Thursday, April 28, 2016
The Central States Law Schools Association 2016 Scholarship Conference will be held on Friday, September 23 and Saturday, September 24 at the University of North Dakota School of Law in Grand Forks, ND.
CSLSA is an organization of law schools dedicated to providing a forum for conversation and collaboration among law school academics. The CSLSA Annual Conference is an opportunity for legal scholars, especially more junior scholars, to present working papers or finished articles on any law-related topic in a relaxed and supportive setting where junior and senior scholars from various disciplines are available to comment. More mature scholars have an opportunity to test new ideas in a less formal setting than is generally available for their work. Scholars from member and nonmember schools are invited to attend.
Registration will formally open in July. Hotel rooms are already available, and more information about the CSLSA conference can be found on our website at www.cslsa.us.
The following law review articles relating to securities regulation are now available in paper format:
Ivet A. Bell, Note, The Constitutionality of the SEC Pay to Play Rule: Why 206(4)-5 Survives the Deregulatory Trend in Campaign Finance, 49 Colum. J.L. & Soc. Probs. 1 (2015).
Kaitlin A. Bruno, Comment, The Halfway Point Between Barbary Coast and Shangri-La: Extraterritoriality and the Viability of the Economic Reality Method Post-Parkcentral Global Hub Ltd. v. Porsche Automobile Holdings SE, 65 Am. U. L. Rev. 435 (2015).
Maggie Guidotti, Comment, Seeking "the SEC's Full Protection": A Critique of the New Frontier in Municipal Securities Enforcement, 82 U. Chi. L. Rev. 2045 (2015).
Kathryn Hastings, Comment, Keeping Whistleblowers Quiet: Addressing Employer Agreements to Discourage Whistleblowing, 90 Tul. L. Rev. 495 (2015).
Libor Klimek, Effective Enforcement of Sanctions for Market Abuse in the EU: Introduction of Criminal Sanctions, 7 J. Eurasian L. 273 (2014).
David F. Larcker, Allan L. McCall & Gaizka Ormazabal, Outsourcing Shareholder Voting to Proxy Advisory Firms, 58 J.L. & Econ. 173 (2015).
Kelly Mathews, Comment, Crowdfunding, Everyone's Doing It: Why & How North Carolina Should Too, 94 N.C. L. Rev. 276 (2015).
Financial Regulation: Reflections and Projections, Introduction by Usha Rodrigues and Mehrsa Baradaran; keynote by Steven L. Schwarcz; articles by Urska Velikonja, Arthur E. Wilmarth, Jr., Erik F. Gerding, Kristin N. Johnson, Heidi Mandanis Schooner, Daniel Schwarcz, Robert B. Ahdieh, Robert F. Weber and Joshua T. White. 50 Ga. L. Rev. 1-325 (2015).
The Future of Financial Intermediation, Articles by Lawrence A. Cunningham, Dale A. Oesterle, Patricia A. McCoy, Onnig H. Dombalagian, Kathryn Judge, Tom C.W. Lin, Michael Abramowicz, Erik P.M. Vermeulen and Francisco Reyes. 50 Wake Forest L. Rev. 509-760 (2015).
Wednesday, March 30, 2016
The following law review articles relating to securities regulation are now available in paper format:
Chris Brummer, Disruptive Technology and Securities Regulation, 84 Fordham L. Rev. 977 (2015).
Sarah Dadush, Regulating Social Finance: Can Social Stock Exchanges Meet the Challenge?, 37 U. Pa. J. Int'l L. 139 (2015).
James A. Fanto, The Vanishing Supervisor, 41 J. Corp. L. 117 (2015).
Justin C. Ferrone, Comment, Classless Investing: Why Enforcing Class Action Waivers Is Both Proper, and Beneficial, for Investors, 45 Seton Hall L. Rev. 1049 (2015).
Adam R. Foresman, Note, Once More Unto the [Corporate data] Breach, Dear Friends, 41 J. Corp. L. 343 (2015).
Greg Gaught, Note, Rethinking Janus: Preserving Primary-Participant Liability in SEC Antifraud Enforcement Actions, 65 Duke L.J. 527 (2015).
Anand Goel & Sumon Mazumdar, The Problem of Hindsight Bias in Fraudulent Conveyance Cases: A Review of Possible "Market-Based" Solutions, 27 Research in L. & Econ. 91 (2015).
Joseph A. Grundfest, Morrison, the Restricted Scope of Securities Act Section 11 Liability, and Prospects for Regulatory Reform, 41 J. Corp. L. 1 (2015).
Ashley J. Hersutamto, Comment, A Fundamentally Different Regulatory Calculus: The Advent of Regulation D, Rule 506(c), 10 FIU L. Rev. 239 (2014).
Stephanie Klein, Comment, Interpreting the Definition of a Whistleblower under Dodd-Frank's Anti-Retaliation Provision: How and Why Public Policy Should Guide the Courts in Finding that Whistleblowers Do Not Need to Report to the SEC, 10 FIU L. Rev. 279 (2014).
Julia Kline, Comment, Basic's "Bitter Harvest": The Court's Continued Adherence to a Flawed Economic Theory in Halliburton, 48 Loy. L.A. L. Rev. 557 (2014).
Michael M. Krauss, Julie R. Landy & Jeremy R. Harrell, For Whom the Whistle Blows: The Role of Private Enforcement in Dodd-Frank's Regulatory Framework, 8 U. St. Thomas J.L. & Pub. Pol'y. 194 (2014).
Jonathan C. Lipson et al, The Pattern in Securitization and Executive Compensation: Evidence and Regulatory Implications, 20 Stan. J.L. Bus. & Fin. 323 (2015).
Michael K. Molitor, Business Associations, 60 Wayne L. Rev. 837 (2015).
Robert Strongarone, Comment, Settling the Scienter Split: Why Scienter Should Not Be Required for SEC Enforcement of Rule 13b2-2 Violations, 10 FIU L. Rev. 317 (2014).
Andrew Walker, Note, Why Shouldn't We Protect Internal Whistleblowers? Exploring Justifications for the Asadi Decision, 90 N.Y.U. L. Rev. 1761 (2015).
Yesha Yadav, How Algorithmic Trading Undermines Efficiency in Capital Markets, 68 Vand. L. Rev. 1607 (2015).
Symposium in Honor of Professor Alan R. Bromberg. Preface by Marc I. Steinberg; tributes by Christopher H. Hanna, Joseph J. Norton, Marc I. Steinberg, Peter Winship, C. Steven Bradford, Douglas M. Branson, Richard M. Buxbaum, John C. Coffee, Jr., Wendy Gerwick Couture, James D. Cox, Onnig H. Dombalagian, Franklin A. Gevurtz, Roberta S. Karmel, Michael J. Kaufman, John M. Wunderlich, Mark J. Loewenstein, Lewis D. Lowenfels, Michael J. Sullivan, Joan MacLeod Heminway, Daniel J. Morrissey, Norman S. Poser, A.C. Pritchard, Joel Seligman, Mary Siegel, Manning Gilbert Warren III and Verity Winship. 68 SMU L. Rev. 595-924 (2015).
Saturday, March 12, 2016
The following law review articles relating to securities regulation are now available in paper format:
Hilary J. Allen, Putting the "Financial Stability" in Financial Stability Oversight Council, 76 Ohio St. L.J. 1087 (2015).
Cathy Hwang & Benjamin P. Edwards, The Value of Uncertainty, 110 Nw. U. L. Rev. 283 (2015).
Friday, March 11, 2016
Cathy Hwang & Benjamin P. Edwards have posted The Value of Uncertainty on SSRN with the following abstract:
In recent years, federal courts have heard, without clear subject matter jurisdiction, contract disputes involving billions of dollars worth of securitized financial instruments (SFIs). These SFI disputes are litigated in federal court under the federal interpleader statute, which specifies that a federal court has subject matter jurisdiction over these cases only when parties deposit the disputed amount with the court. SFI litigants have ignored this requirement, so courts have, at best, uncertain jurisdiction over these cases. Why have no parties raised the jurisdictional defect, even though some would stand to gain from raising it? This Essay advances game theoretical explanations for litigants’ puzzling silence in these major post-financial crisis cases, and argues that parties may strategically value litigating in federal court under jurisdictional uncertainty over other alternatives.
Stanislav Dolgopolov has posted Wholesaling Best Execution: How Entangled Are Off-Exchange Market Makers? on SSRN with the following abstract:
This Article examines the reach of the duty of best execution to and potential breaches of this duty by off-exchange market makers in the context of the evolving business model of these market participants and the current market structure crisis. Several key areas, such as routing practices, order handling functionalities, and the usage of private data feeds, are analyzed.
Blair Bowman, Note, A Comparative Analysis of Crowdfunding Regulation in the United States and Italy, 33 Wis. Int'l L.J. 318 (2015).
Gregory DiCiancia, Note, Limiting Frivolous Shareholder Lawsuits via Fee-Shifting Bylaws: A Call for Delaware to Overturn and Revise Its Fee-Shifting Bylaw Statute, 56 B.C. L. Rev. 1537 (2015).
Johannes W. Fedderke & Marco Ventoruzzo, Do Conservative Justices Favor Wall Street? Ideology and the Supreme Court's Securities Regulation Decisions, 67 Fla. L. Rev. 1211 (2015).
Merritt B. Fox, Lawrence R. Glosten & Gabriel V. Rauterberg, The New Stock Market: Sense and Nonsense, 65 Duke L.J. 191 (2015).
Joseph Grusman, Note, Gaming Corporations Gamble with the FCPA, 6 UNLV Gaming L.J. 117 (2015).
Stephen J. Kozey, Note. The Hague Securities Convention: An Opportunity to Take the UCC Global, 46 Geo. J. Int'l L. 1213 (2015).
Jerry W. Markham, High-Speed Trading on Stock and Commodity Markets--From Courier Pigeons to Computers, 52 San Diego L. Rev. 555 (2015).
Leah Neupert, Comment, A Court's Guide on How to Gut Precedent by Relying on It: Halliburton II's Puzzling Effect on Securities-Fraud Class Actions, 76 La. L. Rev. 225 (2015).
Abram Olchyk, Comment, A Spoof of Justice: Double Jeopardy Implications for Convictions of Both Spoofing and Commodities Fraud for the Same Transaction, 65 Am. U. L. Rev. 239 (2015).
Samuel D. Posnick, Note, A Merry-Go-Round of Metal and Manipulation: Toward a New Framework for Commodity Exchange Self-Regulation, 100 Minn. L. Rev. 441 (2015).
Cary Martin Shelby, Privileged Access to Financial Innovation, 47 Loy. U. Chi. L.J. 315 (2015).
David Solomon & Eugene Soltes, What Are We Meeting For? The Consequences of Private Meetings with Investors, 58 J.L. & Econ. 325 (2015).
Bernard Tsepelman, Note, A Safe Harbor for Communicating or Trading on Material Nonpublic Information Obtained through "Replicable" Methods or Strategies: Proposed SEC Rule 10b5-SH, 37 Cardozo L. Rev. 353 (2015).
Sunday, February 14, 2016
Lynn A. Baker, Michael A. Perino & Charles Silver, Is the Price Right? An Empirical Study of Fee-Setting in Securities Class Actions, 115 Colum. L. Rev. 1371 (2015).
David R. Hague, Expanding the Ponzi Scheme Presumption, 64 DePaul L. Rev. 867 (2015).
McKay S. Harline, Comment, Can We Make Them Obey? U.S. Reporting Companies, Their Foreign Suppliers, and the Conflict Minerals Disclosure Requirements of Dodd-Frank, 35 Nw. J. Int'l L. & Bus. 439 (2015).
Ann M. Lipton, Slouching Towards Monell: The Disappearance of Vicarious Liability Under Section 10(b), 92 Wash. U. L. Rev. 1261 (2015).
Ann M. Olazabal & Patricia S. Abril, Recklessness as a State of Mind in 10(b) Cases: The Civil-Criminal Dialectic, 18 N.Y.U. J. Legis. & Pub. Pol'y 305 (2015).
Urska Velikonja, Waiving Disqualification: When do Securities Violators Receive a Reprieve?, 103 Cal. L. Rev. 1081 (2015).
Friday, January 29, 2016
Weiling Chou, Note, Restoring Integrity in American Businesses: A Broad Interpretation of the Foreign Corrupt Practices Act, 60 Wayne L. Rev. 283 (2014).
Meredith R. Conway, Money, Money, Money; It's a Rich Man's World: Making the Corporate Tax Fair, 17 U. Pa. J. Bus. L. 1181 (2015).
George W. Dent, Jr., A Defense of Proxy Advisors, 2014 Mich. St. L. Rev. 1287.
Asaf Eckstein, Great Expectations: The Peril of an Expectations Gap in Proxy Advisory Firm Regulation, 40 Del. J. Corp. L. 77 (2015).
Sharon Hannes, Super Hedge Fund, 40 Del. J. Corp. L. 163 (2015).
Suren Gomtsian, The Governance of Publicly Traded Limited Liability Companies, 40 Del. J. Corp. L. 207 (2015).
Tara E. Levens, Comment, Too Fast, Too Frequent? High-Frequency Trading and Securities Class Actions, 82 U. Chi. L. Rev. 1511 (2015).
Jeremy R. McClane, The Sum of Its Parts: The Lawyer-Client Relationship in Initial Public Offerings, 84 Fordham L. Rev. 131 (2015).
Galit A. Sarfaty, Shining Light on Global Supply Chains, 56 Harv. Int'l L.J. 419 (2015).
Jeremy Schara, Note, Knowledge is salvation: informing investors by regulating disclosures to safeguard best execution, 43 Hofstra L. Rev. 1231 (2015).
Symposium--Transnational Securities and Regulatory Litigation in the Aftermath of Morrison v. Australia National Bank. Introduction by Franklin A. Gevurtz; articles by Katherine Florey, Kenneth S. Gallant, Xandra E. Kramer and Bart Krans, 27 Pac. McGeorge Global Bus. & Dev. L.J. 173-301 (2014).
The securities regulatory authorities in Manitoba, Ontario, Québec, New Brunswick and Nova Scotia have adopted in final form Multilateral Instrument 45-108, which governs crowdfunding in those jurisdictions. The Canadian Securities Administrators's Notice of Publication is available here. The Notice states in part:
As securities regulators, we have the responsibility to examine whether securities law contributes to the efficient functioning of our capital markets, while maintaining adequate investor protection. This includes assessing whether the securities regulatory framework remains responsive and relevant in a dynamic environment that is being shaped by advances in technology and a broad array of demographic, cultural and economic forces.The internet and social media have enabled start-ups and technology companies that foster innovation to reach out to a large number of investors, including retail investors (the crowd), to raise capital.
Selling securities over the internet to a large number of investors, sometimes referred to as "crowdfunding", has emerged as a new way for some businesses, particularly start-ups and small and medium-sized enterprises (SMEs), to access capital that would not have otherwise been accessible. "Crowdfunding" is an umbrella term used to capture many forms of capital and fund raising, that in this context, we mean raising capital from members of the public through the distribution/sale of securities. Crowdfunding may enable issuers to raise capital more effectively and at a lower cost while also providing investors with greater access to investment opportunities. The 45-108 crowdfunding regime is intended to leverage the use of the internet and social media to facilitate capital formation primarily for start-ups and SMEs that foster innovation and to provide new investment opportunities for investors. At the same time, we believe the 45-108 crowdfunding regime maintains an appropriate level of investor protection and regulatory oversight to be responsive both to global market developments in this area and to our mandate to provide protection to investors.
The 45-108 crowdfunding regime will enable start-ups and SMEs in their early-stages of development to raise capital online from a large number of investors through a single registered funding portal. A limit on the total amount that can be raised will be imposed on issuers and investors will be subject to investment limits as a means of limiting their exposure to a highly risky investment. The registration of the funding portal is a key investor protection measure as registration addresses, among other things, potential integrity concerns that may apply to funding portals and the persons operating them, as well as potential concerns relating to conflicts of interest and self-dealing.
We believe the introduction of the 45-108 crowdfunding regime is a significant step in enhancing capital raising alternatives in Canada, particularly for start-ups and SMEs. The introduction of the 45-108 crowdfunding regime in the participating jurisdictions will allow start-ups and SMEs to benefit from greater access to capital from investors that was previously limited.
The SEC Actions Blog has compiled This Week In Securities Litigation (Week ending January 29, 2016).
Saturday, January 23, 2016
Wulf A. Kaal and Dale A. Oesterle have posted The History of Hedge Fund Regulation in the United States on SSRN with the following abstract:
The hedge fund industry in the United States evolved from a niche market participant in the early 1950s to a major industry operating in international financial markets. Hedge funds in the United States were originally privately-held, privately-managed investment funds, unregistered and exempt from federal securities regulation. With increasing investor demand and significant growth of the hedge fund industry came a tectonic shift in the regulatory framework applicable to the industry. The book chapter summarizes the regulatory evolution of the hedge fund industry.
Andrew A. Schwartz has posted The Digital Shareholder on SSRN with the following abstract:
Crowdfunding, a new Internet-based securities market, was recently authorized by federal and state law in order to create a vibrant, diverse, and inclusive system of entrepreneurial finance. But will people really send their money to strangers on the Internet in exchange for unregistered securities in speculative startups? Many are doubtful, but this Article looks to first principles and finds reason for optimism.
Well-established theory teaches that all forms of startup finance must confront and overcome three fundamental challenges: uncertainty, information asymmetry, and agency costs. This Article systematically examines this “trio of problems” and potential solutions in the context of crowdfunding. It begins by considering whether known solutions used in traditional forms of entrepreneurial finance — venture capital, angel investing, and public companies — can be borrowed by crowdfunding. Unfortunately, these methods, especially the most powerful among them, will not translate well to crowdfunding.
Finding traditional solutions inert, this Article presents five novel solutions that respond directly to crowdfunding’s distinctive digital context: (1) wisdom of the crowd; (2) crowdsourced investment analysis; (3) online reputation; (4) securities-based compensation; and (5) digital monitoring. Collectively, these solutions provide a sound basis for crowdfunding to overcome the three fundamental challenges and fulfill its compelling vision.
Sunday, January 17, 2016
Jeffrey E. Alberts, & Bertrand Fry, Is Bitcoin a Security?, 21 B.U. J. Sci. & Tech. L. 1 (2015).
John P. Anderson, What's the Harm in Issuer-Licensed Insider Trading?, 69 U. Miami L. Rev. 795 (2015).
Alicia J. Davis, The Institutional Appetite for "Quack Corporate Governance," 2015 Colum. Bus. L. Rev. 1.
James A. Fanto, Surveillant and Counselor: A Reorientation in Compliance for Broker-Dealers, 2014 BYU L. Rev. 1121.
Zachary J. Gubler, Making Experimental Rules Work, 67 Admin. L. Rev. 551 (2015).
Nadelle Grossman, The Sixth Commissioner, 49 Ga. L. Rev. 693 (2015).
Kevin Haeberle, Stock-Market Law and the Accuracy of Public Companies' Stock Prices, 2015 Colum. Bus. L. Rev. 121.
Leo Katz, The Problem with Consenting to Insider Trading, 69 U. Miami L. Rev. 827 (2015).
Christopher Takeshi Napier, Note, Resurrecting Rule 14a-11: A Renewed Call for Federal Proxy Access Reform, Justifications and Suggested Revisions, 67 Rutgers U. L. Rev. 843 (2015).
Tyler A. O'Reilly, Reconstructing Short Selling Regulatory Regimes, 59 Wayne L. Rev. 53 (2013).
Frank Pasquale, Law's Acceleration of Finance: Redefining the Problem of High-Frequency Trading, 36 Cardozo L. Rev. 2085 (2015).
Gerald Paulovich, Note, Do "Say-on-Pay" Votes Say Anything about Director Fiduciary Duties?, 59 Wayne L. Rev. 875 (2013).
Usha R. Rodrigues, The Once and Future Irrelevancy of Section 12(g), 2015 U. Ill. L. Rev. 1529.
Luke N. Roniger, Note, Regulatory Dissent and Judicial Review, 2015 Colum. Bus. L. Rev. 390.
Daniel Schwarcz, A Critical Take on Group Regulation of Insurers in the United States, 5 UC Irvine L. Rev. 537 (2015).
J. Kelly Strader, (Re)conceptualizing Insider Trading: United States v. Newman and the Intent to Defraud, 80 Brook. L. Rev. 1419 (2015).
Sonila Themeli, Comment, FCPA Enforcement and the Need for Judicial Intervention, 56 S. Tex. L. Rev. 387 (2014).
Stephen Coleman Tily, Note, National Security Whistleblowing vs. Dodd-Frank Whistleblowing: Finding a Balance and a Mechanism to Encourage National Security Whistleblowers, 80 Brook. L. Rev. 1191 (2015).
William K.S. Wang, The Importance of "The Law of Conservation of Securities": A reply to John P. Anderson's "What's the Harm in Issuer-Licensed Insider Trading?", 69 U. Miami L. Rev. 811 (2015).
Yesha Yadav, Clearinghouses and Regulation by Proxy, 43 Ga. J. Int'l & Comp. L. 161 (2014).
Monday, December 21, 2015
NASAA has published its annual list of top investor threats. This year's list includes:
1. Unregistered products/unlicensed salesmen: The offer of securities by an individual without a valid securities license should be a red alert for investors. Con artists also try to bypass stringent state registration requirements to pitch unregistered investments with a promise of “limited or no risk” and high returns.
2. Promissory Notes: In an environment of low interest rates, the promise of high-interest-bearing promissory notes may be tempting to investors, especially seniors and others living on a fixed income. Promissory notes generally are used by companies to raise capital. Legitimate promissory notes are marketed almost exclusively to sophisticated or corporate investors with the resources to research thoroughly the companies issuing the notes and to determine whether the issuers have the capacity to pay the promised interest and principal. Most promissory notes must be registered as securities with the SEC and the states in which they are sold. Average investors should be cautious about offers of promissory notes with a duration of nine months or less, which in some circumstances do not require registration. Short-term notes that appear to be exempt from securities registration have been the source of most – but not all – of the fraudulent activity involving promissory notes identified by regulators.
3. Oil/Gas Investments: Many oil and gas investment opportunities, while involving varying degrees of risks to the investor, are legitimate in their marketing and responsible in their operations. However, as in many other investment opportunities, it is not unusual for unscrupulous promoters to attempt to take advantage of investors by engaging in fraudulent practices. Fraudulent oil and gas deals frequently are structured with the limited partnership (or other legal entity) in one state, the operation and physical presence of the field in a second state, and the offerings made to prospective investors in states other than the initial two states. As a result, there is less chance of an investor dropping by a well site or a nonexistent company headquarters. Such a structure also makes it difficult for authorities and victims to identify and expose the fraud.
4. Real Estate-related Investments: Troublesome real estate-related investments identified by securities regulators included non-traded real estate investment trusts (REITs), timeshare resales, and brokered mortgage notes. These types of products often carry higher risk. For example, non-traded REITs are sold directly to investors and are not traded on exchanges (as are conventional REITs). Non-traded REITS can be risky and have limited liquidity, which may make them unsuitable for certain investors.
5. Ponzi Schemes: The premise is simple: pay early investors with money raised from later investors. The only people certain to make money are the promoters who set the Ponzi in motion.
The statement begins:
Post the 2008 financial crisis, traditional credit providers have become increasingly constrained in their ability to make loans available for worthy investment projects, particularly with respect to small and medium enterprises. Policy makers and regulators have sought ways to encourage investment in small firms and start-ups. One of these ways has been through the use of crowdfunding, which seeks to leverage technology, inter alia, to provide an alternative channel for capital raising. However, when developing or investing in crowdfunding, IOSCO believes it is important for regulators and policy makers to balance the need for supporting economic growth and recovery with that of protecting investors.
Rajeev R. Bhattacharya & Stephen J. O'Brien, Arbitrage Risk and Market Efficiency--Applications to Securities Class Actions, 55 Santa Clara L. Rev. 643 (2015).
Ryan Jones, Comment, The Fight Over Home Court: An Analysis of the SEC's Increased Use of Administrative Proceedings, 68 SMU L. Rev. 507 (2015).
Michael A. Perino, A Scandalous Perversion of Trust: Modern Lessons from the Early History of Congressional Insider Trading, 67 Rutgers U. L. Rev. 335 (2015).
Sam Thypin-Bermeo, Comment, The S.E.C. and the Damsel in Distress: A Contextual Analysis of the Duty of Best Execution, 27 Yale J.L. & Feminism 169 (2015).