Recent uclalaw_lewps items

The Misregulation of Person-to-Person Lending

Fri, 26 Jun 2026 00:00:00 +0000

Amid a financial crisis and credit crunch, retail investors are lending a billion dollars over the Internet, on an unsecured basis, to total strangers. Technological and financial innovation allows person-to-person (“P2P”) lending to connect lenders and borrowers in ways never before imagined. However, all is not well with P2P lending. The SEC threatens the entire industry by asserting jurisdiction with a fundamental misunderstanding of P2P lending. This Article illustrates how the SEC has transformed this industry, making P2P lending less safe and more costly than ever, threatening its very existence. The SEC’s misregulation of P2P lending provides an opportunity to theorize about regulation in a rapidly disintermediating world. The Article then proposes a preferable regulatory scheme designed to preserve and discipline P2P lending’s innovative mix of social finance, microlending, and disintermediation. This proposal consists of regulation by the new Consumer Financial Protection...

Violent White-Collar Crime

Fri, 26 Jun 2026 00:00:00 +0000

It is orthodox to divide the universe of crimes according to their violence. There are violent crimes, prototypically street crimes. And there are nonviolent crimes of fraud, prototypically white-collar crimes. Although the implications of this distinction are controversial, the distinction itself is not controversial. This Essay challenges this universal dichotomy by offering an account of violence that admits many crimes of deception. That is, properly understood, violence can be found in the fraudulent foreclosure, the embezzlement, and the forged check.

Index Theory: The Law, Promise and Failure of Financial Indices

Fri, 26 Jun 2026 00:00:00 +0000

Financial indices, like the S&P 500 or the Consumer Price Index, have become a ubiquitous feature of our financial markets. One index, the London InterBank Offered Rate (“Libor”), may be the world’s most important number, an interest rate benchmark upon which hundreds of trillions of dollars depend. Yet, almost everyday new revelations emerge that Libor was tampered with during the height of the financial crisis by one or many of the world’s most prominent banks, with billions of dollars potentially misappropriated. This index disruption has attracted tremendous interest from regulators, private litigants, and market observers. Despite their importance, however, financial indices are poorly understood, and almost completely unstudied. In this Article, we explain why and how people use financial indices as well as how they are created. We show human discretion and value judgment to be essential ingredients in even the most “objective” indices. We then develop a taxonomy of...

Wrong-Termism, Right-Termism, and the Liability Structure of Investor Time Horizons

Fri, 26 Jun 2026 00:00:00 +0000

Do investor time horizons lead to inefficient business conduct in the real economy? An extensive finance literature analyzes whether particular practices (e.g., high frequency trading and stock buybacks) lead firms to operate with inefficiently myopic investment horizons, and an extensive legal literature considers the appropriateness of policy interventions. This Article joins those debates by charting the space of possibilities: what might be the causes of problematic time horizons? What solutions are available? One implication of this analysis is that there may be unexplored market-based solutions located on the liability side of investors’ balance sheets. This Article also argues that we should avoid characterizing the time horizon problem in a manner that subtly endorses some contested perspective on the appropriate time horizon. Rather than investigating excessive “short-termism” or “long-termism,” our starting point should be the broader category of “wrong-termism.” This...

Privatizing Personalized Law

Fri, 26 Jun 2026 00:00:00 +0000

In recent years, scholars have devoted increasing attention to the prospect of personalized law. The bulk of the literature has so far concerned whether to personalize any law and, if so, what substantive changes should be instantiated through personalization. Comparatively little discussion has gone to the authorship personalized laws. Who will make personalized laws? Who will enforce them? In this Essay, I propose we consider who in the personalization debate. Specifically, I identify the policy consideration that bear on the optimal maker or enforcer of personalized law. To put it another way, my essay begins where most of the prior literature leaves off: having concluded that personalized law has some merit in a given area, I ask when the state should facilitate personalized lawmaking by non-state actors.

Enterprise without Entities

Fri, 26 Jun 2026 00:00:00 +0000

Scholars and practicing lawyers alike consider legal entities to be essential. Who can imagine running a large business without using a business organization, such as a corporation or partnership? This Article challenges conventional wisdom by showing that vast enterprises – with millions of customers paying trillions of dollars – often operate without any meaningful use of an entity.

This Article introduces the reciprocal exchange, a type of insurance company that operates without any meaningful use of a legal entity. Instead of obtaining their insurance from a common nexus of contract, customers directly insure one another through a web of countless bilateral agreements. While often overlooked or conflated with mutual insurance companies, reciprocal exchanges include some of America’s largest and best known insurance enterprises.

This Article explores how it is possible to run an international conglomerate with essentially no recourse to organizational law as...

Insider Tainting: Strategic Tipping of Material Non-Public Information

Fri, 26 Jun 2026 00:00:00 +0000

Insider trading law is meant to be a shield, protecting the market and investors from connected traders, but it can also be a sword. Insofar as we penalize trading on the basis of material non-public information, it becomes possible to share information strategically in order to disable or constrain innocent investors. A hostile takeover can be averted, or a bidding war curtailed, because information recipients must then refrain from trading. This Article offers the first general account of “insider tainting,” an increasingly pervasive phenomenon of weaponizing insider trading law.

Ex Tempore Contracting

Fri, 26 Jun 2026 00:00:00 +0000

This Article argues that a cornerstone assumption of contemporary contracts scholarship is misleading and limited. Leading academic commentary explicitly assumes that contractual responsibilities are determined in the following way: parties determine many of their duties ex ante, by specifying terms at the time of contract formation, and the rest of the terms they leave vague, for a court to specify ex post if it should prove important. This ex ante/ex post dichotomy is the guiding framework in attempts to understand contract design and interpretation. For example, parties use terms like “merchantable” quality when the cost of being more specific up front is higher than the cost of relying on a court to later elaborate its meaning. Yet this dichotomy obscures a third, “real-time” approach to contracting: parties frequently leave terms unspecified and delegate ongoing determination to someone other than a court. This Article identifies this phenomenon, which can be called –...

Insider Trading: Are Insolvent Firms Different?

Fri, 26 Jun 2026 00:00:00 +0000

Federal law restricts insider trading. Yet these restrictions operate differently on insolvent or bankrupt firms. The law is less constraining in some respects: federal law extensively regulates the trading of residual claims in solvent firms but not insolvent firms. However, the law is more constraining in other respects: Insider trading law does little to limit debt-trading at solvent firms, but a bankruptcy enmeshes all creditors in a web of insider trading rules. This Article identifies insolvency’s economic and legal influence on insider trading law and then normatively evaluates this transformation.This Article was written in connection with the Brooklyn Journal of Corporate, Financial, & Commercial Law's 2018 Symposium: The Market for Corporate Control in the Zone of Insolvency.

Upstream Liability, Entities as Boards, and the Theory of the Firm

Fri, 26 Jun 2026 00:00:00 +0000

Directors have fiduciary duties, and the most litigated and most demanding of those duties is the duty of loyalty. The key questions for duty of loyalty litigation are director- by-director questions: Did this particular director have a conflict? Is it futile to make a demand on that particular director? What does it mean to ask director-by-director questions if corporations have just one director, which is itself an entity? Shall we inquire about particular humans in the managing entity or limit our analysis to the entity itself? The question becomes richer and more important if the board-entities opt to bundle services: We know how to evaluate a conflict when a director urges the company to patronize her own accounting or banking firm. How should we evaluate the conflict if a managing entity opts to use its own accounting or banking department? Our conflict analysis is usually of contractual transactions but the essence of the Coasian firm is the absence of a contract to analyze....

The Jurisprudence of Mixed Motives

Fri, 26 Jun 2026 00:00:00 +0000

Legal results often turn on motive, and motive is often complex. How do various domains of law deal with mixed motives? Are we condemned by our darkest motive, forgiven according to our noblest, or something in between? This Article conducts a sweeping examination of motivations in the law, from Equal Protection and employment discrimination to insider trading and income taxation. It develops a precise descriptive vocabulary for categorizing the treatment of mixed motives in numerous areas of law. This framework yields several important insights. For example: nearly all domains of law pick among just four motive standards, and motive-based analysis is far more workable than commonly believed.

The Corporate Governance of National Security

Fri, 26 Jun 2026 00:00:00 +0000

At hundreds of companies, the government installs former spies and military officers to run the business without shareholder oversight, putting security before profits in order to protect vital projects from potentially treasonous influences. Through procedures I call “National Security Corporate Governance,” corporate boardrooms have quietly become instruments of national defense, marrying the efficiency norms of corporate law and the protective ambitions of national security. How is this achieved, and how successfully? Using a variety of research approaches – including Freedom of Information Act (FOIA) requests, archival searches, telephone interviews, and in-person conversations with industry insiders – this Article illuminates a secretive government program and the challenging questions regarding the relationship between private ordering and public goals such as national security.

Revolution in Manipulation Law: The New CFTC Rules and the Urgent Need for Economic and Empirical Analyses

Fri, 26 Jun 2026 00:00:00 +0000

Two major banks have now admitted that their employees successfully manipulated worldwide interest rates through the London InterBank Offered Rate, the most widely used interest rate index. Libor is the interest rate term for trillions of dollars of swaps and loans, and its manipulation may have been used to extract billions of dollars. These allegations come just as commodities manipulation law has been dramatically reformed and the Commodity Futures Trading Commission (“CFTC”) given vast new regulatory powers. This Article provides the first extended, scholarly analysis of the CFTC’s new anti-manipulation rules. We consider the difficulty the rules address: commodities manipulation claims have traditionally faced nearly insuperable obstacles to success in prosecuting manipulations like that of Libor. We then analyze the new rules, including their extension of the CFTC’s powers to cover the swap market. The new rules appropriately lower the standards of pleading and proof, and...

Trustee or Delegate? Understanding Representation to Illuminate Shareholder Governance and Regulatory Change

Fri, 26 Jun 2026 00:00:00 +0000

It is generally agreed that directors are the shareholders representatives, but what is a representative and what is entailed by representation? Although courts and scholars have explored the duties and powers of directors as representatives, the concept of representation tends to go unexamined. By contrast, political philosophers have considered representation for centuries and political theorists have generated an extensive empirical literature. This article applies the representation theory scholarship to perennial and emerging problems in corporate law.

Amicus Curiae Brief in Gelboim v. Bank of America (Libor Manipulation Litigation) on Behalf of Financial Markets Law Professors in Support of Plaintiffs-Appellants

Fri, 26 Jun 2026 00:00:00 +0000

Amicus Curiae Brief in Gelboim v. Bank of America (Libor Manipulation Litigation) on Behalf of Financial Markets Law Professors in Support of Plaintiffs-Appellants

Assessing Transnational Private Regulation of the OTC Derivatives Market: ISDA, the BBA, and the Future of Financial Reform

Fri, 26 Jun 2026 00:00:00 +0000

For the last twenty years, the dominant narrative of the over-the-counter derivatives market has been one of absent regulation, deregulation, and regulatory conflict, predictably resulting in disaster. This Article challenges this narrative, arguing that the global derivatives market has been subject to pervasive and harmonized regulation by what should be recognized as transnational private regulators. Recognizing the reality of widespread transnational private regulation of derivatives has significant implications, which this Article explores. Appreciating the actual regulatory status quo is essential if policymakers are to correctly diagnose problems, avoid past regulatory errors, and plan effective remedies. There are also advantages to relying on private transnational regulation, as increased governmental effort to regulate the OTC derivatives space may undermine and fracture existing regulation. To be sure, private transnational regulation carries risks that have sometimes...

Bad Policy for Good Policies: Article 9’s Insurance Exclusion

Fri, 26 Jun 2026 00:00:00 +0000

Article 9 of the Uniform Commercial Code excludes from its scope any transfer of an interest in a life insurance policy. Thus, any lender whose security is a life insurance policy may not look to the UCC to determine her rights. This Article argues that the exclusion should be eliminated because it leaves insurance governed by antiquated and problematic law. Three specific problems are considered: non-UCC law does not have a satisfactory alternative to UCC perfection; non-UCC law is insufficient to prevent lenders from abusively taking more than their share of value from defaulted policies; and non-UCC law allows insurance companies to hinder securitization through the “reservation problem.” The result is that Americans borrow $121 billion worth of policy loans, almost all of which comes without serious competition. Eliminating the life insurance exclusion will rationalize the law of lending in this area, and improve prospects for a secondary market.

Insider Trading in Commodities Markets

Fri, 26 Jun 2026 00:00:00 +0000

In securities markets, insider trading is a crime. In commodities, insider trading is almost completely legal. This divergent treatment has long been accepted as appropriate, given perceived differences between the markets. For example, it has been thought that futures traders are sophisticated enough to neither need nor want protections from informed traders, and that the assets traded – corn, copper – do not lend themselves to insider trading anyway.

This Article disagrees, showing that purported differences between these two markets do not withstand serious scrutiny, and that insider trading is harmful in the same ways in both markets and should be governed by the same restrictions. Understanding securities and commodities markets to be peer financial markets permits for the first time a serious dialogue between scholars of both fields, and this Article takes the first steps to applying theories from the securities literature to commodities markets and holding those...

Assessing Dodd-Frank

Fri, 26 Jun 2026 00:00:00 +0000

This is an edited transcript of the proceedings of the Yale Law School Center for the Study of Corporate Law’s Weil, Gotshal & Manges Roundtable on Assessing Dodd-Frank, which was held on April 1, 2011. The roundtable was jointly sponsored with the Yale Law & Business Society and Yale Journal on Regulation, and brought together policymakers, legal practitioners, members of the financial community, and academics from finance, economics and law to discuss the principal legislative response to the financial crisis.

The roundtable consisted of four panel sessions. The first session, “Overview,” was introduced by Robert Post, Dean and Sol & Lillian Goldman Professor of Law, Yale Law School. Panelists were Viral V. Acharya, Professor of Finance, New York University Stern School of Business; John Geanakoplos, James Tobin Professor of Economics, Yale University; Gary B. Gorton, Frederick Frank Class of 1954 Professor of Management and Finance, Yale School of Management;...

The Failure of Mixed Motives Jurisprudence

Fri, 26 Jun 2026 00:00:00 +0000

Because legal determinations often turn on motive, and motives are often complex, courts must decide what to do about mixed motives. For example, a boss might fire someone both for lawful reasons relating to job performance and also because of illegal prejudice. Increasingly, courts evaluate such cases under a “But-For standard,” which finds for the plaintiff only if the defendant would have acted differently but for the bad motive. Put another way, the defendant loses unless the bad motive made some kind of causal difference in outcomes. While this approach is intuitive, I argue that the But-For standard is problematic. The widespread acceptance of the But-For standard is the most important failure in our jurisprudence of mixed motives

The Enduring Distinction Between Business Entities and Security Interests

Fri, 26 Jun 2026 00:00:00 +0000

What are business entities for? What are security interests for? The prevailing answer in legal scholarship is that both bodies of law exist to partition assets for the benefit of designated creditors. But if both bodies of law partition assets, then what distinguishes them? In fact, these bodies of law appear to be converging as increasing flexibility irons out any differences. Indeed, many legal products, such as securitization vehicles, insurance products known as captive insurance, and mutual funds, employ entities to create distinct asset pools. Moreover, recent legal innovations, such as “protected cells,” which were created to facilitate such products, further blur the boundaries between security interests and entities, suggesting that convergence has already arrived.This Article identifies and defends a central distinction between business entities and security interest. We argue that while both bodies of law support asset partitioning, they do so with different priority...

Benchmark Manipulation

Fri, 26 Jun 2026 00:00:00 +0000

Substantial scholarship has questioned whether market manipulation is impossible and regulation unnecessary. This Article challenges orthodox understandings of manipulation, showing that they reflect an obsolete view of markets. While manipulation skeptics discuss prices, markets focus on benchmarks of price – and so do the manipulators who prey upon them. Benchmarks such as Libor or the S&P 500 summarize market prices, and they have become essential to contemporary markets. They are written directly into industrial contracts, financial derivatives, statues, and regulations, and so their accuracy affects the economy every bit as much as the prices themselves. They are also are much easier to manipulate than underlying prices, because such benchmarks are typically derived from only a small slice of the market. For example benchmarks of exchange rates – the price of Euros and Yen – reflect only trade prices in a single venue, during a two-minute period of trading. If a manipulator...

The Systems Approach to Teaching Business Associations

Thu, 25 Jun 2026 00:00:00 +0000

The systems approach is an application of systems analysis to law. Over the past twenty-five years it has proven highly successful in both teaching and legal scholarship. This Article explains the authors’ application of the systems approach in a new casebook, Business Associations: A Systems Approach (forthcoming, Wolters Kluwer 2020).The systems approach is designed to directly prepare students for the practice of law. It does so by providing students with the information lawyers use to solve clients’ problems and asking the students to solve the problems of hypothetical clients in realistic settings. The approach differs from traditional casebooks in four principal respects. First, it provides information as simply and directly as possible instead of asking students to ferret it out or infer it from cases. Second, it explains the law in the context of the physical systems in which law is employed, including law offices, board rooms, courtrooms, legal documentation, and online...

Mixed Motives Insider Trading

Thu, 25 Jun 2026 00:00:00 +0000

If you trade securities on the basis of careful research, then you are a brilliant and shrewd investor. If you trade on the basis of a hot tip from your brother-in-law, an investment banker, then you are a criminal. What if you trade for both reasons?There is no single answer, thanks to a three-way circuit split. Some courts would forgive you according to your lawful trading motives, some would convict you in keeping with your bad motives, and some would hand the issue to the jury. Sometimes called the “awareness/use” debate or the “possession/use” debate, the proper treatment of mixed motive traders has occupied dozens of law review articles over the last thirty years.This Article demonstrates that courts and scholars have so far followed the wrong reasons to the wrong answers. Instead, this Article takes trader motives seriously, drawing on insights and solutions from the broader jurisprudence of mixed motive. This analysis generates a new legal test and demonstrates the test’s...

Changing Guards: Improving Corporate Governance with D&O Insurer Rotations

Thu, 25 Jun 2026 00:00:00 +0000

Almost all public companies buy insurance for their directors and officers. D&O insurers should be active gatekeepers for the corporation, since they lose money if executives misbehave, but all available evidence suggests the opposite: insurers protect executives from liability for bad management and they encourage wasteful settlement of even meritless lawsuits. This Article diagnoses the failure of D&O insurance as a form of pernicious relational contracting. Insurers ignore even the worst corporate governance because they can recoup losses in the years to come. This recognition unlocks a potential solution: mandatory rotation. If insurers had only a few years to recoup any losses, they would seek to limit those losses by serving as an active gatekeeper.

Petition for Rulemaking on Short and Distort

Thu, 25 Jun 2026 00:00:00 +0000

Today, some hedge funds attack public companies for the sole purpose of inducing a short-lived panic which they can exploit for profit. This sort of market manipulation harms average investors who entrust financial markets with their retirement savings. While short selling serves a critical function in the capital markets, some short sellers disseminate negative opinion about a company, inducing a panic and sharp decline in the stock price, and rapidly close that position for a profit prior to the price partially or fully rebounding. We urge the SEC to enact two rules which will discourage manipulative short selling. The petition for rule-making on short and distort has been jointly signed by twelve securities law professors nationwide.

Insider Trading Against the Corporation

Wed, 24 Jun 2026 00:00:00 +0000

Insider Trading Against the Corporation

Introduction

Wed, 24 Jun 2026 00:00:00 +0000

This manuscript is the first chapter from a law school casebook in the Aspen Casebook Series. The casebook, Business Associations: A Systems Approach, is scheduled for publication on September 15, 2020. The book is grounded in the understanding that corporations, partnerships, LLCs, and limited partnerships are fundamentally the same. That is, with only minor exceptions, all can serve the same purposes, and each requires performance of essentially the same functions. Entity laws contain few rules that cannot be changed by provisions in the entities’ fundamental documents.As a result, “entity” is the book’s principal concept. The book is organized by the functions performed in each entity: financing; limiting liability; investor decision making; manager decision making; investor litigation; investment transfer; and entity merging, splitting, converting, and changing jurisdictions. (The book also covers the role of entities in society.). As each function is discussed, the differences...

Insider Giving

Tue, 23 Jun 2026 00:00:00 +0000

Corporate insiders can avoid losses if they dispose of their stock while in possession of material, non-public information. One means of disposal, selling the stock, is illegal and subject to prompt mandatory reporting. A second strategy is almost as effective and it faces lax reporting requirements and enforcement. That second method is to donate the stock to a charity and take a charitable tax deduction at the inflated stock price. “Insider giving” is a potent substitute for insider trading. We show that insider giving is far more widespread than previously believed. In particular, we show that it is not limited to officers and directors. Large investors appear to regularly receive material non-public information and use it to avoid losses. Using a vast dataset of essentially all transactions in public company stock since 1986, we find consistent and economically significant evidence that these shareholders’ impeccable timing likely reflects information leakage. We also document...

Insider Trading Against the Corporation

Thu, 18 Jun 2026 00:00:00 +0000

Insider Trading Against the Corporation

Deconstructing the Senior Creditor

Fri, 5 Jun 2026 00:00:00 +0000

Deconstructing the Senior Creditor

Sharing Where Bargains are Impossible

Fri, 5 Jun 2026 00:00:00 +0000

Sharing Where Bargains are Impossible

A Theory of the REIT

Fri, 5 Jun 2026 00:00:00 +0000

A Theory of the REIT

Incorporating Responsibility

Fri, 5 Jun 2026 00:00:00 +0000

Incorporating Responsibility

Majority Rules

Fri, 5 Jun 2026 00:00:00 +0000

Majority Rules

The Corporate Census

Tue, 2 Jun 2026 00:00:00 +0000

The Corporate Census

Insider Trading by Other Means

Tue, 2 Jun 2026 00:00:00 +0000

Insider Trading by Other Means

Board-Centric Contractarianism

Mon, 1 Jun 2026 00:00:00 +0000

Board-Centric Contractarianism

Generalist Courts and Controlling Shareholders

Mon, 1 Jun 2026 00:00:00 +0000

Generalist Courts and Controlling Shareholders

Letter of Comment re Proposed Amendments to Exchange Act Rules 13a-13 and 15d-13—Optional Semi-annual Reporting in Lieu of Quarterly Reports on Form 10-Q

Mon, 1 Jun 2026 00:00:00 +0000

Letter of Comment re Proposed Amendments to Exchange Act Rules 13a-13 and 15d-13—Optional Semi-annual Reporting in Lieu of Quarterly Reports on Form 10-Q

Will Public Benefit Companies Commit Securities Fraud?

Mon, 1 Jun 2026 00:00:00 +0000

Will Public Benefit Companies Commit Securities Fraud?

High Rates and Low Taxes

Mon, 1 Jun 2026 00:00:00 +0000

High Rates and Low Taxes

Lessons from Three Global Collective Action Problems

Mon, 1 Jun 2026 00:00:00 +0000

Lessons from Three Global Collective Action Problems

Who Bears the Burden of Climate Inaction?

Mon, 1 Jun 2026 00:00:00 +0000

Who Bears the Burden of Climate Inaction?

Crypto Associations

Mon, 1 Jun 2026 00:00:00 +0000

Crypto Associations

The Law and Economics of An Act to Encourage Privateering Associations

Mon, 1 Jun 2026 00:00:00 +0000

The Law and Economics of An Act to Encourage Privateering Associations

Delaware Senate Bill 21: A Comprehensive Analysis and Proposals for Improvements

Mon, 1 Jun 2026 00:00:00 +0000

Delaware Senate Bill 21: A Comprehensive Analysis and Proposals for Improvements

Effecting Industrial Policy Via General Incorporation: Encouraging Privateering as a Case Study

Mon, 1 Jun 2026 00:00:00 +0000

Effecting Industrial Policy Via General Incorporation: Encouraging Privateering as a Case Study

The Global Effects of Carbon Border Adjustment Mechanisms

Mon, 1 Jun 2026 00:00:00 +0000

The Global Effects of Carbon Border Adjustment Mechanisms

ESG Misrepresentations and Bond Investors

Mon, 1 Jun 2026 00:00:00 +0000

ESG Misrepresentations and Bond Investors

Insider Trading and Position Limits

Mon, 1 Jun 2026 00:00:00 +0000

Insider Trading and Position Limits

A Course Correction for Controlling Shareholder Transactions

Tue, 17 Dec 2024 00:00:00 +0000

A Course Correction for Controlling Shareholder Transactions

Securities Regulation and Big Business

Tue, 17 Dec 2024 00:00:00 +0000

Securities Regulation and Big Business

DExit Drivers: Is Delaware’s Dominance Threatened

Tue, 17 Dec 2024 00:00:00 +0000

DExit Drivers: Is Delaware’s Dominance Threatened

Chapter 11 at the School of Subchapter V: Part II

Tue, 17 Dec 2024 00:00:00 +0000

Chapter 11 at the School of Subchapter V: Part II

Chapter 11 at the School of Subchapter V: Part I

Tue, 17 Dec 2024 00:00:00 +0000

Chapter 11 at the School of Subchapter V: Part I

The SEC as an Entrepreneurial Enforcer

Tue, 17 Dec 2024 00:00:00 +0000

The SEC as an Entrepreneurial Enforcer

Board Control of a Charity’s Subsidiaries: The Saga of OpenAI

Mon, 16 Dec 2024 00:00:00 +0000

Board Control of a Charity’s Subsidiaries: The Saga of OpenAI

Climate Policy Reform Options in 2025

Mon, 16 Dec 2024 00:00:00 +0000

Climate Policy Reform Options in 2025

Ambulance diversions following public hospital emergency department closures

Sat, 27 May 2023 00:00:00 +0000

OBJECTIVE: To examine whether hospitals are more likely to temporarily close their emergency departments (EDs) to ambulances (through ambulance diversions) if neighboring diverting hospitals are public vs private. DATA SOURCES/STUDY SETTING: Ambulance diversion logs for California hospitals, discharge data, and hospital characteristics data from California's Office of Statewide Health Planning and Development and the American Hospital Association (2007). STUDY DESIGN: We match public and private (nonprofit or for-profit) hospitals by distance and size. We use random-effects models examining diversion probability and timing of private hospitals following diversions by neighboring public vs matched private hospitals. DATA COLLECTION/EXTRACTION METHODS: N/A. PRINCIPAL FINDINGS: Hospitals are 3.6 percent more likely to declare diversions if neighboring diverting hospitals are public vs private (P < 0.001). Hospitals declaring diversions have lower ED occupancy (P < 0.001)...

Do We Need a Restatement of the Law of Corporate Governance?

Thu, 7 Jul 2022 00:00:00 +0000

: The American Law Institute (ALI) has embarked on a Restatement of the Law of Corporate Governance. As with all Restatements, the purpose of the Restatement of corporate law is to clarify “the underlying principles of the common law” that have “become obscured by the ever-growing mass of decisions in the many different jurisdictions, state and federal, within the United States.” Corporate law, however, does not suffer from such problems. In a majority of states, the Model Business Corporation Act provides detailed statutory guidance as to which common law functions, at most, interstitially. In addition, corporate law is virtually unique in being dominated by the law of a single jurisdiction; namely, Delaware. Given the prominence of Delaware law in this field, a Restatement of corporate law is unlikely to be influential.

Christianity and Corporate Purpose

Tue, 18 Feb 2020 00:00:00 +0000

Christianity and Corporate Purpose

Bob Cochran on Law and Lawyering: A Catholic Perspective

Tue, 17 Sep 2019 00:00:00 +0000

Bob Cochran on Law and Lawyering: A Catholic Perspective

Enhanced Accountability: The Catholic Church’s Unfinished Business

Tue, 17 Sep 2019 00:00:00 +0000

Enhanced Accountability: The Catholic Church’s Unfinished Business

Corporate Purpose in a Populist Era

Tue, 16 Apr 2019 00:00:00 +0000

Corporate Purpose in a Populist Era

Insider Trading Compliance Programs

Wed, 6 Mar 2019 00:00:00 +0000

Insider Trading Compliance Programs

The Law and Economics of Insider Trading 2.0

Wed, 6 Mar 2019 00:00:00 +0000

The Law and Economics of Insider Trading 2.0

Rethinking the Board of Directors: Getting Outside the Box

Wed, 6 Mar 2019 00:00:00 +0000

Rethinking the Board of Directors: Getting Outside the Box

Restoring Confidence in the Roman Catholic Church: Corporate Governance Analogies

Wed, 24 Oct 2018 00:00:00 +0000

Restoring Confidence in the Roman Catholic Church: Corporate Governance Analogies

Book Review Essay: Conservatives Against Capitalism: From the Industrial Revolution to Globalization by Peter Kolozi

Tue, 28 Aug 2018 00:00:00 +0000

Book Review Essay: Conservatives Against Capitalism: From the Industrial Revolution to Globalization by Peter Kolozi

The Complete Guide to Sarbanes-Oxley

Thu, 12 Apr 2018 00:00:00 +0000

The Complete Guide to Sarbanes-Oxley

Manne on Insider Trading

Thu, 12 Apr 2018 00:00:00 +0000

Manne on Insider Trading

Remarks on Say on Pay: An Unjustified Incursion on Director Authority

Thu, 12 Apr 2018 00:00:00 +0000

Remarks on Say on Pay: An Unjustified Incursion on Director Authority

Insider Trading: An Overview

Thu, 12 Apr 2018 00:00:00 +0000

Insider Trading: An Overview

The Iconic Insider Trading Cases

Thu, 12 Apr 2018 00:00:00 +0000

The Iconic Insider Trading Cases

Equal Access to Information: The Fraud at the Heart of Texas Gulf Sulphur

Tue, 10 Apr 2018 00:00:00 +0000

Equal Access to Information: The Fraud at the Heart of Texas Gulf Sulphur

Kokesh Footnote 3 Notwithstanding: The Future of the Disgorgement Penalty in SEC Cases

Tue, 10 Apr 2018 00:00:00 +0000

Kokesh Footnote 3 Notwithstanding: The Future of the Disgorgement Penalty in SEC Cases

The Bishop's Alter Ego: Enterprise Liability and the Catholic Priest Sex Abuse Scandal

Mon, 17 Jul 2017 00:00:00 +0000

The Bishop's Alter Ego: Enterprise Liability and the Catholic Priest Sex Abuse Scandal

The Politics of Corporate Governance: Roe's Strong Managers, Weak Owners

Mon, 17 Jul 2017 00:00:00 +0000

The Politics of Corporate Governance: Roe's Strong Managers, Weak Owners

Exclusive Merger Agreements and Lock-ups in Negotiated Corporate Acquisitions

Mon, 17 Jul 2017 00:00:00 +0000

Exclusive Merger Agreements and Lock-ups in Negotiated Corporate Acquisitions

Securities Act Section 12 (2) After the Gustafson Debacle

Mon, 17 Jul 2017 00:00:00 +0000

Securities Act Section 12 (2) After the Gustafson Debacle

Much Ado about Little? Directors' Fiduciary Duties in the Vicinity of Insolvency

Mon, 17 Jul 2017 00:00:00 +0000

Much Ado about Little? Directors' Fiduciary Duties in the Vicinity of Insolvency

BOARDS-R-US: RECONCEPTUALIZING CORPORATE BOARDS

Thu, 4 May 2017 00:00:00 +0000

BOARDS-R-US: RECONCEPTUALIZING CORPORATE BOARDS

Preserving Director Primacy by Managing Shareholder Interventions

Thu, 4 May 2017 00:00:00 +0000

Preserving Director Primacy by Managing Shareholder Interventions

The Parable of the Talents

Tue, 11 Apr 2017 00:00:00 +0000

On its surface, Jesus’ Parable of the Talents is a simple story with four key plot elements: (1) A master is leaving on a long trip and entrusts substantial assets to three servants to manage during his absence. (2) Two of the servants invested the assets profitably, earning substantial returns, but a third servant — frightened of his master’s reputation as a hard taskmaster — put the money away for safekeeping and failed even to earn interest on it. (3) The master returns and demands an accounting from the servants. (4) The two servants who invested wisely were rewarded, but the servant who failed to do so is punished. Neither the master nor any of the servants make any appeal to legal standards, but it seems improbable that there was no background set of rules against which the story plays out. To the legal mind, the Parable thus raises some interesting questions: What was the relationship between the master and the servant? What were the servants’ duties? How do the likely...

Fee Shifting: Delaware's Self-Inflicted Wound

Tue, 11 Apr 2017 00:00:00 +0000

In a 2014 opinion (ATP Tour, Inc. v. Deutscher Tennis Bund), the Delaware Supreme Court upheld a fee-shifting bylaw, which required unsuccessful shareholder litigants in either derivative or direct actions to reimburse the corporation for its legal expenses. Although the entity in question was a non-profit, non-stock corporation, most observers expected the Delaware courts to extend that holding to for-profit stock corporations. In the months that followed, about 50 Delaware corporations adopted such bylaws. In its 2015 legislative session, however, the Delaware legislature adopted amendments to the Delaware General Corporation Law (S.B. 75) that effectively bans such bylaws. This article argues that this ban is contrary to sound public policy and adverse to Delaware’s own interests. It then advances an interest group analysis, focusing on the power of the Delaware bar, to explain why the Delaware legislature would have inflicted such a serious wound on itself. This analysis...

Interest Group Analysis of Delaware Law: The Corporate Opportunity Doctrine as Case Study

Tue, 11 Apr 2017 00:00:00 +0000

Interest Group Analysis of Delaware Law: The Corporate Opportunity Doctrine as Case Study

REVITALIZING SEC RULE 14a-8'S ORDINARY BUSINESS EXCLUSION: PREVENTING SHAREHOLDER MICROMANAGEMENT BY PROPOSAL

Tue, 11 Apr 2017 00:00:00 +0000

REVITALIZING SEC RULE 14a-8'S ORDINARY BUSINESS EXCLUSION: PREVENTING SHAREHOLDER MICROMANAGEMENT BY PROPOSAL

Corporate Directors in the United Kingdom

Fri, 17 Mar 2017 00:00:00 +0000

Abstract: In the United States, state corporation law uniformly provides that only natural persons may serve as directors of corporations. Corporations, limited liability companies, and other entities otherwise recognized in the law as legal persons are prohibited from so serving. In contrast, the United Kingdom allowed legal entities to serve as directors of a company. In 2015, however, legislation came into force adopting a general prohibition of these so-called corporate directors, albeit while contemplating some exemptions. This article argues that there are legitimate reasons companies may wish to appoint corporate directors. It also argues that the transparency and accountability concerns that motivated the legislation are overstated. The requisite enhancement of transparency and accountability can be achieved without a sweeping ban. Accordingly, this article proposes that Parliament either repeal the ban or,...

Director versus Shareholder Primacy in New Zealand Company Law as Compared to U.S.A. Corporate Law

Tue, 20 Dec 2016 00:00:00 +0000

Any model of corporate governance must answer two basic sets of questions: (1) Who decides? In other words, when push comes to shove, who has ultimate control? (2) Whose interests prevail? When the ultimate decision maker is presented with a zero sum game, in which it must prefer the interests of one constituency class over those of all others, whose interests prevail? On the means question, prior scholarship has almost uniformly favored either shareholder primacy or managerialism. On the ends question, prior scholarship has tended to favor either shareholder primacy or various stakeholder theories. In contrast, this author has proposed a “director primacy” model in which the board of directors is the ultimate decision maker but is required to evaluate decisions using shareholder wealth maximization as the governing normative rule. Shareholder primacy is widely assumed to be a defining characteristic of New Zealand company law. In assessing that assumption, it is essential to...

Comments on the HHS' Flawed Post-Hobby Lobby Rules

Tue, 20 Dec 2016 00:00:00 +0000

In late August 2014, after suffering a defeat in the Supreme Court Hobby Lobby decision when the Court held that business corporations are "persons" that can "exercise religion," the Department of Health and Human Services ("HHS") proposed new rules defining "eligible organizations." Purportedly designed to accommodate the Hobby Lobby ruling, the proposed rules do not comport with the reasoning of that important decision and they unjustifiably seek to permit only a small group of business corporations to be exempt from providing contraceptive coverage on religious grounds. This comment letter to the HHS about its proposed rules makes several theoretical and practical points about the Hobby Lobby holding and how the proposed rules fail to reflect the Court’s reasoning. The letter also addresses other approaches to avoid in the rulemaking process and argues for rules that, unlike what the HHS has proposed, align with the Supreme Court’s reasoning while being consonant with generally...

Revitalizing SEC Rule 14a-8's Ordinary Business Exemption: Preventing Shareholder Micromanagement by Proposal

Tue, 20 Dec 2016 00:00:00 +0000

Who decides what products a company should sell, what prices it should charge, and so on? Is it the board of directors, the top management team, or the shareholders? In large corporations, of course, the answer is the top management team operating under the supervision of the board. As for the shareholders, they traditionally have had no role in these sort of operational decisions. In recent years, however, shareholders have increasingly used SEC Exchange Act Rule 14a-8 (the so-called shareholder proposal rule), to not just manage but even micromanage corporate decisions.

The rule permits a qualifying shareholder of a public corporation registered with the SEC to force the company to include a resolution and supporting statement in the company’s proxy materials for its annual meeting. In theory, Rule 14a-8 contains limits on shareholder micro-management. The rule permits management to exclude proposals on a number of both technical and substantive bases, of which the...

Preserving Director Primacy by Managing Shareholder Interventions

Tue, 20 Dec 2016 00:00:00 +0000

This is a draft chapter for a forthcoming research handbook on shareholder power and activism. This chapter provides an analysis of shareholder activism based on the so-called director primacy model of corporate governance, which argues for a board-centric, rather than a shareholder-centric, understanding of corporate governance.Even though the primacy of the board of director primacy is deeply embedded in state corporate law, shareholder activism nevertheless has become an increasingly important feature of corporate governance in the United States. The financial crisis of 2008 and the ascendancy of the Democratic Party in Washington created an environment in which activists were able to considerably advance their agenda via the political process. At the same time, changes in managerial compensation, shareholder concentration, and board composition, outlook, and ideology, have also empowered activist shareholders.There are strong normative arguments for disempowering shareholders...

Corporate Social Responsibility in the Night Watchman State: A Comment on Strine & Walker

Tue, 20 Dec 2016 00:00:00 +0000

Delaware Supreme Court Chief Justice Leo Strine and Nicholas Walter have recently published an article arguing that the U.S. Supreme Court’s decision in Citizens United v. FEC undermines a school of thought they call “conservative corporate law theory.” They argue that conservative corporate law theory justifies shareholder primacy on grounds that government regulation is a superior constraint on the externalities caused by corporate conduct than social responsibility norms. Because Citizens United purportedly has unleashed a torrent of corporate political campaign contributions intended to undermine regulations, they argue that the decision undermines the viability of conservative corporate law theory. As a result, they contend, Citizens United “logically supports the proposition that a corporation’s governing board must be free to think like any other citizen and put a value on things like the quality of the environment, the elimination of poverty, the alleviation of suffering...

Multiple Claims, Ivanhoe and Substantive Consolidation

Mon, 19 Dec 2016 00:00:00 +0000

The Supreme Court's 1935 Ivanhoe decision created the specter of undue multiplication of claims, particularly in bankruptcies that involve large business enterprises conducted through many separate legal entities. Ivanhoe should be overruled on its own facts, but even if it is not, its extension to other situations is indefensible. Until overruled, Ivanhoe is properly limited to creditors secured by nondebtor collateral, foreclosure of which does not give rise to reimbursement or subrogation claims against the bankruptcy estate. While even in that case Ivanhoe overcompensates the creditor, such cases are rare and do not entail large-scale multiplication of claims against bankruptcy estates. If Ivanhoe is so limited, co-debtor liability among insolvent estates can be dealt with through a form of marshaling described in this Article. Otherwise, the practical second-best solution to the multiple claims problem is likely to remain liberal...

Textualism's Failures: A Study of Overruled Bankruptcy Decisions

Mon, 19 Dec 2016 00:00:00 +0000

This Article presents new empirical evidence bearing on the efficacy of textualism as a method of statutory interpretation. The data set consists of all bankruptcy decisions superseded by amendments to the Bankruptcy Code 1978-1998 (N=58), but the results have meaningful implications for theory and practice in interpreting statutes outside the bankruptcy field as well. Analysis of the bankruptcy decisions indicates that the cases subsequently overruled by statute are much more likely to adopt textualist methods of interpretation (p<.001) than randomly selected cases. If rational and efficient development and administration of complex statutory schemes in a manner consistent with democratically selected policies is the primary goal of interpretation, this evidence supports judicial reconsideration of textualism and should reinforce pragmatists' commitment to pragmatic interpretation. Analysis of legislatively overruled bankruptcy decisions also lends insight into other variables...

Creditors' Committees as Estate Representatives in Bankruptcy Litigation

Mon, 19 Dec 2016 00:00:00 +0000

This article defends the longstanding practice of the bankruptcy courts authorizing Creditors' Committees to prosecute specified causes of action on behalf of Chapter 11 bankruptcy estates in particular circumstances against theoretical criticisms of that practice that have emerged in the wake of the decisions in Hartford Underwriters Ins. Co. v. Union Planters Bank, 530 U.S. 1 (2000) and Official Committee of Unsecured Creditors of Cybergenics Corp. v. Chinery, 330 F.3d 548 (3d Cir. en banc 2003).

Recalibrating Consent in Bankruptcy

Tue, 13 Dec 2016 00:00:00 +0000

In bankruptcy, business realities collide with legal rules that themselves create conflicting rights. Unsurprisingly, accommodations are made. Consent bridges gaps among conflicting legal rules and business realities, justifying pragmatic solutions to problems that could not otherwise be imposed under prevailing legal rules. Consent’s transformative power is so essential to the bankruptcy process, that resort to consent, in principle and in rhetoric, is reflexive in bankruptcy. Manufacturing consent to support practical accommodations, rather than simply mirroring prebankruptcy entitlements, is at the heart of bankruptcy law as it has evolved in the United States. Bankruptcy uses a panoply of tools to generate consent: inertia, ambiguity, proxies, relaxed standards for establishing consent, novel procedures and institutional structures, and new substantive rights. New circumstances in the twenty-first century, and the teachings of experience, require close reexamination of how...

Opinions First - Argument Afterwards

Tue, 13 Dec 2016 00:00:00 +0000

For twenty-five years, the California Supreme Court has operated under a bizarre internal operating procedure that requires majority opinions to be written and agreed to prior to oral argument. This procedure squanders and demeans the parties’ formal opportunity for appellate argument, is inconsistent with traditional common law appellate process, and violates the state and federal Constitutions.

No Conflict

Tue, 13 Dec 2016 00:00:00 +0000

For thirty years, American lawyers have labored under an onerous dis-qualification rule precluding them from being “directly adverse” to a client in a matter unrelated to that on which the client has engaged the lawyer. The rule is ahistorical, idiosyncratic, and has led to anomalous and untoward consequences. It derives from a misconception of the lawyer’s role and duty. It should be abrogated.