on inside information come largely at the expense of others. When the value of something exceeds the cost to produce it, a wasteful race to be the first to capture the resulting surplus is likely to ensue. Similarly, resources expended solely to take something of value from others are …

Business Judgment Rule Or Due Diligence? How To Reduce Vicarious Liability For Spac Directors And Officers, Beau Duty

University of Arkansas at Little Rock Law Review

No abstract provided.

Structural Barriers To Inclusion In Arbitrator Pools, Nicole G. Iannarone

Washington Law Review

Critics increasingly challenge mandatory arbitration because the pools from which decisionmakers are selected are neither diverse nor inclusive. Evaluating diversity and inclusion in arbitrator pools is difficult due to the black box nature of mandatory arbitration. This Article evaluates inclusion in arbitrator pools through a case study on securities arbitration. The Article relies upon the relatively greater transparency of the Financial Industry Regulatory Authority (FINRA) forum. It begins by describing the unique role that small claims securities arbitration plays in maintaining investor trust and confidence in the securities markets before describing why ensuring that the FINRA arbitrator pool is both …

Do Esg Funds Deliver On Their Promises?, Quinn Curtis, Jill Fisch, Adriana Z. Robertson

Michigan Law Review

Corporations have received growing criticism for contributing to climate change, perpetuating racial and gender inequality, and failing to address other pressing social issues. In response to these concerns, shareholders are increasingly focusing on environmental, social, and corporate governance (ESG) criteria in selecting investments, and asset managers are responding by offering a growing number of ESG mutual funds. The flow of assets into ESG is one of the most dramatic trends in asset management.

But are these funds giving investors what they promise? This question has attracted the attention of regulators, with the Department of Labor and the Securities and Exchange …

Murky Materiality & Scattered Standards: In Favor Of A More Uniform System Of Sst Disclosure Requirements, Megan Ganley

Fordham Law Review

The Securities and Exchange Commission (SEC) requires corporations to disclose their business in or with state sponsors of terrorism (SSTs). The SEC solicits these disclosures with varying standards arising under several different mechanisms. These mechanisms include the requirements of the materiality standard, the provisions of Regulation S-K, targeted inquiry in individually issued comment letters, and affirmative requirements mandated under specific legislation. Each of these mechanisms requires disclosure of slightly different information regarding SSTs with varying degrees of exactitude. This Note examines the SEC’s current SST disclosure framework, considering the benefits, as well as the criticisms, of these disclosure mandates. This …

Karmel’S Dissent: The Sec’S Use And Occasional Misuse Of Section 21(A) Reports Of Investigation, James J. Park

Brooklyn Journal of Corporate, Financial & Commercial Law

Section 21(a) of the Securities Exchange Act gives the SEC the option of publishing a report of its findings after conducting an investigation. Typically, the SEC issues such reports about once a year to highlight major compliance and enforcement issues. This Article examines the SEC’s use of Section 21(a) investigative reports with special attention to its 1979 report in Spartek, where Commissioner Roberta Karmel filed a famous dissent. In that opinion, she argued that the report effectively sanctioned conduct over which the SEC did not have jurisdiction and that Spartek did not have sufficient notice of its regulatory obligations. While …

Full Of Questions And Wonder: Roberta Karmel's Legacy, Alan R. Palmiter

Brooklyn Journal of Corporate, Financial & Commercial Law

Roberta Karmel has been perhaps the keenest observer and commentator on the securities industry and its regulation for the past five decades. Her observations about securities regulation—during the SEC’s precocious adolescence and into its young adulthood—have framed the academic inquiry of all of us who have written on the subject during this period. But more valuable to us than her observations have been her questions, full of wonder and penetrating insight. We securities academics, the enterprise of securities regulation, and especially market capitalism, all owe an enormous debt of gratitude to Professor Karmel.

Treat Thy Neighbor As Thyself? Equal Protection And The Scope Of Rluipa’S Equal Terms Clause, Noah Kane

Cardozo Law Review

No abstract provided.

War & The Constitution: Chemical Agents And The Rights Of Protestors, Yomidalys GüIchardo Morel

Cardozo Law Review

No abstract provided.

Securities Law: Overview And Contemporary Issues, Neal Newman, Lawrence J. Trautman

Faculty Scholarship

This is not your grandfather’s SEC anymore. Rapid technological change has resulted in novel regulatory issues and challenges, as law and policy struggles to keep pace. The U.S. Securities and Exchange Commission (SEC) reports that “the U.S. capital markets are the deepest, most dynamic, and most liquid in the world. They also have evolved to become increasingly fast and extraordinarily complex. It is our job to be responsive and innovative in the face of significant market developments and trends.” With global markets increasingly interdependent and interconnected and, “as technological advancements and commercial developments have changed how our securities markets operate, …

Lunch Lecture | Insider Trading: Overview And Developments, Ronald H. Filler Institute For Financial Services Law

Ronald H. Filler Institute for Financial Services Law

November 16, 2021

To Remove Or Not To Remove - Is That The Question In 1933 Act Securities Cases?, Tanya Pierce

Faculty Scholarship

Litigants spend immense time and money fighting over procedure. That fact is especially true for procedural rules concerning where a case may be heard—which, in the context of class actions, can determine the viability of claims almost regardless of their underlying merit. The potential for class certification, which tends to be greater in state than in federal courts, can transform claims that alone are too small to even justify suing into threats so large that defendants routinely use the words “judicial blackmail” to describe them. This paper focuses on a growing conflict between federal statutory removal provisions that arises in …

A Response To Calls For Sec Mandated Esg Disclosure, Amanda M. Rose

Vanderbilt Law School Faculty Publications

This Article responds to recent proposals calling for the SEC to adopt a mandatory ESG-disclosure framework. It illustrates how the breadth and vagueness of these proposals obscures the important--and controversial-- policy questions that would need to be addressed before the SEC could move forward on the proposals in a principled way. The questions raised include some of the most contested in the field of corporate and securities law, such as the value of interjurisdictional competition for corporate charters, the right way to conceptualize the purpose of the corporation, the proper allocation of managerial power as between the board and shareholders, …

Arbitrating Security Class Actions: The Limits Of Forum Selection Bylaws, Paul Schochet

St. John's Law Review

No abstract provided.

Lunch Lecture | Herbert Moore Jr. '02: Organizing A Venture Capital Fund: An Overview, Ronald H. Filler Institute For Financial Services Law

Ronald H. Filler Institute for Financial Services Law

October 19, 2021

A Conversation About Current Issues Facing The Global Financial Industry, Ronald H. Filler Institute For Financial Services Law

Ronald H. Filler Institute for Financial Services Law

October 18, 2021

The Breakdown Of The Public-Private Divide In Securities Law: Causes, Consequences, And Reforms, George S. Georgiev

Articles

As a regulatory scheme, U.S. securities law has traditionally been designed around a set of lines-the 'public-private divide"-which separate public companies, public capital, and public markets, from private companies, private capital, and private markets. Until the early 2000s, the lines were successful in establishing two largely coherent legal realms-a highly regulated public realm and a lightly regulated private realm. A series of bold and often-inconsistent reforms between 2002 and 2020, however, have transformed this longstanding regime into a low-friction system wherein public capital flows to both public and private companies, private capital is ever more abundant, and firms can effectively …

Corporate Governance Gaming: The Collective Power Of Retail Investors, Sergio Alberto Gramitto Ricci, Christina M. Sautter

Faculty Works

The GameStop saga and meme stock frenzy have shown the pathway to the most disruptive revolution in corporate governance of the millennium. New generations of retail investors use technologies, online forums, and gaming dynamics to coordinate their actions and obtain unprecedented results. Signals indicate that these investors, whom we can dub wireless investors, are currently expanding their actions to corporate governance. Wireless investors’ generational characteristics suggest that they will use corporate governance to pursue social and environmental causes. In fact, wireless investors can set in motion a social movement able to bring business corporations to serve their original partly-private-partly-public purpose. …

The Breakdown Of The Public–Private Divide In Securities Law: Causes, Consequences, And Reforms, George S. Georgiev

Faculty Articles

As a regulatory scheme, U.S. securities law has traditionally been designed around a set of lines—the “public–private divide”—which separate public companies, public capital, and public markets, from private companies, private capital, and private markets. Until the early 2000s, the lines were successful in establishing two largely coherent legal realms—a highly regulated public realm and a lightly regulated private realm. A series of bold and often-inconsistent reforms between 2002 and 2020, however, have transformed this longstanding regime into a low-friction system wherein public capital flows to both public and private companies, private capital is ever more abundant, and firms can effectively …