Securities Law Commons^™

Proving Equal Access To Capital In The Age Of The Startup: The Case For Federal Pre-Emption Of State Blue-Sky Laws, Gerry Griffith

The Journal of Business, Entrepreneurship & the Law

Section I of this comment examines the global opportunities available to startups in the digital economy and how startups’ capital demands evolved in the new era of business. Section II analyzes the differences between merit-based securities regulation existing at the state level and disclosure-based regulation, which is the federal regulatory scheme. This Section provides an overview of the three most common methods of restricted securities registration at the state level. Section III examines the development of blue sky laws and the role states originally played in protecting investors. This Section further explores the evolving relationship between state and federal securities …

Insider Trading Framework In United States And Egyptian Stock Markets, Elsayed Eldaydamony

The Journal of Business, Entrepreneurship & the Law

This article examines the law of insider trading in both the American and Egyptian legal systems. It seeks to pinpoint the policy rationale behind prohibiting insider trading, the theories of civil enforcement and criminalization, and the concept of tipping in the United States. It also analyzes the express statutory prohibition under Egyptian law. Furthermore, it explains the doctrinal link between securities fraud and insider trading in the U.S. as well as the enforcement mechanisms in place at the SEC, the NYSE, and the NASDAQ. It also surveys the surveillance authority of the Egyptian Financial Regularity Authority and of the Egyptian …

Kill Cammer: Securities Litigation Without Junk Science, J. B. Heaton

William & Mary Business Law Review

Securities litigation is a hotbed of junk science concerning market efficiency. This Article explains why and suggests a way out. In its 1988 decision in Basic v. Levinson, the Supreme Court endorsed the fraud on the market presumption for securities traded in an efficient market. Faced with the task of determining market efficiency, courts throughout the nation embraced the ad hoc speculations of a first-mover district court that proclaimed, in Cammer v. Bloom, how to allege (and presumably prove) facts that would do just that. The Cammer court’s analysis did not rely on financial economics for its notions, but instead …

Securities Exchange Act Section 4e(A): Toothless "Internal-Timing Directive" Or Statute Of Limitation?, Richard E. Brodsky

William & Mary Business Law Review

The Securities and Exchange Commission has a problem, and everyone knows it: its investigative process suffers from excessive delay, which harms both individuals and entity it investigates and its own enforcement program. This problem has long been recognized and complained about, but never remedied.

In 2010, Congress passed a law specifically designed to solve the problem of excessive delay but, the way the SEC has read the law—which has been acquiesced in by the courts and ignored by subsequent Congresses—has rendered it toothless and essentially meaningless. This has been accomplished, first, by the Commission’s cabined interpretation of the purpose of …

Cryptocurrencies' Revolt Against The Bsa: Why The Supreme Court Should Hold That The Bank Secrecy Act Violates The Fourth Amendment, Jeremy Ciarabellini

Seattle Journal of Technology, Environmental, & Innovation Law

The Bank Secrecy Act (BSA) creates a Hobson’s choice: one must either struggle to function in modern society without a bank account or submit to financial surveillance by the government. Both choices result in drastic consequences.

Regulatory Approaches To Consumer Protection In The Financial Sector And Beyond: Toward A Smart Disclosure Regime?, Nydia Remolina, Aurelio Gurrea-Martinez, Yvonne Ai-Chi Loh, David R. Hardoon

Centre for AI & Data Governance (2019-2025)

Traditionally, consumer and data protection policies evolved from issues of consent and information disclosure. The purpose of these regulatory approaches is the protection of consumers by reducing some contracting failures, such as asymmetries of information and a lower bargaining power, especially in transactions involving complex issues such as financial products and sensitive personal data. In the past, regulators have responded to privacy and consumer protection by adopting what this paper refers to as an “imperfectly informed regime”, in which consumers do not receive full information about the risks associated with their decisions, even if they are still protected through a …

From Inactivity To Full Enforcement: The Implementation Of The "Do No Harm" Approach In Initial Coin Offerings, Marco Dell'erba

Michigan Technology Law Review

This Article analyzes the way the Securities and Exchange Commission (“SEC”) has enforced securities laws with regard to Initial Coin Offerings (“ICOs”). In a speech held in 2016, the U.S. Commodities Futures Trading Commission (“CFTC”) Chairman Christopher Giancarlo emphasized the similarities between the advent of the blockchain technology and the Internet era. He offered the “do no harm” approach as the best way to regulate blockchain technology. The Clinton administration implemented the “do no harm” approach at the beginning of the Internet Era in the 1990s when regulators sought to support technological innovations without stifling them with burdensome rules.

This …

Cryptocurrencies: An Overview, Investment Investigation, Comparative Analysis, And Regulatory Proposals, Jacob Franzen

Theses/Capstones/Creative Projects

With cryptocurrencies moving out of obscurity and into the public eye, the initial purpose of this research paper is to provide the history of cryptocurrencies, to explain the complex workings in and around cryptocurrencies, investigate their investment potential, and to draw attention to their potential for misuse. To follow, the primary purpose is to create a platform on which to compare cryptocurrencies with more common mediums of exchange, analyze their current international regulatory climate, highlight their trends within influential nations, discuss their pending and future regulation, and provide personal proposals for additional regulation. Due to the complex nature of the …

The Law And Practice Of Shareholder Inspection Rights: A Comparative Analysis Of China And The United States, Randall S. Thomas, Robin Hui Huang

Vanderbilt Law School Faculty Publications

Shareholder inspection rights allow a shareholder to access the relevant documents of the company in which they hold an interest, so as to address the problem of information asymmetry and reduce the agency costs inherent in the corporate structure. While Chinese corporate governance and American corporate governance face different sets of agency cost problems, this Article shows that shareholder inspection rights play an important role in both China and the United States. On the books, while shareholder inspection rights in both countries are broadly similar, there are some important differences on issues such as the proper purpose requirement. The empirical …

Morrison And Cryptocurrencies: Is It Time To Revisit The Extraterritorial Application Of Rule 10b-5?, Eleanor B. Eastham

Georgia Journal of International & Comparative Law

No abstract provided.

Who Carries The Burden Of Proving Causation In An Erisa Section 409(A) Suit For Breach Of Fiduciary Duty?, Edward Rivin

University of Cincinnati Law Review

No abstract provided.

High Crimes: Liability For Directors Of Retail Marijuana Corporations, Lauren A. Newell

Law Faculty Scholarship

Selling retail marijuana in the United States is illegal — or is it? A rising number of states have legalized the retail sale of marijuana and are busily regulating these sales and the companies that make them. Even so, the sale of marijuana is a crime under federal law. Are companies that sell retail marijuana duly sanctioned, productive contributors to their state economies, or are they felons just waiting for the wheels of justice to turn in their direction? At this moment, no one can answer that question with certainty.

What is certain is that more companies are being formed …

Comment On Us Trade And Investment Agreements Submitted To Ustr, Columbia Center On Sustainable Investment

Columbia Center on Sustainable Investment Staff Publications

Comments to USTR Re: U.S.-Kenya Trade Agreement (April 28, 2020): CCSI, in response to the United States Trade Representative’s request for public comment to inform its approach to a U.S.-Kenya Trade Agreement, submitted Comments elaborating on our main points that (1) investor-state dispute settlement should not be included in any U.S.-Kenya agreement and (2) principles that should guide an investment chapter or investment provisions in any such agreement should (a) strategically support cross-border investment that produces positive development outcomes for the U.S. and Kenya, (b) facilitate and support good governance of investment projects, and (c) enhance cooperation to solve challenges …

Morrison V. National Australia Bank And The Growth Of The Global Securities Class Action Under The Dutch Wcam, Steven Mcnamara

Buffalo Law Review

In 2010 the U.S. Supreme Court fundamentally reset the jurisdictional sweep of U.S. securities law in Morrison v. National Australia Bank. No longer could foreign plaintiffs access the U.S. courts if a defendant engaged in conduct in the U.S. affecting securities prices outside the U.S., or conduct outside the U.S. had a significant effect on securities prices inside the U.S. Under Morrison’s new “transactional test” only purchasers of securities on a U.S. exchange or in a U.S. transaction would be able to bring securities fraud claim under Section 10(b). The Morrison decision therefore greatly heightens the importance of alternative non-U.S. …

Little Power Struggles Everywhere: Attacks On The Administrative State At The Securities And Exchange Commission, Roberta S. Karmel

Faculty Scholarship

No abstract provided.

Using A Hybrid Securities Test To Tackle The Problem Of Pyramid Fraud, Corey Matthews

Fordham Law Review

This Note examines federal securities law as a tool to deter and regulate illegal pyramid schemes. Pyramid schemes are among the most prevalent forms of consumer fraud in the United States and they victimize thousands of individuals every year. The rise of the internet and social media has made it even easier for pyramid promoters to target potential recruits, often those who are already particularly vulnerable to consumer fraud. The federal securities laws have proven to be robust regulatory tools against pyramid schemes. However, the test used by federal courts to determine whether a scheme meets the definition of a …

Underwriting Crowdfunding, Darian M. Ibrahim

Faculty Publications

Crowdfunding has more in common with an initial public offering (IPO) than may be readily apparent. Both are coordinated sales of securities to public investors (in crowdfunding's case, the "crowd"). Both rely on disclosure to mitigate information asymmetries between a company and its investors. Yet IPOs protect investors better for two reasons. First, companies undertaking an IPO have significant track records to disclose, unlike nascent startups. Second, IPOs are underwritten, meaning a reputational intermediary vouches for them.

This Essay considers applying underwriting to Regulation Crowdfunding (Regulation CF) to allow crowdfunding to mimic an IPO. It tackles questions such as: Who …

The Misuse Of Tobin’S Q, Robert Bartlett, Frank Partnoy

Vanderbilt Law Review

In recent years, scholars have addressed the most important topics in corporate law based on a flawed assumption: that the ratio of the market value of a corporation’s securities to their book value is a valid measure of the value of the corporation. The topics have included staggered boards, incorporation in Delaware, shareholder activism, dual-class share structures, share ownership, board diversity, and other significant aspects of corporate governance. We trace the history of this flawed assumption, and document how it emerged from Tobin’s q, a concept from an unrelated area in macroeconomics. We show that scholars have misused Tobin’s q, …

Casting Light On The Shade: Using Securities Laws To Draw New Contours In Art Investment Regulation, Emma Snover

Fordham Law Review

The disparate treatment of art investments under the Internal Revenue Code and the Securities Exchange Act of 1934 poses a problem. This disparity generates inequities among art investors and between art investors and investors in traditional securities markets. The Internal Revenue Code considers both art and traditional securities to be capital assets with no material distinction. For example, prior to the 2017 tax act, art investors could defer the realization of capital gains through like-kind exchanges of works of art under section 1031 of the Internal Revenue Code. Currently, under section 1400Z-2, an addition to the Internal Revenue Code through …

Recommendations And Comments On The Draft Vertical Merger Guidelines, Jonathan B. Baker, Nancy L. Rose, Steven C. Salop, Fiona Scott Morton

Georgetown Law Faculty Publications and Other Works

These recommendations and comments respond to the request by the Federal Trade Commission and the Department of Justice’s Antitrust Division for public comment on the draft 2020 Vertical Merger Guidelines. We commend the agencies for updating the 1984 non-horizontal merger guidelines by recognizing the substantial advances in economic thinking about vertical mergers in the thirty-five years since those guidelines were issued. Our comments emphasize four issues: (i) the treatment of the elimination of double marginalization (“EDM”), particularly that the draft vertical merger guidelines appear inappropriately to make proof of cognizability part of the agencies burden and that they appear to …