Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

A Member of the Law Professor Blogs Network

Sunday, October 21, 2007

Cunningham on Gatekeepers' Rewards

Beyond Liability: Rewarding Effective Gatekeepers, by LAWRENCE A. CUNNINGHAM, George Washington University Law School, was recently posted on SSRN.  Here is the abstract:

This Article adds to the emerging literature on rewards to promote effective capital market gatekeeping. Capital market gatekeeping theory traditionally relies heavily on threats of legal liability for failure to perform legally mandated functions (along with a presumed constraint imposed by reputation effects). The ineffectiveness of many gatekeepers in the past decade revealed limitations of the liability strategy and yet reforms continue to emphasize legal duties and liability for gatekeepers. This emphasis also has the negative side-effect of discouraging gatekeepers from willingness to perform desired functions - such as to detect for fraud. Using rewards can induce gatekeepers to perform desired functions and add positive incentives to encourage them to be more effective in vetting enterprises seeking access to capital.

http://lawprofessors.typepad.com/securities/2007/10/cunningham-on-g.html

Law Review Articles | Permalink

TrackBack URL for this entry:

http://www.typepad.com/services/trackback/6a00d8341bfae553ef00e54f0fb36b8834

Listed below are links to weblogs that reference Cunningham on Gatekeepers' Rewards:

Comments

Post a comment