Civil liability of rating agencies has to strike a balance between over-deterrence and overly lax behavior control. The resulting problems of a capital market freeze and difficulties of proof, as they become apparent in most legal systems and the European Commission's Draft Proposal to amend the...

In contrast to financial arbitrage, which causes prices of economically equivalent transactions to converge in the direction of one price, regulatory arbitrage does not lead to such price convergence. In contrast, regulatory arbitrage tends to produce two different prices for economically...

Abstract: The key issue concerning shareholder transparency rules, and the related rules on acting in concert (Europe), or the voting group concept (U.S.) is enforcement. Rather than thinking about appropriate enforcement measures, jurisdictions such as the UK and Switzerland decided in favor of...

In the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Congress clarified that the insider trading regime of Rule 10b-5 applies to trading in credit default swaps. In so doing, Congress implicitly assumed without analysis that the equities securities markets and the credit...

Despite the significant attention that market manipulation has received in recent years many aspects of it are poorly understood. This article identifies from the theoretical and empirical literature what we do and do not know about market manipulation, and suggests directions for future...

When should laws be enforced by private actors and when should society rely on law enforcement by public authorities? This question has been analyzed in great detail in law & economics scholarship. This article surveys the literature and outlines a framework of criteria for deciding whether...

A deeply entrenched principle in the law of fraud and negligent misrepresentation provides that damages can be recovered only upon a showing of reliance. To prevail, plaintiffs must not only establish the mere falsity of a statement, but also show that they had acted upon the statement and...

In merger agreements, the seller makes contractual representations and warranties (“reps”) about the state of the target, e.g., attesting to the accuracy of the target’s financial statements. We obtain a proprietary sample of claims for breaches of the reps in acquisition agreements...

We examine the choice and the offer spreads between callable and non-callable bonds. We find significant differences by industry sector so our results are segmented by financial and non-financial industries. For the financial sector, the popularity of callable and non-callable bonds is...

The Trust Indenture Act prohibits a binding vote of bondholders to change any core term-principal amount, interest rate, or maturity date-of a bond issue. In this Article, I show how the prohibition on a collective action clause inhibits a troubled company's ability to reorganize outside of...