Securities Law Prof Blog

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

Thursday, April 26, 2018

New Securities Law Articles in Print

The following law review article relating to securities regulation is now available in paper format:

Shawn Grant, Caution, Curves Ahead: Does the Future Signal Changes for Whistleblowers?, 42 Seton Hall Legis. J. 1 (2017).

Joseph D. Heinz, Comment, Spoofing: Ineffective Regulation Increases Market Inefficiency, 67 DePaul L. Rev. 77 (2017).

Andrew P. Van Osselaer, Note, Insider Trading Enforcement & Link Prediction, 96 Tex. L. Rev. 399 (2017).

April 26, 2018 | Permalink | Comments (0)

Thursday, April 19, 2018

Winship on Insider Trading

 Verity Winship has posted Disgorgement in Insider Trading Cases: FY2005-FY2015 on SSRN with the following abstract:

For about 50 years – at least since Texas Gulf Sulphur – the SEC has ordered defendants to disgorge their profits from transactions that violated the securities laws. Despite disgorgement’s long history, in its 2017 opinion in Kokesh v. SEC, the US Supreme Court put two aspects of the remedy on the table. It applied a five-year statute of limitations to disgorgement. It also reopened old questions about agencies’ power to seek remedies not specified in statute. This article provides data to inform these debates over the agency’s use of disgorgement and the effects of Kokesh. It reports the results of an empirical study of ten years of the remedies ordered by the SEC in insider trading actions, with particular emphasis on the agency’s reliance on disgorgement. It finds widespread reliance on disgorgement, but also identifies aspects of its use that may limit Kokesh’s effects in this area.

April 19, 2018 | Permalink | Comments (0)

New Securities Law Article in Print

The following law review article relating to securities regulation is now available in paper format:

Jayme Herschkopf, Morality and Securities Fraud, 101 Marq. L. Rev. 453 (2017).

April 19, 2018 | Permalink | Comments (0)

Monday, April 9, 2018

New Securities Law Articles in Print

The following law review articles relating to securities regulation are now available in paper format:

Jill E. Fisch, Jonah B. Gelbach & Jonathan Klick, The Logic and Limits of Event Studies in Securities Fraud Litigation, 96 Tex. L. Rev. 553 (2018).

Andrew Verstein, Insider Tainting: Strategic Tipping of Material Nonpublic Information, 112 Nw. U. L. Rev. 725 (2018).


April 9, 2018 | Permalink | Comments (0)

Friday, April 6, 2018

New Securities Law Articles in Print

The following law review articles relating to securities regulation are now available in paper format:

Court E. Golumbic, "The Big Chill": Personal Liability and the Targeting of Financial Sector Compliance Officers, 69 Hastings L.J. 45 (2017).

Michael Stephen Hayes, Case comment, Securities Law--Tenth Circuit Holds that the SEC Unconstitutionally Appoints Its Administrative Law Judges--Bandimere v. SEC, 844 F.3d 1168 (10th Cir. 2016), 50 Suffolk U.L. Rev. 761 (2017).

April 6, 2018 | Permalink | Comments (0)

Sunday, April 1, 2018

New Securities Law Articles in Print

The following law review articles relating to securities regulation are now available in paper format:

Benjamin Joon-Buhm Lee, Comment, Saving the Korean Securities Class Action, 39 U. Pa. J. Int'l L. 247 (2017).

Brian Kingsley Krumm, Fostering Innovation and Entrepreneurship: Shark Tank Shouldn't be the Model, 70 Ark. L. Rev. 553 (2017).

Yaron Nili, Out of Sight, Out of Mind: The Case for Improving Director Independence Disclosure, 43 J. Corp. L. 35 (2017).

Casey M. Olesen, Case note, Creating Mischief: The Tenth Circuit Declares the SEC's Administrative Law Judges Unconstitutional in Bandimere v. Securities Exchange Commission, 70 Me. L. Rev. 137 (2017).

Amanda M. Rose, The "Reasonable Investor" of Federal Securities Law: Insights from Tort Law's "Reasonable Person" & Suggested Reforms, 43 J. Corp. L. 77 (2017).

Kurt S. Schulzke & Gerlinde Berger-Walliser, Toward a Unified Theory of Materiality in Securities Law, 56 Colum. J. Transnat'l L. 6-70 (2017).

Megan Woodward, Note, The Need for Speed: Regulatory Approaches to High Frequency Trading in the United States and the European Union, 50 Vand. J. Transnat'l L. 1359 (2017).

April 1, 2018 | Permalink | Comments (0)

Friday, March 23, 2018

Sharfman on Dual Class Shares

I have been catching up on some online reading.  Bernard S. Sharfman has a great post on SEC Commissioner Robert Jackson and Perpetual Dual Class Shares over at the Oxford Business Law Blog.  It is well worth a read.

March 23, 2018 | Permalink | Comments (0)

Wednesday, March 21, 2018

Shaw on Whistleblowing

Todd W. Shaw has posted When Text and Policy Conflict: Internal Whistleblowing Under the Shadow of Dodd-Frank on SSRN with the following abstract:

This Article considers whether the text of the Dodd-Frank Act protects internal whistleblowers from retaliation, and if not, whether it should. After the economic meltdown following the 2008 financial crisis, Congress extended protections to corporate whistleblowers by enacting Dodd-Frank. Since then, numerous lower federal courts have disagreed over whether Dodd-Frank’s whistleblower protections apply to employees who report their employer’s securities violations internally, but not to the Securities and Exchange Commission (SEC). In Digital Realty Trust, Inc. v. Somers, the Supreme Court resolved this division of authority by holding that Dodd-Frank’s whistleblower protections only apply to employees who report their employer’s securities violations to the SEC.

After discussing current statutory and case law, this Article makes two claims. First, it argues that the Court’s decision in Digital Realty is correct as a matter of statutory interpretation. While those who may disagree with the Court’s holding have advanced strong policy arguments to support their position, such arguments cannot trump the unambiguous meaning of Dodd-Frank’s text. That meaning confirms that Dodd-Frank’s whistleblower protections do not apply to internal whistleblowers. And even if Dodd-Frank’s text initially appears ambiguous, its legislative history resolves this ambiguity by confirming that only whistleblowers who report misconduct to the SEC are protected.

Nevertheless, this Article further argues that Congress should amend Dodd-Frank to protect from retaliation employees who only report their employer’s securities violations internally. The novel and easily-adoptable amendment that this Article proposes has the potential to reduce the vulnerability of certain classes of employees to employer retaliation, incentivize employees to make internal disclosures of securities violations, and reduce the costs of investigations by channeling them internally. Most importantly, the proposed amendment would align Dodd-Frank with the doctrinal foundation of whistleblower programs in the United States, which is the idea that regulatory compliance requires robust external and internal whistleblower protections.

March 21, 2018 | Permalink | Comments (0)

New Securities Law Articles in Print

The following law review articles relating to securities regulation are now available in paper format:

Heather Hughes, Property and the True-Sale Doctrine, 19 U. Pa. J. Bus. L. 870 (2017).

Alec Smith, Note, Advisers, Brokers, and Online Platforms: How a Uniform Fiduciary Duty Will Better Serve Investors, 2017 Colum. Bus. L. Rev. 1200.

March 21, 2018 | Permalink | Comments (0)

Thursday, March 8, 2018

New Securities Law Articles in Print

The following law review articles relating to securities regulation are now available in paper format:

Eric C. Chaffee, Securities Regulation in Virtual Space, 74 Wash. & Lee L. Rev. 1387 (2017).

Ronnie Cohen & Gabriele Lingenfelter, Money Isn't Everything: Why Public Benefit Corporations Should Be Required to Disclose Non-Financial Information, 42 Del. J. Corp. L. 115 (2017).

Jill E. Fisch, Standing Voting Instructions: Empowering the Excluded Retail Investor, 102 Minn. L. Rev. 11 (2017).

David F. Freeman Jr., U.S. Financial Regulation of Sovereign Wealth Funds, 52 Wake Forest L. Rev. 781 (2017).

Enrico Ginevra & Chiara Presciani, Sovereign Wealth Fund Transparency and the European Rules on Institutional Investor Disclosure, 52 Wake Forest L. Rev. 815 (2017).

Anita K. Krug, The Other Securities Regulator: A Case Study in Regulatory Damage, 92 Tul. L. Rev. 339 (2017).

John Lightbourne, Note, Algorithms & Fiduciaries: Existing and Proposed Regulatory Approaches to Artificially Intelligent Financial Planners, 67 Duke L.J. 651 (2017).

Kendall R. Pauley, Comment, Why Salman Is a Game-Changer for the Political Intelligence Industry, 67 Am. U. L. Rev. 603 (2017).

Lesesne Phillips, Note, If It Quacks Like a Duck: The Financial Industry Regulatory Authority and Federal Jurisdiction, 74 Wash. & Lee L. Rev. 1695 (2017).

David Rosenfeld, Admissions in SEC Enforcement Cases: The Revolution That Wasn't, 103 Iowa L. Rev. 113 (2017).

What Happens in the Dark: An Exploration of Dark Pools and High Frequency Trading, Articles by Jonathan Macey, David Swensen, Merritt B. Fox, Gabriel Rauterberg, Kevin S. Haeberle & Kristin N. Johnson, 42 J. Corp. L. 777-915 (2017).

March 8, 2018 | Permalink | Comments (0)

Monday, February 5, 2018

New Securities Law Articles in Print

The following law review articles relating to securities regulation are now available in paper format:

Evan J. Ballan, Note, Protecting Whistleblowing (And Not Just Whistleblowers), 116 Mich. L. Rev. 475 (2017).

Stephen J. Choi, Jessica Erickson & A.C. Pritchard, Piling On? An Empirical Study of Parallel Derivative Suits, 14 J. Empirical Legal Stud. 652 (2017).

Kenneth R. Davis, The Equality Principle: How Title VII Can Save Insider Trading Law, 39 Cardozo L. Rev. 199 (2017).

Michael D. Guttentag, Selective Disclosure and Insider Trading, 69 Fla. L. Rev. 519 (2017).

Gregg Moran, Comment, The SEC's Data Dilemma: Addressing a Modern Problem by Encouraging Innovation, Responsibility, and Fairness, 96 Neb. L. Rev. 446 (2017).

February 5, 2018 | Permalink | Comments (0)

Monday, January 22, 2018

New Securities Law Articles in Print

The following law review articles relating to securities regulation are now available in paper format:

John C. Coffee Jr., The Globalization of Entrepreneurial Litigation: Law, Culture, and Incentives, 165 U. Pa. L. Rev. 1895 (2017).

Emiliano Giudici & Justin Blount, Evaluating Market Reactions to Non-Practicing Entity Litigation, 20 Vand. J. Ent. & Tech. L. 51 (2017).

Brian Knight, Federalism and Federalization on the Fintech Frontier, 20 Vand. J. Ent. & Tech. L. 129 (2017).

January 22, 2018 | Permalink | Comments (0)

Turk on Securitization

Matthew C. Turk has posted Securitization Reform After the Crisis: Regulation by Rulemaking or Regulation by Settlement? on SSRN with the following abstract:

This article examines the regulatory framework for securitization that has been developed in response to the financial crisis which took place one decade ago. Its thesis is that, for practical purposes, little of that reform has been imposed by the statutory rulemaking process established under the Dodd-Frank Act. Instead, the bulk of actual policymaking has occurred much more informally, through enforcement actions against large financial institutions that have resulted in a series of multi-billion dollar settlements. By pursuing a strategy of “regulation by settlement,” regulators have implicitly promulgated a novel legal prohibition on misconduct in securitization markets, roughly equivalent to a negligence standard.

The revisionist account presented in this article raises three further questions: Why did the Dodd-Frank regulations prove so ineffectual? Can regulation by settlement be justified as an adequate substitute for shortcomings in the conventional rulemaking process? And, what lies ahead for the future of securitization regulation? The suggested answers are as follows. First, that the Dodd-Frank Act missed the mark because it was premised on a flawed theory of the role that securitization played the crisis, which emphasized traditional notions of fraud rather than poor risk-management. Second, despite the heavy criticism that has been levied against federal enforcement practices following the crisis, it will be argued that when the entire set of agency-bank settlements are considered as a whole, they can been seen as imposing a Pigouvian tax on the specific market externality associated with securitization, and therefore come surprisingly close to a first-best policy intervention. Third, the rollback of Dodd-Frank that is currently being contemplated within Congress and the Trump administration will further marginalize the post-crisis rulemakings and reinforce the centrality of regulation by settlement in the securitization area. The broader picture of securitization which emerges from this article’s analysis is that of a policy space which remains poorly understood and is still in flux.

January 22, 2018 | Permalink | Comments (0)

Saturday, December 30, 2017

New Securities Law Articles in Print

The following law review articles relating to securities regulation are now available in paper format:

Jeffrey M. Colon, The Great ETF Tax Swindle: The Taxation of In-Kind Redemptions, 122 Penn St. L. Rev. 1 (2017).

Lucille Gauthier, Comment, Insider Trading: The Problem with the SEC's In-House ALJs, 67 Emory L.J. 123 (2017).

Frank Partnoy, What's (Still) Wrong with Credit Ratings?, 92 Wash. L. Rev. 1407 (2017).

December 30, 2017 | Permalink | Comments (0)

Tuesday, December 19, 2017

New Securities Law Articles in Print

The following law review articles relating to securities regulation are now available in paper format:

Mark Hayden Adams, Note, Insider Trading Law That Works: Using Newman and Salman to Update Dirks's Personal Benefit Standard, 49 Loy. L. Rev. 575 (2016).

M. Dalton Downing, Note, Picket Signs Versus Pocket Books: Using U.S. Securities Law to Compel Corporate Lobbying Disclosure, 53 Tulsa L. Rev. 85 (2017).

Wulf A. Kaal, Dynamic Regulation Via Contingent Capital, 36 Rev. Banking & Fin. L. 767 (2016-2017).

Wulf A. Kaal, Private Fund Investor Due Diligence: Evidence from 1995 to 2015, 36 Rev. Banking & Fin. L. 257 (2016-2017).

Wulf A. Kaal & Bentley J. Anderson, Unconstrained Mutual Funds and Retail Investor Protection, 36 Rev. Banking & Fin. L. 817 (2016-2017).

Jillian Loh, Comment, Could the Pay Ratio Disclosure Backfire? Examining the Effects of the SEC's Pay Ratio Disclosure Rule, 4 Tex. A&M L. Rev 417 (2017).

Michael D. Moritz, The Advent of Scienterless Fraud? Applying Omincare to Section 10(b) and Rule 10b-5 Claims, 13 N.Y.U. J.L. & Bus. 595-631 (2017).

Zachary L. Pechter, Note, The Case for a Uniform Definition of a Leveraged Loan, 43 Fla. St. U. L. Rev. 1409 (2016).

Edward L. Pittman, Quantitative Investment Models, Errors, and the Federal Securities Laws, 13 N.Y.U. J.L. & Bus. 633-773 (2017).

Kevin J. Smith, The Foreign Corrupt Practices Act: Set Aside The Moral and Ethical Debates, How Does One Operate Within This Law?, 45 Hofstra L. Rev. 1119 (2017).

Micah Smith, Note, A Privatized Approach to Derivatives Regulation: The CPMI-IOSCO's Proposed Unique Transaction Identifier Scheme and Its Practical Effects on Transparency and Regulatory Arbitrage, 45 Ga. J. Int'l & Comp. L. 411 (2017).

December 19, 2017 | Permalink | Comments (0)

Tuesday, December 5, 2017

New Securities Law Articles in Print

The following law review articles relating to securities regulation are now available in paper format:

Gina-Gail S. Fletcher, Benchmark Regulation, 102 Iowa L. Rev. 1929 (2017).

Alison Giest, Comment, Interpreting Public Interest Provisions in International Investment Treaties, 18 Chi. J. Int'l L. 321 (2017).

Cassandra Jones Havard, Too Conflicted to Be Transparent: Giving Affordable Financing Its "Good Name" Back, 20 N.Y.U. J. Legis. & Pub. Pol'y 451 (2017).

Brianna S. Hills, Note, Never Settle for Second Best? Cy Pres Distributions in Securities Class Action Settlements, 82 Mo. L. Rev. 507 (2017).

Ann M. Lipton, Reviving Reliance, 86 Fordham L. Rev. 91 (2017).

Andrew N. Vollmer, A Rule of Construction for the Personal Benefit Requirement in Tipping Cases, 11 N.Y.U. J.L. & Liberty 331 (2017).

December 5, 2017 | Permalink | Comments (0)

Saturday, November 4, 2017

Anderson on Insider Trading

John P. Anderson has posted Poetic Expansions of Insider Trading Liability on SSRN with the following abstract:

Professors Michael Guttentag and Donna Nagy have each offered arguments suggesting that the entire tipper-tippee framework first laid out by the Supreme Court in Dirks, including the personal benefit test, has been rendered obsolete by subsequent common law and regulatory developments that have fundamentally transformed the U.S. insider trading enforcement regime. These developments include: (1) the Supreme Court’s endorsement of the misappropriation theory in United States v. O’Hagan, (2) recent state court decisions offering more expansive accounts of what conduct constitutes a breach of fiduciary duty of loyalty in the corporate context, and (3) the SEC’s adoption of Regulation FD in 2000.

Both Guttentag’s and Nagy’s arguments are erudite and quite creative. Such creativity is a virtue in law professors, but not in prosecutors. Exercising poetic license to expand criminal liability risks violating the time-honored principal of legality and leaving citizens without adequate notice of the crimes for which they may be charged. Insider trading law in the United States is already plagued by vagueness, and concern over prosecutors’ continued exploitation of this ambiguity to push the line of liability further and further out is part of what motivated the Second Circuit to push back in Newman. I share the Newman court’s concern.

In this short article, I summarize what I take to be the most crucial aspects of Guttentag’s and Nagy’s arguments. I then offer some criticism. Specifically, I explain why I regard these interpretations as poetic expansions (rather than straightforward readings) of the law, a conclusion that was only strengthened by the Supreme Court’s recent decision in Salman.

November 4, 2017 | Permalink | Comments (0)

Wednesday, November 1, 2017

New Securities Law Articles in Print

The following law review articles relating to securities regulation are now available in paper format:

Zachary Ballas, Note, Equity Crowdfunding -- The JOBS Act (Almost) to the Rescue, 25 Cardozo J. Int'l & Comp. L. 317 (2017).

Benjamin J. Catalano, The Promise of Unfavorable Research: Ramifications of Regulations Separating Research and Investment Banking for IPO Issuers and Investors, 72 Bus. Law. 31 (2017).

Christian Chamorro-Courtland & Marc Cohen, Whistleblower Laws in the Financial Markets: Lessons for Emerging Markets, 34 Ariz. J. Int'l & Comp. L. 187 (2017).

Yuliya Guseva, Extraterritoriality of Securities Law Redux: Litigation Five Years After Morrison v. National Australia Bank, 2017 Colum. Bus. L. Rev. 199.

Robert C. Hockett & Saule T. Omarova, The Finance Franchise, 102 Cornell L. Rev. 1143 (2017).

Kumiko Koens & Charles W. Mooney Jr., Security Interests in Book-Entry Securities in Japan: Should Japanese law Embrace Perfection by Control Agreement and Security Interests in Securities Accounts?, 38 U. Pa. J. Int'l L. 761 (2017).

Gala Ades-Laurent, Note, Disappearing Stock Options: The Evolution of Equity Pay, 2017 Colum. Bus. L. Rev. 347.

Edward T. McDermott, Holder Claims -- Potential Causes of Action in Delaware and Beyond, 41 Del. J. Corp. L. 933 (2017).

Samantha Osborne, Note, Dodd-Frank Whistleblower Provision: Determining Who Qualifies as a Whistleblower, 41 Del. J. Corp. L. 903 (2017).



November 1, 2017 | Permalink | Comments (0)

NASAA Spotlights Warning Signs of Guardian Financial Abuse

Details available here.

November 1, 2017 | Permalink | Comments (0)

Sunday, October 15, 2017

Rosenfeld on SEC Enforcement

David Rosenfeld has posted Admissions in SEC Enforcement Cases: The Revolution That Wasn't on SSRN with the following abstract:

In 2013, the SEC departed from its long-standing policy of settling enforcement matters on a no-admit/no-deny basis, and for the first time began to require admissions when settling certain cases. The new admissions policy was greeted with considerable concern by many who thought it would lead to fewer settlements, more litigation, and a decline in the effectiveness of SEC enforcement. After more than four years, a full assessment of the policy is in order. The SEC continues to report record enforcement numbers and has touted the admissions policy as a great success. However, this Article empirically demonstrates that the SEC has obtained admissions in a very small number of cases since adopting the new policy, and on only a few occasions in cases involving the most serious charges, namely scienter-based fraud. Moreover, it shows that the SEC has applied the new policy inconsistently and haphazardly, treating like cases differently—a problem that is compounded by a complete lack of transparency in the process. This Article contends that these trends reveal a deliberate strategy of accommodation on the part of the SEC, through which the agency has trumpeted a message of tough enforcement and public accountability, while in reality continuing business as usual. In light of these issues, this Article concludes that the admissions policy should be reconsidered or abandoned altogether.

October 15, 2017 | Permalink | Comments (0)