Securities Law Commons^™

Obtaining And Enforcing A Security Interest In Local Currency Under Article 9 Of The Ucc, Marina C. Leary

Law Student Publications

Community currency is known by many names including complementary currency, alternative currency, and parallel currency. Community currency operates alongside an official or national currency (e.g., dollars or euros) with the purpose of circulating within a small geographic area to facilitate the sale of goods and services. In other words, community currency refers to a privatized form of currency that is not backed by a government entity. With the increased use of community currency, it has the potential to serve as collateral for a security interest under the Article 9 of the Uniform Commercial Code. Although there are several types of …

The Eu’S Struggles With Collective Action For Securities Fraud: An American Perspective, Dan Morrissey

Texas A&M Law Review

Notwithstanding the apparent exit of the United Kingdom, the European Union (“EU”) has grown in membership and power since its modest beginnings after World War II, now rivaling the U.S. in economic strength. With the goal of promoting the security and prosperity of all the citizens of the countries that belong to it, the EU is pressing ahead to adopt laws that will promote their political and financial integration. Along those lines, it has also recently acknowledged a deficiency in the legal systems of its member states when it comes to allowing collective actions for victims of various types of …

Global Settlements: Promise And Peril, John C. Coffee Jr.

Faculty Scholarship

In 2010, Morrison v. National Australia Bank Ltd. destabilized the world of securities litigation by denying those who purchased their securities outside the U.S. the ability to sue in the U.S. (as they had previously often done). Nature, however abhors a vacuum, and practitioners and other jurisdictions began to seek ways to regain access to U.S. courts. Several techniques have emerged: (1) expanding settlement classes so that they are broader than litigation classes and treating the location of the transaction as strictly a merits issue that defendants could waive; (2) adopting U.S. law as applicable to securities issued abroad by …

Activist Directors And Agency Costs: What Happens When An Activist Director Goes On The Board?, John C. Coffee Jr., Robert J. Jackson Jr., Joshua Mitts, Robert Bishop

Faculty Scholarship

We develop and apply a new and more rigorous methodology by which to measure and understand both insider trading and the agency costs of hedge fund activism. We use quantitative data to show a systematic relationship between the appointment of a hedge fund nominated director to a corporate board and an increase in informed trading in that corporation’s stock (with the relationship being most pronounced when the fund’s slate of directors includes a hedge fund employee). This finding is important from two different perspectives. First, from a governance perspective, activist hedge funds represent a new and potent force in corporate …

Judges And Judgment: In Praise Of Instigators, Kathryn Judge

Faculty Scholarship

This Essay is about mutual funds. Because of that, it may put many to sleep long before we get to the heart of the matter. I encourage you right now to stay awake, or at least keep one eye propped open. For embedded in this story about mutual funds, rent seeking, the challenge of separating the good and the bad, and the even greater challenge of respecting autonomy in an environment where so many choices seem to be bad ones, is the story of a judge. That judge is the Honorable Richard A. Posner, aka RAP, Dick, Professor Posner, the …

Reconstructing The Corporation: A Mutual-Control Model Of Corporate Governance, Grant M. Hayden, Matthew T. Bodie

All Faculty Scholarship

The consensus around shareholder primacy is crumbling. Investors, long assumed to be uncomplicated profit-maximizers, are looking for ways to express a wider range of values in allocating their funds. Workers are agitating for greater voice at their workplaces. And prominent legislators have recently proposed corporate law reforms that would put a sizable number of employee representatives on the boards of directors of large public companies. These rumblings of public discontent are echoed in recent corporate law scholarship, which has cataloged the costs of shareholder control, touted the advantages of nonvoting stock, and questioned whether activist holders of various stripes are …

The Corporation Reborn: From Shareholder Primacy To Shared Governance, Grant M. Hayden, Matthew T. Bodie

All Faculty Scholarship

The consensus around shareholder primacy is crumbling. Investors, long assumed to be uncomplicated profit-maximizers, are looking for ways to express a wider range of values in allocating their funds. Workers are agitating for greater voice at their workplaces. And prominent legislators have recently proposed corporate law reforms that would put a sizable number of employee representatives on the boards of directors of large public companies. These rumblings of public discontent are echoed in recent corporate law scholarship, which has cataloged the costs of shareholder control, touted the advantages of nonvoting stock, and questioned whether activist holders of various stripes are …

International Multiple Derivative Actions, King F. Tsang

Vanderbilt Journal of Transnational Law

This Article explores two choice of law issues in international multiple derivative actions: (1) the choice of substantive law that should govern multiple derivative actions and (2) the characterization of different aspects of the multiple derivative actions between substantive and procedural laws. After a comparison of choice of law approaches among various common law jurisdictions, the author advocates that the first choice of law issue--the substantive law to be applied to the action--should be governed by the law with the closest connections to the multiple derivative actions. This is the only practical choice given the complex nature of international multiple …

Transplanting Chapter 11 Of The Us Bankruptcy Code Into Singapore's Restructuring And Insolvency Laws: Opportunities And Challenges, Gerald Mccormack, Wai Yee Wan

Research Collection Yong Pung How School Of Law

In 2017, Singapore introduced wide-ranging reformsto its insolvency and restructuring laws with a view to enhancing itsattractiveness as an international centre for debt restructuring. Central tothese reforms is the transplantation (with modification) of certain provisionsfrom Chapter 11 of the US Bankruptcy Code including the automatic moratorium, cross-creditorcram-down, rescue financing and pre-packs. Drawing upon the US experience andsimilar reform proposals in the EU (including the UK), we critically evaluate theimpact of the new Singapore law. We argue that there remain challenges inensuring that the transplantation works well and highlight the possibleunintended consequences of such transplantation.

What's Wrong With Jumpstart(Ing) Our Business Startups (Jobs) Act?, Lynnise E. Pantin

Faculty Scholarship

Lack of access to financial capital is a barrier for many entrepreneurs who seek to grow their business venture. In an effort to democratize the entrepreneurial ecosystem, Congress and the Obama Administration enacted the JOBS Act, which implements and regulates crowdfunding. The democratic nature of the online crowdfunding platforms is a seemingly attractive solution to structural and institutionalized barriers to fundraising within the entrepreneurship ecosystem. Although the JOBS Act is a laudable step, the legislation does not in practice help entrepreneurs and herein lies one of its greatest shortcomings. The JOBS Act is unduly burdensome and is yet another barrier …

Securities Regulation, George Lee Flint Jr.

SMU Annual Texas Survey

No abstract provided.

Engineered Credit Default Swaps: Innovative Or Manipulative?, Gina-Gail S. Fletcher

Articles by Maurer Faculty

Credit default swaps (“CDS”) are, once again, making waves. Maligned for their role in the 2008 financial crisis and condemned by the Vatican, investors are once more utilizing CDS to achieve results of questionable market benefit. A CDS is a financial contract that allows investors to “bet” on whether a borrower will default on its loan. However, rather than waiting to see how their bets pan out, some CDS investors are collaborating with financially distressed borrowers to guarantee the profitability of their CDS positions—“engineering” the CDS’ outcome. Under the CDS contract, these collaborations are not prohibited, yet they have roiled …

Central Clearing Of Financial Contracts: Theory And Regulatory Implications, Steven L. Schwarcz

Faculty Scholarship

To protect economic stability, post-crisis regulation requires financial institutions to clear and settle most of their derivatives contracts through central counterparties, such as clearinghouses associated with securities exchanges. This Article asks whether regulators should expand the central clearing requirement to non-derivative financial contracts, such as loan agreements. The Article begins by theorizing how and why central clearing can reduce systemic risk. It then examines the theory’s regulatory and economic efficiency implications, first for current requirements to centrally clear derivatives contracts and thereafter for deciding whether to extend those requirements to non-derivative contracts. The inquiry has real practical importance because the …

Revolving Elites: The Unexplored Risk Of Capturing The Sec, James D. Cox, Randall S. Thomas

Faculty Scholarship

Fears have abounded for years that the sweet spot for capture of regulatory agencies is the "revolving door" whereby civil servants migrate from their roles as regulators to private industry. Recent scholarship on this topic has examined whether America's watchdog for securities markets, the Securities and Exchange Commission (SEC), is hobbled by the long-standing practices of its enforcement staff exiting their jobs at the Commission and migrating to lucrative private sector employment where they represent those they once regulated. The research to date has been inconclusive on whether staff revolving door practices have weakened the SEC' s verve. In this …

Engineered Credit Default Swaps: Innovative Or Manipulative?, Gina-Gail S. Fletcher

Faculty Scholarship

Credit default swaps (“CDS”) are, once again, making waves. Maligned for their role in the 2008 financial crisis and condemned by the Vatican, investors are once more utilizing CDS to achieve results of questionable market benefit. A CDS is a financial contract that allows investors to “bet” on whether a borrower will default on its loan. However, rather than waiting to see how their bets pan out, some CDS investors are collaborating with financially distressed borrowers to guarantee the profitability of their CDS positions—“engineering” the CDS’ outcome. Under the CDS contract, these collaborations are not prohibited, yet they have roiled …

The Conflicted Advice Problem: A Response To Conflicts & Capital Allocation, Gina-Gail S. Fletcher

Faculty Scholarship

No abstract provided.

Beyond The Numbers: Substantive Gender Diversity In Boardrooms, Yaron Nili

Faculty Scholarship

No abstract provided.

Arbitration Law Update: 2018-2019, Teresa J. Verges, Elissa Germaine

Faculty Publications

(Excerpt)

This article summarizes the leading federal and state arbitration cases during the last year that are of particular relevance to the securities arbitration practitioner. The Supreme Court decided three cases related to arbitration involving the “wholly groundless” exception, class arbitration, and arbitrability. Courts also addressed issues concerning arbitrability, vacating arbitration awards, a receiver action on behalf of defrauded investors, the limits of FINRA arbitration over member’s other business activities, and discovery in arbitration.

The Seller’S Curse And The Underwriter’S Pricing Pivot: A Behavioral Theory Of Ipo Pricing, Patrick M. Corrigan

Journal Articles

From the Article

Canonical theories of law and economics predict that issuing firms in initial public offerings (IPOs) demand — and that competitive markets produce — a transaction structure that maximizes value to issuers. Yet, since 1980, corporate America has left approximately 19 cents of foregone proceeds on the table for every dollar it has raised in IPOs. Moreover, the standard IPO contract appears designed to exacerbate rather than resolve agency costs, information asymmetries, and other foreseeable causes of IPO underpricing. This Article studies a new puzzle: why don’t issuers anticipate their transactional vulnerability and bargain for a sale of …

What We Talk About When We Talk About Shareholder Primacy, Ann Lipton

Publications

No abstract provided.