Excerpt:
"In an effort to encourage companies to access public markets, the Securities and Exchange Commission adopted a new rule that allows all organizations interested in potentially going public to assess market interest in an initial public offering or other registered securities by having discussions, or “testing the waters,” with certain institutional investors. The “Solicitations of Interest Prior to a Registered Public Offering” rule, published in the Federal Register on Oct. 4, becomes effective Dec. 3. "
Summary:
This Article examines the effect of investor attention on value losses and long-term value due to securities class action lawsuits and fraud discovery. The Article finds that investor attention influences the magnitude of value losses suffered upon lawsuit filing and that lawsuit filing has no effect on the long-term value for the group of firms where investor attention is low.
Summary:
This Article opines that for the Leidos case, the U.S. Supreme court's ruling will make little difference for the prevailing or losing party. The Article also examines the potential for pure omission liability arising from the Sarbanes-Oxley Section 906 certification.
Summary:
This Article examines the different gatekeepers for different types of shareholder litigation - institutional investors for securities class actions, corporate boards for derivative suits, judges in their review of settlements for merger cases, etc. The Article explores why corporate law has chosen different gatekeepers for different types of shareholder litigation and argues that the legal system should look for ways to use a greater mix of gatekeepers in these cases.
Summary:
This Article analyzes the potential reasons why corporate counsels keep silent in the face of potential wrongdoing in their own firms. In spite of their legally-mandated central role to prevent fraud, corporate counsels typically do not appear to discover any corporate wrongdoing. The Article proposes policy recommendations to better protect shareholders' interests against self-dealing by top management.
Summary:
This Article argues the strong presumption against extraterritorial application of federal securities laws, as articulated in Morrison v. National Australia Bank, has significant implications for liability under Section 11 of the Securities Act. Morrison restricts federal securities law liability to purchases or sales "listed on domestic exchanges and domestic transactions in other securities." The Article finds that this limitation could, in some instances, dilute the incentive to engage in due diligence and have other consequences that the SEC could view as contrary to the public interest.
Summary:
This Article provides a general methodology to measure the market efficiency percentile for a stock for any relevant period, and calculates arbitrage risk for each U.S. exchange-listed common stock for every calendar year from 1988 to 2010. The Article finds that market efficiency is significantly affected by turnover (negatively), the number of market makers for Nasdaq stocks (negatively), and serial correlation in the market model of the stock (positively).
Summary:
This Article argues that the scope of recovery under the implied Section 10(b) private right should be no greater than the recovery available under the most analogous express remedy, Section 18(a), thus Section 10(b) plaintiffs must either demonstrate actual reliance as a precondition to recovery of damages, or the Supreme Court should revisit Basic, and overturn Basic's rebuttable presumption of reliance.
Summary:
This Article provides a general methodology to measure the market efficiency percentile for a stock for any relevant period, and calculates arbitrage risk for each U.S. exchange-listed common stock for every calendar year from 1988 to 2010. The Article finds that market efficiency is significantly affected by turnover (negatively), the number of market makers for Nasdaq stocks (negatively), and serial correlation in the market model of the stock (positively).
Summary:
This Article discusses the appeal (to be argued in October 2013) in which the Supreme Court will consider whether the Securities Litigation Uniform Standards Act of 1998 ("SLUSA") precludes investors' state law class actions against third-party actors, where the complaints alleged a scheme of fraudulent misrepresentation about transactions in connection with SLUSA covered securities. The defendants seek reversal of a Fifth Circuit decision that declined to apply SLUSA's preclusion provision, which essentially permitted the litigation against the defendants to proceed in federal court.
Summary:
This Article examines which independent directors are held accountable when investors sue firms for financial and disclosure related fraud, and finds that shareholders use litigation along with director elections and director retention to hold some independent directors more accountable than others when firms experience financial fraud.
Summary:
This Article identifies the central flaw of Basic that has over the decades distorted applications of fraud on the market but also suggests, building on Amgen, what the future focus should be in considering whether a suit can proceed as a class action based on fraud on the market.
Summary:
This Article examines who pays when a company settles, and finds that D&O insurance is quite protective and that individual officers rarely contribute to settlements, even in cases in which the SEC has imposed a serious penalty on the same individuals for the same misconduct.
Summary:
This Article provides commentary and analysis of the Supreme Court's February and March 2013, decisions in three major class action appeals: Amgen Inc. v. Connecticut Retirement Plan and Trust Funds (February 27, 2103); Standard Fire Ins. Co. v. Knowles (March 19, 2013), and Comcast Corp. v. Behrends (March 27, 2013).
Summary:
This Article provides some basic statistics on the timing of dismissals and settlements in securities class actions.
Summary:
This Article seeks to reconcile two seemingly conflicting definitions of a material fact: first, as one that would be important to a reasonable investor in deciding how to act in that it would change the total mix of information - although it need not necessarily change the ultimate decision of the investor as to how to vote or whether to trade, and second, as one that would affect market price - which clearly implies that it must have changed the decisions of some investors.
Summary:
This Article reviews the empirical literature evaluating the lead plaintiff provision of the Private Securities Litigation Reform Act, and concludes that, overall, the provision has markedly improved the conduct of these cases.
Summary:
Predicting Securities Fraud Settlements and Amounts: A Hierarchical Bayesian Model of Federal Securities Class Action Lawsuits
Summary:
This Article focuses on how courts have treated two types of carve-outs from federal jurisdiction under the Class Action Fairness Act of 2005 (CAFA): a mandatory carve-out, dealing with securities litigation, and a permissive carve-out, dealing with repetitive, duplicative class litigation.
Disclaimer
The views expressed in these articles are those of the authors, and do not necessarily reflect the views of the SCAC, Stanford University, Cornerstone Research , the authors' employers, or organizations affiliated with the authors.
