Securities Law Commons^™

Investments And Security: Balancing International Commerce And National Security With Expanded Authority For The Committee On Foreign Investment In The United States, Christopher Jusuf

Catholic University Journal of Law and Technology

What happens when the interests of international trade conflict with those of national security? This article analyzes this question within the context of the Committee on Foreign Investment in the United States (CFIUS), an obscure but increasingly powerful executive panel that exercises the president's broad authority to unilaterally interfere with and stop international mergers and acquisitions. With the passage of the Foreign Investment Risk Review Modernization Act (FIRRMA), CFIUS is more powerful now than it has ever been, and should be a key consideration for any company seeking to do business with foreign investors. This is especially true as America …

The Final Frontier: Are Class Action Waivers In Broker-Dealer Employment Agreements Enforceable?, Jill I. Gross

Elisabeth Haub School of Law Faculty Publications

How would a court resolve a broker-dealer's action to enforce its class action waiver, which would require the court to disregard FINRA Rule 13204? The Supreme Court has identified one exception to the FAA's mandate: if a “contrary congressional command” displaces the FAA. Thus far, the Court has not had occasion to examine whether a class action waiver in a broker-dealer's employment agreement with an employee is enforceable under this exception. While the Court seems very supportive of these waivers, the securities industry is different. Securities arbitration is heavily regulated, and pronouncements by the SEC--when exercising power expressly delegated to …

Crowdfunding’S Culture Of Noncompliance: An Empirical Analysis, Mercer Bullard

Lewis & Clark Law Review

The JOBS Act of 2012 launched a number of experiments in the regulation of securities offerings. The exemption it created that allows online equity crowdfunding offerings to retail investors garnered the most attention, in part due to widespread concerns regarding the potential for fraud and abuse. More than three years after the first crowdfunding offering, no empirical analysis of compliance has been conducted that would debunk or confirm critics’ concerns. This Article plugs that gap by analyzing a sample of 362 crowdfunding offerings and evaluating compliance with some of crowdfunding regulation’s simplest, most fundamental regulatory requirements. During the first 13 …

Business Playing Politics: Strengthening Shareholders’ Rights In The Age Of Ceo Activism, Savannah J. Wolfe

Lewis & Clark Law Review

The United States has entered a new age of business: the Age of CEO Activism. “CEO activism” is the phenomenon where Chief Executive Officers (“CEOs”) and other C-Suite members use their executive platforms to speak out on political, social, and environmental topics not directly related to their businesses. These fiduciaries have become more and more vocal about their political or social ideology, especially around largescale political events.

In this age, however, shareholders are left with scant rights due to the overbroad protections granted by the business judgment rule. Instead, shareholders must sit passively as their C-Suite members charge blindly into …

Insider Trading And Cryptoassets: The Waters Just Got Muddier, John P. Anderson

Journal Articles

The absence of any clear guidance on when a digital asset is a security is a problem that has ramifications far beyond this article’s limited focus on our insider trading enforcement regime. Nevertheless, I have argued that the impending application of our insider trading laws to cryptoassets helps to illustrate why it is unfair and unjust to force market participants to wait much longer for a definitive answer to the question of when a digital asset is a security.

A Tale Of Two Cities: Mark Cuban, David Einhorn, And The Ethics Of Insider Trading Reform, John P. Anderson

Journal Articles

The similarities between the insider trading stories of Mark Cuban and David Einhorn suggest that their circumstances are not uncommon, and the contrasting results also help to illustrate some significant differences between the common law fraud-based insider trading regime in the U.S. and the statutory parity-of-information regime in Europe. And, as Congress and the SEC continue to weigh the merits of reform in the U.S., the examples of Cuban and Einhorn are particularly instructive for the reasons to be developed in the remaining sections of this Article. First, as will be explained in Part II of this Article, contrasting the …

Negative Activism, Barbara A. Bliss, Peter Molk, Frank Partnoy

UF Law Faculty Publications

Shareholder activism has become one of the most important and widely studied topics in law and finance. To date, popular and academic accounts have focused on what we call “positive activism,” where activists seek to profit from positive changes in the share prices of targeted firms. In this Article, we undertake the first comprehensive study of positive activism’s mirror image, which we term “negative activism.” Whereas positive activists focus on increasing share prices, negative activists take short positions to profit from decreasing share prices.

We develop a descriptive typology of three categories of negative activism and use a private database …

Securities Regulation, George Lee Flint Jr.

SMU Annual Texas Survey

No abstract provided.

Rico Extraterritoriality, Rjr Nabisco And Shareholder Residence – A Key Consideration In Determining Rico Domestic Injury, Laurence A. Steckman, Esq., Adam J. Rader, Esq.

Touro Law Review

No abstract provided.

Petition For Rulemaking On Short And Distort, John C. Coffee Jr., Joshua Mitts, James D. Cox, Peter Molk, Edward Greene, Randall S. Thomas, Meyer-Eisenberg, Robert B. Thompson, Colleen Honigsberg, Andrew Verstein, Donald C. Langevoort, Charles K. Whitehead

Faculty Scholarship

Today, some hedge funds attack public companies for the sole purpose of inducing a short-lived panic which they can exploit for profit. This sort of market manipulation harms average investors who entrust financial markets with their retirement savings. While short selling serves a critical function in the capital markets, some short sellers disseminate negative opinion about a company, inducing a panic and sharp decline in the stock price, and rapidly close that position for a profit prior to the price partially or fully rebounding. We urge the SEC to enact two rules which will discourage manipulative short selling. The petition …

Revising Boilerplate: A Comparison Of Private And Public Company Transactions, Stephen J. Choi, Robert E. Scott, G. Mitu Gulati

Faculty Scholarship

The textbook model of commercial contracts between sophisticated parties holds that terms are proposed, negotiated and ultimately priced by the parties. Parties reach agreement on contract provisions that best suit their transaction with the goal of maximizing the joint surplus from the contract. The reality, of course, is that the majority of the provisions in contemporary commercial contracts are boilerplate terms derived from prior transactions and even the most sophisticated contracting parties pay little attention to these standard terms, focusing instead on the price of the transaction. With standard-form or boilerplate contracts, this dynamic of replicating by rote the terms …

The European Union Military: A Debate On The Need For A Common Defense Mechanism, Gonzalo Secaira

CMC Senior Theses

In a region affected by death and destruction brought on by two devastating world wars, the European Union has held peace and economic stability as its primary objective. Since its creation, the EU has expanded both in size and scope, becoming on the largest economic global actors in the world. In recent years, the EU has looked towards expanding its competencies to include common security and defense policies. Efforts on behalf of the EU to further integrate EU members have faced mixed reactions and opposition. One of these policies, the funding, and implementation of a European Union military has been …

A Mission Statement For Mutual Funds In Shareholder Litigation, Sean J. Griffith, Dorothy S. Lund

Faculty Scholarship

This Article analyzes the conduct of mutual funds in shareholder litigation. We begin by reviewing the basic forms of shareholder litigation and the benefits such claims might offer mutual fund investors. We then investigate, through an in-depth docket review, whether and how the ten largest mutual funds participate in shareholder litigation. We find that although shareholder suits offer potential benefits, the largest mutual funds have essentially forfeited their use of litigation. This finding is particularly striking given that index funds and other long-term oriented mutual funds generally cannot sell their shares when they are dissatisfied with company performance, leaving them …

Insulating A Wto Investment Facilitation Framework From Isds, George A. Bermann, N. Jansen Calamita, Manjiao Chi, Karl P. Sauvant

Faculty Scholarship

The authors identify several ways in which a WTO investment facilitation framework for development can be insulated from investor-state dispute settlement provisions in international investment agreements, and suggest specific formulations in this respect.

For Coöperation And The Abolition Of Capital, Or, How To Get Beyond Our Extractive Punitive Society And Achieve A Just Society, Bernard E. Harcourt

Faculty Scholarship

In hindsight, the term "capitalism" was always a misnomer, coined paradoxically by its critics in the nineteenth century. The term misleadingly suggests that the existence of capital produces a unique economic system or that capital itself is governed by economic laws. But that's an illusion. In truth, we do not live today in a system in which capital dictates our economic circumstances. Instead, we live under the tyranny of what I would call "tournament dirigisme": a type of state-directed gladiator sport where our political leaders bestow spoils on the wealthy, privileged elite.

We need to displace this tournament dirigisme with …

Environmental Injustice: How Treaties Undermine Human Rights Related To The Environment, Lisa E. Sachs, Lise Johnson, Ella Merrill

Columbia Center on Sustainable Investment Staff Publications

Growing cries for action to effectively address the climate and other environmental crises hold important implications for the governance of cross-border investments. Policymakers and environmental advocates have often overlooked how provisions granted by states in international investment agreements (IIAs) have been used by investors to challenge government measures taken in the public interest to protect the environment and advance environmental justice.

This 2019 paper, published in the Sciences Po Legal Review issue devoted to the climate crisis, explains how the investor-state dispute settlement (ISDS) mechanism, made available to investors in thousands of bilateral and multilateral trade and investment agreements, may …

Newman/Martoma: The Insider Trading Law's Impasse And The Promise Of Congressional Action, Tai H. Park

Fordham Journal of Corporate & Financial Law

The prohibition against insider trading is a judge-made law that has evolved for over fifty years, and has reached a critical impasse in two recent decisions in the Second Circuit Court of Appeals: United States v. Newman and United States v. Martoma. Judges of the Second Circuit are sharply divided over what conduct constitutes improper trading on material nonpublic information (“MNPI”), leaving the law in profound disarray. At bottom, the disagreement stems from a decades-old split within the judiciary about how to (1) ensure a fair securities marketplace, while (2) enabling institutional analysts to probe for corporate information in furtherance …

Multilateral Transparency For Security Markets Through Dlt, David C. Donald, Mahdi H. Miraz

Fordham Journal of Corporate & Financial Law

For decades, changing technology and policy choices have worked to fragment securities markets, rendering them so dark that neither ownership nor real-time price of securities are generally visible to all parties multilaterally. The policies in the U.S. National Market System and the EU Market in Financial Instruments Directive— together with universal adoption of the indirect holding system— have pushed Western securities markets into a corner from which escape to full transparency has seemed either impossible or prohibitively expensive. Although the reader has a right to skepticism given the exaggerated promises surrounding blockchain in recent years, we demonstrate in this paper …

Reconciling U.S. Banking And Securities Data Preservation Rules With European Mandatory Data Erasure Under Gdpr, Ronald V. Distante

Fordham Journal of Corporate & Financial Law

United States law, which requires financial institutions to retain customer data, conflicts with European Union law, which requires financial institutions to delete customer data on demand. A financial institution operating transnationally cannot comply with both U.S. and EU law. Financial institutions thus face the issue that they cannot possibly delete and retain the same data simultaneously. This Note will clarify the scope and nature of this conflict.

First, it will clarify the conflict by examining (1) the relevant laws, which are Europe’s General Data Protection Regulation (GDPR), the U.S. Bank Secrecy Act, and Securities and Exchange Commission (SEC) regulations, (2) …

The Layers Of Digital Financial Innovation: Charting A Regulatory Response, Teresa Rodriguez De Las Heras Ballell

Fordham Journal of Corporate & Financial Law

The increasing penetration of digital technologies in financial markets is evidenced by promising adoption rates among users, expanding presence of fintech firms and bigtech providing techfin services, and the growing use of fintech solutions by incumbents. The increasingly popular term "fintech" captures the accelerated transformation of contemporary financial markets driven and enabled by technology, and encapsulates its multifarious potential impact on services, market structures, and business models. This Article first aims to devise and propose an analytical framework to understand the digital challenges to financial regulation based on the "layers of digital financial innovation" theory. Accordingly, digital innovation (fintech) is …