Securities Law Commons^™

Small Investments, Big Losses: The States' Role In Protecting Local Investors From Securities Fraud, Carlos Berkejó

Washington Law Review

The securities regulation landscape has changed dramatically in recent years. Federal laws have increasingly preempted the regulatory power of states, while at the same time expanding the universe of securities offerings that are not subject to registration at the federal level. These political and policy choices reflect a balancing of two sometimes competing goals: protecting investors and facilitating capital formation. While policies centered on preemption and deregulation might reduce the cost of raising capital, these could also lead to more pervasive securities fraud. Any resulting increase in fraudulent practices is likely to disproportionately affect small securities offerings that are local …

Securities Regulation In Virtual Space, Eric C. Chaffee

Washington and Lee Law Review

No abstract provided.

No Smoke And No Fire: The Rise Of Internal Controls Absent Antibribery Violations In Fcpa Enforcement, Karen E. Woody

Cardozo Law Review

The Foreign Corrupt Practices Act (FCPA) prohibits bribery of foreign public officials in order to obtain or retain business. It is, for all intents and purposes, an anti-bribery statute. To detect bribery, the FCPA contains accounting provisions related to bookkeeping and internal controls. The books and records provision requires issuers to make and maintain accurate books, records, and accounts; likewise, the internal controls provision requires that issuers devise and maintain reasonable internal accounting controls aimed at preventing and detecting FCPA violations. If one considers the analogy that bribery is the 'fire" in FCPA enforcement actions, and books and records violations …

Getting Specific About The Policy And Tools Of Securities Regulation: A Limited Response To Diversifying To Mitigate Risk: Can Dodd–Frank Section 342 Help Stabilize The Financial Sector?, Joan Macleod Heminway

Washington and Lee Law Review Online

No abstract provided.

The Case For Federal Preemption Of State Blue Sky Laws, Rutheford B. Campbell Jr.

Law Faculty Popular Media

In our market economy, imposing rules on capital formation makes economic sense. Well-constructed rules regarding capital formation can promote the efficient flow of capital to its highest and best use and prevent or ameliorate fraud or unfairness to investors. These rules, however, generate additional offering costs that may retard or in some cases completely choke off the flow of capital from investors to businesses. The problem with state blue sky laws is their registration requirements, which significantly impede efficient capital formation and provide no material economic or societal benefits, such as protection of investors from fraud.

The Unsettled State Of Compelled Corporate Disclosure Regulation After The Conflict Mineral Rule Cases, Celia R. Taylor

Sturm College of Law: Faculty Scholarship

No abstract provided.

Sec In-House Tribunals: A Call For Reform, Drew Thornley, Justin Blount

Villanova Law Review (1956 - )

No abstract provided.

Are Disclosures Really Standardized? An Empirical Analysis, Uri Benoliel

Villanova Law Review (1956 - )

No abstract provided.

Lead Plaintiffs And Their Lawyers: Mission Accomplished, Or More To Be Done?, Adam C. Pritchard, Stephen Choi

Law & Economics Working Papers

This chapter, written for the Research Handbook on Shareholder Litigation, surveys empirical work studying the lead plaintiff provision of the Private Securities Litigation Reform Act (PSLRA). That work finds that the lead plaintiff provision has encouraged institutional investors to participate in securities class actions and that those institutional investors have negotiated lower attorneys' fees. Those benefits from the lead plaintiff provision are undercut, however, by political contributions made by plaintiffs' lawyers. We suggest additional reforms to promote transparency and competition among lawyers for lead plaintiffs. We also suggest reforms to the lead plaintiff provision intended to enhance the screening effect …

Statutory Interpretation Lessons Courtesy Of Pilgrim’S Pride, Philip G. Cohen

University of Miami Business Law Review

In Pilgrim’s Pride Corp. v. Commissioner, the Fifth Circuit reversed the Tax Court and held that the taxpayer was entitled to an ordinary loss deduction from its abandonment of securities. While the conclusion reached by the Fifth Circuit has been overshadowed by the promulgation of Treasury Regulation section 1.165-5(i) that effectively treats an abandoned security as worthless and thus characterizes the loss as capital, the case remains noteworthy because it provides an opportunity to examine the statutory interpretation of two distinct Internal Revenue Code sections, section 165(g)(1) and section 1234A. The article focuses on what methods of statutory construction …

What Happens In Delaware Need Not Stay In Delaware: How Trulia Can Strengthen Private Enforcement Of The Federal Securities Laws, Ryan Lewis

BYU Law Review

Class-action lawsuits have been used by private plaintiffs to enforce the federal securities laws since those laws were enacted in the 1930s. With the SEC retaining concurrent authority to enforce federal securities laws, a debate has emerged as to whether the private right of action helps or hinders public enforcement. The primary criticism of private securities litigation is that rent-seeking attorneys abuse the system by bringing frivolous litigation aimed at achieving a settlement and a fee. In the public merger context, the potentially disastrous consequences of failing to close an announced deal on time make corporations eager to settle potentially …

Much Ado About Nothing: The Limits Of Liability For Item 303 Omissions And The Circuit Split That Never Was, Brian Currie

William & Mary Business Law Review

The implied private action for violations of SEC Rule 10b-5 has a contentious history. When plaintiffs base such actions on representations of forward-looking information, however, the stakes are even higher. Recently, the federal circuit courts revisited this divisive issue while deciding whether an omission from required disclosure of Management’s Discussion and Analysis (MD&A) of financial conditions and results of operations. The apparent disparity between the federal circuit courts has caused great consternation and uncertainty in the corporate legal sphere.

This Note will examine the origins and controversial history of Rule 10b-5 private actions, discuss the treatment of MD&A omissions throughout …

Med-Arb Adoption In Securities Law Disputes: Advantages And Costs, Hyung Kyun Kwon

Concordia Law Review

This Article considers the adoption of a hybrid method of Alternative Dispute Resolution (ADR)—Med-Arb—in securities law disputes. Because securities law ADR is currently monopolized by claims that proceed through arbitration, this Article argues that the benefits of settling a claim through mediation are being lost. Med-Arb allows parties to access the benefits of both mediation and arbitration with potentially lower economic costs and the assurance of finality of the dispute. This Article therefore presents how best to use Med-Arb to successfully resolve securities law disputes.

Corporate Purpose And Litigation Risk In Publicly Held U.S. Benefit Corporations, Joan Macleod Heminway

Seattle University Law Review

With the likely prospect of publicly held U.S. benefit corporations in mind, this Article engages in a thought experiment. Specifically, the Article views the publicly held U.S. benefit corporation from the perspective of litigation risk. It first situates, in Part I, the U.S. benefit corporation in its structural and governance context as an incorporated business association. Corporate purpose and the attendant managerial authority, responsibilities, and fiduciary duties are the key points of reference. Then, in Part II, the Article seeks to identify and describe the salient, unique litigation risks that may be associated with publicly held corporations with the structural …

A Critical Canadian Perspective On The Benefit Corporation, Carol Liao

Seattle University Law Review

Part I of this Article provides a brief background and description of the American benefit corporation. Part II then delineates the Canadian model of corporate law and governance as it currently stands in the statutes, common law, and in practice. Part III applies the information gathered from the previous two sections to explain why the legal features in the American benefit corporation model are largely redundant to existing Canadian corporate laws. It also addresses how the implementation of the benefit corporation in Canada would conflate incorrect assumptions on Canada’s model of governance and potentially impede the progressive development of Canada’s …

Intermediate Scrutiny For Corporate Political Contributions, Joseph K. Leahy

Florida State University Law Review

A corporation contributes to a Super PAC that supports a candidate for public office. A shareholder sues, alleging that management breached its duty of loyalty by making the contribution to promote its own political views rather than to serve the corporation’s best interests—i.e., by acting in bad faith. What standard will a Delaware court apply when reviewing management’s decision to cause the corporation to make the contribution?

Myriad scholars have opined that the court will apply the standard of review for ordinary business decisions: the management-friendly business judgment rule. Unfortunately for our shareholder plaintiff, this rule presumes that management acts …

The Impact Of Recent Sec Financial Reporting Probes On Shareholder Wealth: Companies, Competitors, And Consequences, Stephen Warde

Honors Projects in Finance

During an undergraduate college career, an accounting major devotes a great part of his or her time to learning how publicly traded businesses prepare financial statements in compliance with Generally Accepted Accounting Principles (GAAP) and federal securities laws. These accounting principles, standards, and procedures are ultimately enforced by the U.S. Securities and Exchange Commission (SEC) to protect investors, uphold fair markets, and promote public trust in the capital market system. To fulfill its mission, the SEC Division of Enforcement conducts investigations into possible violations of the federal securities laws and administers enforcement actions. Naturally, SEC investigations and the anticipation of …

Finance And Growth: The Legal And Regulatory Implications Of The Role Of The Public Equity Market In The United States, Ezra Wasserman Mitchell

Michigan Business & Entrepreneurial Law Review

The important study of the relationship between finance and economic growth has exploded over the past two decades. One of the most significant open questions is the role of the public equity market in stimulating growth and the channels it follows if it does. This paper examines that question from an economic, legal, and historical perspective, especially with regard to its regulatory and corporate governance implications. The US market is my focus.

In contrast to most studies, I follow both economic history and the actual flow of funds in addition to empirics and theory to conclude that the public equity …

Implementing High Frequency Trading Regulation: A Critical Analysis Of Current Reforms, Michael Morelli

Michigan Business & Entrepreneurial Law Review

Technological developments in securities markets, most notably high frequency trading, have fundamentally changed the structure and nature of trading over the past fifty years. Policymakers, both domestically and abroad, now face many new challenges influencing the secondary market’s effectiveness as a generator of economic growth and stability. Faced with these rapid structural changes, many are quick to denounce high frequency trading as opportunistic and parasitic. This article, however, instead argues that while high frequency trading presents certain general risks to secondary market efficiency, liquidity, stability, and integrity, the practice encompasses a wide variety of strategies, many of which can enhance, …

Dictation And Delegation In Securities Regulation, Usha Rodrigues

Indiana Law Journal

When Congress undertakes major financial reform, either it dictates the precise con-tours of the law itself or it delegates the bulk of the rule making to an administrative agency. This choice has critical consequences. Making the law self-executing in federal legislation is swift, not subject to administrative tinkering, and less vulnerable than rule making to judicial second-guessing. Agency action is, in contrast, deliberate, subject to ongoing bureaucratic fiddling, and more vulnerable than statutes to judicial challenge.

This Article offers the first empirical analysis of the extent of congressional delegation in securities law from 1970 to the present day, examining nine …