Showing archive for: “Securities Regulation”
Why do insiders trade illegally?
Not, as economic theory would predict, because they need the money, according to Bhattacharya and Marshall, Do They Do it for the Money? Here’s the abstract: Using a sample of all top management who were indicted for illegal insider trading in the United States for trades during the period 1989-2002, we explore the economic rationality ... Why do insiders trade illegally?
Crowdfunding
Should you have to do a costly SEC registration and work through a registered broker-dealer just to raise a little money for your start-up? Today’s WSJ covers so-called “crowd-funding.” It tells of a guy who raised $41,000 from 17 investors. The business has done well, but the website it used was ordered to stop doing ... Crowdfunding
Congressional insider trading
CBS is all hot and bothered about insider trading by Congress. Steve Bainbridge is not so sure it’s illegal. Neither am I, and I question whether it should be on policy grounds (see here, first published here). I suggest more disclosure, and reducing the opportunity for all kinds of corruption by having less law.
The NYT on Romney @ Bain
A long front page article in today’s NYT tries to make political hay out of Romney’s time at private equity firm Bain Capital. The article supports the White House’s efforts to, as the article says, “frame Mr. Romney’s record at Bain as evidence that he would pursue slash and burn economics and that his business ... The NYT on Romney @ Bain
The uncorporate approach to poor earnings
Yesterday’s WSJ reported that hedge funds are facing possible investor redemption demands: As the year comes to a close, some investors say they are reviewing how their managers have performed through the recent volatility and are making decisions about whether to cash out of underperforming funds. Investors who want out before the end of the ... The uncorporate approach to poor earnings
Illinois Corporate Colloquium: Choi on SEC backdating investigations
Yesterday at the Illinois Corporate Colloquium Steve Choi presented his paper (with Pritchard and Weichman), Scandal Enforcement at the SEC: Salience and the Arc of the Option Backdating Investigations. Here’s the abstract: We study the impact of scandal-driven media scrutiny on the SEC’s allocation of enforcement resources. We focus on the SEC’s investigations of option ... Illinois Corporate Colloquium: Choi on SEC backdating investigations
SEC Organizational Reform Hearing
The semester is off to a bang. I arrived at Stanford Monday to start teaching in the Law School and begin a research fellowship at the Hoover Institution. Yesterday I hiked in the mountains overlooking the SF Bay. Today I am flying back to DC (and blogging in flight, how cool is that) to testify ... SEC Organizational Reform Hearing
2011 Illinois Corporate Colloquium: Shadab on credit risk transfer
The 2011 Illinois Corporate Colloquium got off to a good start with Houman Shadab presenting his paper, The Good, the Bad, and the Savvy: Credit Risk Transfer Governance. Here’s the abstract: Goldman Sachs and AIG on the eve of the 2008 financial crisis were bound together through a web of credit risk transfer (CRT) contracts ... 2011 Illinois Corporate Colloquium: Shadab on credit risk transfer
Can insider trading combat accounting fraud?
Last year I suggested that regulators would better fight corporate fraud by letting those in the know trade on the information than through the complex whistleblowing rules like those in Dodd-Frank. Robert Wagner has similar thoughts. The article is Gordon Gekko to the Rescue?: Insider Trading as a Tool to Combat Accounting Fraud. Here’s the ... Can insider trading combat accounting fraud?
Short-selling and market efficiency
Another day, another paper showing evidence of the negative effect on market efficiency of bans on short-selling. Today it’s Yerkes, Regulatory Trading Restrictions, Overvaluation, and Insider Selling. Here’s the abstract: A contentious debate is emerging over the regulatory response to the financial crisis. This paper takes advantage of a rare opportunity to empirically test sweeping ... Short-selling and market efficiency
The arbitration (and death?) of securities class actions
Barbara Black has suggested that the time may have come to reconsider arbitration of federal securities claims against issuers (and not just brokers). And that’s only the beginning. Here’s the abstract: Ever since the U.S. Supreme Court held that arbitration provisions contained in brokerage customers’ agreements were enforceable with respect to federal securities claims, proposals have ... The arbitration (and death?) of securities class actions
Kathleen Casey and the power of dissent
I would like to add to Jay’s praise of departing SEC Commissioner Casey my own appreciation. I noted a couple of weeks ago the Commissioners Casey and Paredes’ influence on the DC Circuit’s proxy access decision. These Commissioners haven’t just been nay-sayers throwing down a gauntlet against regulation. Rather, they have been consistently thoughtful and ... Kathleen Casey and the power of dissent
