As a result of the current financial crisis, there have been many calls for strict new regulation of over-the-counter financial derivatives. This paper proposes, instead, that we return to the now-voided common law on derivatives and consider them non-legally enforceable gambling contracts...

Evidence is accumulating that in making investment decisions, many investors do not employ a 'rational expectations' approach in which they anticipate others' future behavior by analyzing their incentives and constraints. Rather, many investors rely on trust. Indeed, trust may be essential to a...

When credit markets froze up in the fall of 2008, many economists pronounced the crisis both inexplicable and unforeseeable. That's because they were economists, not lawyers. Lawyers who specialize in financial regulation, and especially the small cadre who specialize in derivatives regulation,...

Corporate law and scholarship generally assume that public corporations are controlled by professional managers, while shareholders play only a weak and passive role. As a result, corporate officers and directors are understood to be subject to extensive fiduciary duties, while shareholders...

Legal experts traditionally distinguish corporations from unincorporated business forms by focusing on such corporate characteristics as limited shareholder liability, centralized management, perpetual life, and freely transferred shares. While this approach has value, this essay argues that the...

In 1979 Martin Lipton published an essay arguing that corporate law gives directors and not shareholders the authority to decide whether a company should sell itself at a premium, and that this is a good arrangement for both shareholders and society. After years of vocal disagreement many...

Academics, reformers, and business leaders all yearn for a single, objective, easy-to-read measure of corporate performance that can be used to judge the quality of public corporation law and practice. This collective desire is so powerful that it has led many commentators to grab onto the first...

During the 1970s and early 1980s, the Efficient Capital Market Hypothesis (ECMH) became one of the most widely-accepted and influential ideas in finance economics. More recently, however, the idea of market efficiency has fallen into disrepute as a result of market events and growing empirical...