Securities Law Commons^™

Manufactured Consent: The Problem Of Arbitration Clauses In Corporate Charters And Bylaws, Ann Lipton

Publications

No abstract provided.

Inclusive Crowdfunding, Andrew A. Schwartz

Publications

Securities “crowdfunding” — the sale of unregistered securities over the internet to large numbers of investors, each of whom contributes only a small amount — is a new concept that comes in at least three types: (1) retail crowdfunding under Title III of the federal JOBS Act of 2012; (2) accredited crowdfunding under Title II of the JOBS Act, which is legally restricted to accredited investors; and (3) intrastate crowdfunding under state law. Which of these three types — all at the dawn of their existence — holds the most promise?

Without claiming to finally resolve the issue, this Article …

Disclosure 2.0: Can Technology Solve Overload, Complexity, And Other Information Failures?, Erik F. Gerding

Publications

In recent years, securities law scholars have either renewed an old attack on mandatory issuer disclosure or questioned the effectiveness of securities disclosure in the context of modern financial instruments. Some scholars argue that mandatory disclosure rules prove ineffective because investors suffer from “information overload.” Others claim that securities disclosure cannot describe adequately the complexity of modern firms and finance. These academic criticisms of mandatory securities disclosure provide some of the intellectual underpinnings for recent efforts to roll back some mandatory securities disclosure rules, such as the SEC’s Disclosure Effectiveness initiative.

This Article questions these critiques of securities disclosure, including …

From The Regulatory Abyss: The Weakened Gatekeeping Incentives Under The Uniform Securities Act, Marc I. Steinberg, James Ames

Faculty Journal Articles and Book Chapters

In the last two decades, massive financial scandals have impaired the integrity of the financial markets and cost investors billions of dollars. Even more financial devastation was wrought as the great recession struck. These calamities have brought the importance of proper regulatory control in the securities markets into sharp focus. With this backdrop, this Article tackles the task of examining regulation of one of the most integral components of an effective regulatory system for securities: gatekeepers.

Gatekeepers, such as accountants, attorneys, bankers, and other professionals involved in the securities disclosure process are uniquely positioned to provide much needed oversight with …

Unsponsored Adrs Falling Through The Cracks: Adapting A Domestic Securities Regime To A Global Marketplace, Sarah Dotzel

Vanderbilt Journal of Entertainment & Technology Law

Investing in the securities market has become a commonplace activity for expert and amateur investors alike. As more and more companies transcend national boundaries with their business activities, investment in their securities becomes coveted by international investors. Since securities are regulated on a country-by-country basis, it is unclear which law applies when conflict arises. In an attempt to clarify one such situation, simplify the application of US securities laws, and respect the legal regimes of other nations, the Morrison decision created an unclear test which leaves investors in unsponsored American Depositary Receipts (ADRs), one of the most common international trading …

The Sec's Regulation A+: Small Business Goes Under The Bus Again, Rutheford B. Campbell Jr.

Kentucky Law Journal

Title IV of the JOBS Act, which is entitled "Small Company Capital Formation," requires the Securities and Exchange Commission to adopt new rules regarding offerings under Regulation A. The Commission has now adopted its final regulations implementing Title IV and providing a new regulatory regime for exempt offerings under Section 3(b) of the Securities Act of 1933. The new regime is generally referred to as Regulation A+.

Unfortunately, history and empirical data regarding the use of Regulation A and Regulation D strongly suggest that the final Regulation A+ rules are unlikely to provide any material relief for small businesses in …

Patent System Manipulation: Hedge Funds Abusing Ipr, Poor Patent Quality & Pharmaceutical Monopolies, Kenneth J. Costa

Cardozo Arts & Entertainment Law Journal

No abstract provided.

Food Speculation: Between Virtual . . . And Reality, Alexandra Esmel

American University International Law Review

No abstract provided.

Salman V. United States: Insider Trading's Tipping Point?, Donna M. Nagy

Articles by Maurer Faculty

No abstract provided.

Beyond Dirks: Gratuitous Tipping And Insider Trading, Donna M. Nagy

Articles by Maurer Faculty

Did an investment banker who gratuitously shared material nonpublic information with his brother, with no expectation of receiving anything in return, commit securities fraud? And is the investment banker's brother-in-law jointly liable for trading securities on the basis of what he knew to be gratuitous tips? The Supreme Court is poised to answer those questions in Salman v. United States, after steering clear of insider trading law for nearly two decades. It has been even longer still since the Court last addressed securities fraud liability relating to stock trading tips-it articulated a "personal benefit" test for joint tipper-tippee liability in …

How Cheap Is Corporate Talk? Comparing Companies' Comments On Regulations With Their Securities Disclosures, James W. Coleman

Faculty Journal Articles and Book Chapters

When companies face adverse proposed rules, they may want to convince regulators that the proposed rules are unworkable and should be changed while, at the same time, reassuring investors that the rules will be manageable. These conflicting incentives may lead to inconsistent messages in regulatory comments and securities disclosures, fueling a perception that corporate submissions to regulators are cheap talk. Despite this perception, there has been no empirical study comparing statements to these two audiences. This project performs such a study, taking the example of comments submitted on the Environmental Protection Agency's Renewable Fuel Standard. This standard provides an ideal …

When May A Litigant Rely In Its Own Complaint On Allegations From Another Complaint? – Lipsky V. Commonwealth United Corp. And Its Progeny – Still An Unresolved Question, Laurence A. Steckman, Joseph T. Johnson

Touro Law Review

No abstract provided.

Pricing Sovereign Debt: Discretion V. Expropriation, Michael Bradley, Irving De Lira Salvatierra, Mitu Gulati

Faculty Scholarship

The Greek restructuring of March 2012 illustrates how non-price contract terms can have a significant effect on the pricing of sovereign debt. In the Greek restructuring, bonds governed by local law suffered NPV haircuts in the range of 60-75%, whereas those bonds governed by foreign law were paid in full and on time. Other contract parameters such as the currency in which the debt is denominated and the exchange on which it is listed can also affect the leeway a sovereign debtor has in dealing with its creditors. In general, we find that sovereigns with strong institutions and investor protections …

Macroprudential Regulation Of Mortgage Lending, Steven L. Schwarcz

Faculty Scholarship

Much regulatory effort has been devoted to improving mortgage lending, the principal source of housing finance. To date, that effort has primarily been microprudential—intended to correct market failures in order to increase economic efficiency. In contrast, and while there is some overlap, this article focuses on a more “macroprudential” regulation of mortgage lending—intended to reduce systemic risk. Although largely underdeveloped in the literature, the macroprudential regulation of mortgage lending would have two goals: an ex ante goal of preventing systemic shocks in housing finance and the housing sector, and an ex post goal of ensuring that housing finance, the housing …

Perspectives On Regulating Systemic Risk, Steven L. Schwarcz

Faculty Scholarship

This book chapter, which synthesizes several of the author’s articles, attempts to provide useful perspectives on regulating systemic risk. First, it argues that systemic shocks are inevitable. Accordingly, regulation should be designed not only to try to reduce those shocks but also to protect the financial system against their unavoidable impact. This could be done, the chapter explains, by applying chaos theory to help stabilize the financial system. The chapter then focuses on trying to prevent excessive corporate risk-taking, which is one of the leading triggers of systemic shocks and widely regarded to have been a principal cause of the …

Talking One's Way Out Of A Debt Crisis, Lee C. Buchheit, G. Mitu Gulati

Faculty Scholarship

The policy of Euro-area officialdom in the period 2010-2011 was to avoid, at all costs, a default and restructuring of the sovereign debt of a member of the monetary union. This policy was motivated principally, but not exclusively, by a fear that the international capital markets, if forcibly reminded of the precarious position of overindebted, growth-challenged members of a monetary union, might recoil generally from lending to European sovereigns. In short, they feared contagion.

The only alternative to permitting a debt restructuring, of course, was an official sector bailout. The afflicted countries -- Greece (until 2012), Portugal, Ireland and Cyprus …

Fiduciary Contours: Perspectives On Mutual Funds And Private Funds, Deborah A. Demott

Faculty Scholarship

The thesis of this essay, written as a chapter in a forthcoming book, is that in the mutual fund context, the specifics of fiduciary duty reflect the distinctive qualities of this form of investment in securities. The particular contours that shape fiduciary duty reflect many factors, including the highly prescriptive regulatory context distinctively applicable to mutual funds. To sharpen its depiction of the fiduciary distinctiveness of mutual funds, I draw contrasts with two other avenues through which an investor may delegate investment choice: (1) "private" funds, that is, vehicles for pooled investments that are not subject to the full regulatory …

The Pricing Of Non-Price Terms In Sovereign Bonds: The Case Of The Greek Guarantees, Stephen J. Choi, Mitu Gulati

Faculty Scholarship

In March 2012, Greece conducted one of the biggest and most brutal sovereign debt restructurings ever, asking holders of Greek government bonds to take net present value haircuts of near 80 percent. Greece forced acquiescence to its terms from a large number of its bonds by using a variety of legal strong-arm tactics. With the vast majority of Greek bonds, the tactics worked. There were, however, thirty-six bonds guaranteed by the Greek state, which, because of the weakness of the underlying companies, were effectively obligations of the Greek state. Yet, on these thirty six bonds, even though Greece desperately needed …

The Sovereign-Debt Listing Puzzle, Elisabeth De Fontenay, Josefin Meyer, Mitu Gulati

Faculty Scholarship

The claim that stock exchanges perform certification and monitoring roles in securities offerings is pervasive in the legal and financial literatures. This article tests the validity of this “bonding hypothesis” in the sovereign-bond market—one of the oldest and largest securities markets in the world. Using data on sovereign-bond listings for the entire post-World War II period, we provide the first comprehensive report on sovereigns’ historical listing patterns. We then test whether a sovereign bond issue’s listing jurisdiction affects its yield at issuance, as the bonding hypothesis would predict. We find little evidence of bonding in today’s sovereign-debt market. Instead, we …

Shadow Banking And Regulation In China And Other Developing Countries, Steven L. Schwarcz

Faculty Scholarship

The rapid but largely unregulated growth in shadow banking in developing countries such as China can jeopardize financial stability. This article discusses that growth and argues that a regulatory balance is needed to help protect financial stability while preserving shadow banking as an important channel of alternative funding. The article also analyzes how that regulation could be designed.