Informational asymmetries, misaligned incentives, and artificially elongated chains of intermediation have created a disconnect between the financial sector and the “real economy” that is detrimental to the public interest. Courts and regulators are increasingly intervening to break the...

I develop a continuous-time game between a population of investors and an intermediary whose type is private information and whose portfolio allocation is neither observable nor contractible. I define and characterize a sequential equilibrium of the game and solve for a Markovian equilibrium...