In this article, I address a serious problem with the approach to damages embodied in the Private Securities Litigation Reform Act (PSLRA) that artificially increases awards in securities fraud actions in down markets. Congress enacted PSLRA to limit frivolous lawsuits under the federal...

In We Have a Consensus on Fraud on the Market – And It's Wrong, James Spindler has attempted to defend securities fraud class actions (SFCAs) and the fraud-on-the-market (FOTM) doctrine by purporting to refute two arguments that have been cited by numerous scholars: (1) the circularity...

In this essay, I argue that the preeminence of Silicon Valley as an incubator of technology companies is attributable to equity compensation. Ronald Gilson, relying on the work of AnnaLee Saxenian and others who have noted the tendency of Silicon Valley employees to job hop, has suggested that...

In a typical securities fraud class action (SFCA) against a publicly traded company under SEC Rule 10b-5, the claim arises from an alleged cover-up of bad news by company agents. When the truth comes out, stock price drops, and fraud-period buyers sue to recover their losses. In most such cases,...

Stock options are the primary form of compensation for CEOs because they align the interests of CEOs with those of diversified stockholders. Nevertheless, critics argue that the use of options leads to excessive pay because there is no effective bargaining between the CEO and the board of...