Mutual fund companies routinely advertise the past returns of their strong-performing, actively-managed equity funds. These performance advertisements imply that the advertised high past returns are likely to continue. Indeed, investors flock to these funds despite high past returns being a poor...

"Say on pay" gives shareholders an advisory vote on a company's pay practices for its top executives. Beginning in 2011, Dodd-Frank mandated such votes at public companies. The first year of "say on pay" under the new legislation may have changed the dialogue and give-and-take in the...

Crowdfunding occupies a hybrid regulatory space. Directed to “public investors,” it receives an exemption from Securities Act registration similar to that available to “private issuers.” Critical to the success of this regulatory experiment, which has great potential and much risk, is...

Using voting data from the first year of “say on pay” votes under Dodd-Frank, we look at the patterns of shareholder voting in advisory votes on executive pay. Consistent with the more limited “say on pay” voting before Dodd-Frank, we find that shareholders in the first year under...

This paper questions the ascendance of U.S. private capital markets. Data on capital formation over the past decade (before the Panic of 2008) cast doubt on the story of capital users increasing their relative reliance on private capital. Further, the investment rules and culture) under which...

Drawn from a speech at the opening convocation at two notarial schools in Italy, this is a story of modern US corporate law. Unlike the statist nature of the corporation in many other countries, the nature of the US corporation is essentially private. It is based on state corporate law, chosen...

Federal regulation of securities offerings has become less mandatory. Over the last twenty years, Congress, the courts and the SEC have been rethinking the Securities Act of 1933 and its regulatory tenets of manager informational shirking and investor helplessness. No longer is the prototypical...

This essay — part of a Washington & Lee symposium on Corporate Law, Governance, and Purpose — advances a simple thesis: corporate governance is best seen not as a subset of economics or even law, but instead as a subset of moral psychology. Recent research in the nascent field of moral...

Mutual fund incubation is a process by which new funds are initially operated out of public view. The high-performing funds are then marketed to investors, and the low-performing funds are quietly terminated. This selection process is not revealed to investors, thus creating the illusion that...

The Investment Company Act of 1940 anticipated mutual fund boards would remedy a dysfunctional market of fund investors. Rather than the SEC, the fund board (and its independent members) would regulate the conflicts between fund investors and management firms by negotiating the management...