Professional Documents
Culture Documents
By
Harry Case Stansbury*
Chapter 1
SECURITIES INDUSTRY REGULATION
The industrial revolution started in the United States during the 19th century.1 Privately
owned corporations organized by authority of state law.2 As a result, competition soon developed
among some states to have corporation laws that were very favorable to the formation and operation
of a corporation.3 A state such as Delaware became popular for corporations because of a law
giving broad discretion to management.4
Laws did not initially exist in the United States to regulate the issuance of securities and
trading in the securities markets.5 The first such laws enacted were on the state level and not on the
federal level.6
Kansas enacted the first securities law in the United States in 1911.7 A number of states,
especially in the Midwest, then began to enact similar laws.8 The purpose of these state securities
laws, or Blue Sky Laws, was to regulate the Eastern promoters who were selling Midwesterners
securities of companies with very dubious assets.9 Constitutional challenges to these laws were
unsuccessful10 and most states then enacted securities laws.11
After the rampant stock market speculation of the 1920s,12 and the famous crash of 1929,13
the Roosevelt Administration proposed, as part of its New Deal legislation, securities regulation on
the federal level.14
The Securities Act of 193315 was the initial result. The administration of this Act vested in
the Federal Trade Commission.16 The Act required the registration of securities offered by
companies and provided for full disclosure to investors through a written prospectus.17
Further regulation of securities on the federal level resulted from the Securities Exchange
Act of 1934.18 This Act provided for the regulation of securities exchanges and the broker-dealers
who buy and sell securities.19 The Act also created the Securities and Exchange Commission to
administer the federal securities laws.20
The Public Utility Holding Company Act of 1937,21 the Trust Indenture Act of 1939,22 the
Investment Company Act of 1940,23 and the Investment Advisers Act of 194024 followed as federal
securities law became more comprehensive.
These six Acts provided the basis for the federal securities regulation that is still in effect
today. The Securities Investor Protection Act of 197025 provided certain federal protection to
accounts of investors held by brokerage houses. Chapter 11 of the Bankruptcy Code26 contains
provisions for the handling of public companies in bankruptcy.
In 1970, the American Law Institute and the American Bar Association undertook the
monumental task of drafting a Federal Securities Code to integrate the various pieces of previous
legislation into a comprehensive federal law.27
In 1980, after considerable efforts by a group of Consultants and Advisers, with Professor
Louis Loss of the Harvard Law School as Reporter, the final draft of the Federal Securities Code
was complete.28 However, Congress has yet to enact the Federal Securities Code.
The changes in technology and the Internet has created many opportunities in the area of
securities regulation, but also has created many problems, especially in opportunities for fraud. 29
As a result, the Securities and Exchange Commission has a section within the enforcement
division monitoring the Internet for fraud.30
The subprime crisis was very serious and caused a severe drop in stock prices. It
especially affected a number of large broker-dealer firms because the SEC had allowed lower
capital requirements to supposedly enhance international competition.
Stock exchanges have generally become for-profit entities owned by their members and
even the public. Many thought that the stock market crash during the subprime crisis was made
much more serious because short selling had become easier for traders.31 The decimalization of
stock prices made short selling easier. The up-tick requirement for a short sale had been
eliminated. So Regulation SHO was modified to provide an up-tick requirement in certain
situations as an attempt to stop perceived abuses in short sales.32
The SEC had adopted two rules concerning insider trading matters. Rule 10b5-1
concerned situations for planned stock sales.33 Rule 10b5-2 concerned persons who could be
considered recipients of misappropriated information for confidentiality purposes.34
Credit Default Swaps (CDSs) were a form of supposed protection for an investor buying
derivative instruments, such as Collateralized Mortgage Bonds (CMBs) or Collateralized
Mortgage Obligations (CMOs), in a transaction.35 The Commodity Futures Modernization Act
of 2000 had provided that CDSs were not securities or commodities by legal definition.36
As the subprime credit crisis unfolded, securities frauds that had been in existence for
years began to unravel. A massive securities fraud was uncovered in 2008 within an investment
fund managed by Bernard Madoff.37 Offshore banks had been the source of securities fraud for
many years. In 2009, a large securities fraud was uncovered involving an offshore bank
controlled by Allen Stanford.38
After the start of the subprime credit crunch, Congress enacted the Emergency Economic
Stabilization Act of 2008 to provide for the Federal Reserve Board and the United States
Treasury to have added authority to attempt to deal with problems that were occurring in the
stock markets.39 Congress then enacted the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010 to change many of the ways in which brokerage firms and banks
interacted in stock markets.40
Congress enacted the Jumpstart Our Business Startups Act of 2012 to attempt to facilitate
the raising of capital by small corporations.41 As required by this Act, the SEC has started to
change the requirements for private placement offerings and to allow Internet crowdfunding for
small corporate offerings.
Congress enacted the USA Patriot Act of 2001 to apply to all financial institutions,
including broker-dealers, in order to address possible money laundering.42 Now, broker-dealers
must take certain steps to try to find out if there is any suspicious activity that might involve
money laundering.
Chapter 2
DEFINITION OF SECURITY
The most prudent and practical position for entrepreneurs and corporate attorneys to take
is that which considers any type of capital raising instrument, be it equity, debt or otherwise, a
security.
In virtually all instances, corporate financing instruments offered and sold to investors
constitute securities.43 These include traditional items such as common stock, preferred stock
and bonds, as well as debentures, notes, certificates of indebtedness, options, warrants, puts,
calls, delayed delivery contracts and various investment contracts.44
However, despite this broad and oversimplified approach, it is important for the business
executive and his or her advisers, including legal, accounting and investment advisers, to
understand what constitutes a security, and the necessary elements which can cause an
instrument to become classified as such.45 The reason for the importance of this understanding
is due to the fact that a commercial transaction between corporations and various other business
entities, including general partnerships, joint ventures, limited partnerships or partnerships in
commendam, usually involve securities.46 This often comes as a surprise to corporate executives
who have participated in many such deals over the years without ever considering the
transactions as having involved securities.
Section 297(a) of the Federal Securities Code47 proposes to keep the broad definition of a
security as now contained in the Securities Act of 1933 and the Securities Exchange Act of 1934.
Investment banking firms often assist a corporation in structuring and even creating
securities for an offering in the current securities markets, including various derivative
instruments.48 The last two decades have witnessed a substantial increase in the offering of
many different securities products by investment banking firms due to the transfer of assets to
pools and the subsequent sale of participations to investors.49 The corporate clients of the
investment banking firms are constantly in need of additional capital.50
Many of these
corporations own various assets, such as loans, which are transferred to pools and then sold as
securities to investors.51 This process of creating pools of assets for sale to investors, often
called securitization, has resulted in making large amounts of capital available to many
corporations.52
REVES v. ERNST & YOUNG, 494 U.S. 56 (1990)
SEC v. EDWARDS, 540 U.S. 389 (2004)
Chapter 3
OFFERING OF SECURITIES
there is obviously not a Section 4(1-1/2) in the Securities Act of 1933.66 This was a procedure
whereby an investor who had held restricted securities for quite a while could sell such restricted
securities to a purchaser who would, in turn, agree to hold the securities indefinitely subject to
the same restrictions on resale.67 Such an investor would become a substitute investor, but would
then be subject to a very long additional time of holding the securities before even considering
any additional restricted resale.68
Investors who purchase restricted securities in an unregistered offering must hold the
securities until such time as the issuer might file for a registration with the Securities and
Exchange Commission and allow the investors to include the restricted securities in the
registration.69 Rule 14470 allows many of those investors to sell restricted securities pursuant to
an exemption from registration, provided a necessary holding period exists and subject to
limitations on the amount of the sales of securities within a given period of time.71
Rule 144A72 allows certain qualified institutional buyers to sell restricted securities
pursuant to an exemption from registration.
B. SECURITIES REGISTRATION
Companies often decide to offer securities to the general public in an initial public
offering.73 Prior to the offer or sale of securities to the general public, it is necessary for an issuer
to register with the Securities and Exchange Commission.74 This registration provides for the
protection of the investing public by requiring the issuer to give full disclosure to potential
investors.75
Section 501 of the Federal Securities Code76 proposes to make it unlawful for any person
in connection with a distribution to offer securities unless the issuer has filed an offering
statement, but does provide circumstances whereby a holder of a particular class of securities can
require the issuer to file such an offering statement.
An issuer of securities begins the process of registration with the Securities and Exchange
Commission by preparing and filing a registration statement, meeting the requirements as set
forth in Regulation C.77 The attorneys for the issuer have the responsibility of preparing this
registration statement.78 The registration statement will contain detailed and comprehensive
information on the issuer, including a prospectus, financial statements prepared by accountants,
and necessary exhibits.79
The process of going public entails selling and distributing the registered securities of the
issuer to many different investors in the general public.80
Most issuers will use a broker-dealer to sell the securities to a very widespread group of
individual investors.81 The usual goal of the going public process is to sell to as large a number
of investors as is feasible, with the investors located in as broad a geographic area as possible.82
This will result in a diverse group of investors with an interest in the issuer and name recognition
for the issuer.83 The issuer will then be a publicly held company with the likelihood that a
secondary market will develop in the securities sold.84
Certain SEC reporting companies, publicly held for a time, can file for a shelf
registration.85 This is a type of registration whereby a company will register securities for sale at
some as yet undetermined time.86 Once the shelf registration is effective, the company need only
notify the SEC and the offering can immediately commence.87 This type of offering can be
useful to a company when market conditions are extremely volatile and constantly changing. 88
Of course, the company and the broker-dealer or broker-dealers must continuously monitor
market conditions.89 This type of offering has significantly changed the relationship of some
companies and their broker-dealer or broker-dealers by increasing competition among the
investment banking firms.90
C. INVESTMENT BANKING
The history of investment banking in the United States is a long and illustrious one.91
Investment banking firms acted as catalysts in much of the conversion of the agricultural
economy of the early United States to the industrial economy of the modern age.92
Many large corporations sell common stock to the public through a firm commitment
underwriting.93 In this type of underwriting, a broker-dealer or a syndicate of several brokerdealers will actually purchase at an agreed upon discount all of the securities of the issuer as
soon as the registration becomes effective with the Securities and Exchange Commission. 94 The
broker-dealers then resell the securities to the public investors at the full offering price.95
Small corporations often must sell common stock to the public through a best efforts
underwriting.96 This is not an underwriting as such, but a process in which the broker-dealer or
broker-dealers act as agents of the issuer in selling the securities directly to the public investors
at the full offering price, charging an agreed upon commission to the issuer.97
There are variations to the best efforts underwriting. One variation is the all or none.98
Here, the broker-dealers agree with the issuer to sell all of the securities within a certain time
period or return all of the funds to the investors and no sales will take place.99 Another variation
is the part or none.100 Here, the broker-dealers agree with the issuer to sell a certain percentage of
the securities within a certain time period or return all of the funds to the investors and no sales
will take place.101 If the sale of securities timely reaches the necessary percentage, the offering of
the remaining securities may continue.102
Investment banking firms offer various products to investors. They were important in the
offering of tax shelters to investors during the 1970s and the early 1980s.103
Tax shelter offerings included real estate,104 oil and gas,105 cattle,106 mining,107 movies,108
and equipment leasing.109
One of the major factors in the tremendous proliferation of tax shelter offerings in the
1970s and the early 1980s was the entrance of the large investment banking firms into the
area.110 Early tax shelters consisted of offers made directly to wealthy individuals on a small,
private basis by the promoters and their affiliates.111 As the demand for tax shelter offerings
grew with the growth of the number of wealthy people needing them, the investment bankers
realized what an important segment of business tax shelters could become.112 The investment
bankers then started offering tax shelters in both public and private deals.113
Investment banking firms have also been important participants in the raising of venture
capital for new companies.114 Such venture capital usually originates with offerings to a few
sophisticated investors in private, directly negotiated deals.115
Certain investment banking firms have become extremely active in attempts to service
their investment banking clients, especially in the age of the hostile takeover or leveraged
buyout.116 Because these clients often need large amounts of cash very quickly, some firms have
provided bridge financing directly to the client company.117 The firm will then be repaid when
the company registers and sells a securities offering of debt in a conventional underwriting. 118
Although these bridge loans schedule repayment in a short amount of time, the investment
banking firms have their capital at a substantial risk during the interim.119
These same investment banking firms might take large equity positions in some of the
combined companies created by hostile takeovers or leveraged buyouts that places them in a
position of being merchant bankers.120 While merchant banking has long been traditional in
Europe,121 such activity does create additional risks to the capital of these investment banking
firms in the United States.122
On November 12, 1999, the President signed into law the Gramm-Leach-Bliley Act of
123
1999.
The Senate and the House of Representatives of Congress had previously passed this
legislation. The purpose of the legislation was to remove restrictions placed on banks and
securities firms during the New Deal. That legislation was the Glass-Steagall Act of 1933.124
The result of that legislation was to separate commercial banking from investment banking.
Sections 16, 20, 21, and 32 provided the restrictions.
Over the past several decades, various interpretations by government regulatory agencies
have gradually eroded the restrictions. Banks consequently have become more active in the
securities business. However, banks wanted the restrictions repealed for domestic and
international competitive reasons.
As a result, after a number of unsuccessful attempts in the past several sessions of
Congress, the Gramm-Leach-Bliley Act is now law. The Act repeals Sections 20 and 32 of the
Glass-Steagall Act. Banks will now have the ability to enter into many aspects of the securities
business and the insurance business. In addition, bank holding companies, securities firms, and
insurance companies will be able to combine operations. It is expected that the recent trend
toward consolidation of such companies by mergers and acquisitions into financial supermarkets
will continue at an increased pace.
During the late 1990s, there was a boom in the initial public offerings (IPOs) of Internet
companies.125 By the year 2000, most of these offerings had crashed. 126 Abuses took place in
the placement of some of this stock to persons favored by investment banking firms. SEC
Regulation M governs stock trading by brokerage firms. 127 A number of large brokerage firms
experienced substantial liquidity problems and were operating on very small capitalizations.
These lower capitalization levels were allowed by the SEC, the NASD, and its successor, the
Financial Industry Regulatory Authority (FINRA), over concerns about international competition
in the securities markets.128
SEC Regulation FD set forth a prohibition on selective disclosures to security analysts by
companies.129 A number of security analysts who were affiliated with investment banking firms
played an important role in securing Internet companies for IPOs by offering to give these
companies very favorable reports and the security analysts were compensated for this activity. 130
These arrangements were not disclosed to the investors participating in buying and selling these
companies.
Chapter 4
SECURITIES ACT LIABILITIES
An important basis for modern securities regulation is the requirement of providing full
disclosure to investors in the offer and sale of securities.131 Severe civil liabilities and criminal
penalties can result if a person does not provide such full disclosure to investors.132
Section 11 of the Securities Act provides a cause of action for fraud in the offering of
securities pursuant to a registration statement.133
Section 12(1) of the Securities Act provides a cause of action for the sale of unregistered
securities.134
PINTER v. DAHL, 486 U.S. 622 (1988)
Section 12(2) of the Securities Act provides a cause of action for fraud in the sale of
securities.135
Section 12(2) applies to sales of securities in a public offering.136
GUSTAFSON v. ALLOYD CO., INC., 513 U.S. 561 (1995)
Section 12(2) can result in damage awards without the allowance of certain offsets. 137
The United States Securities and Exchange Commission can bring an enforcement action
pursuant to Section 17(a) of the Securities Act for fraud in the sale of securities.138
AARON v. SEC, 446 U.S. 680 (1980)
Violations of Section 17(a) can result in criminal penalties as well.139
A private right of action is not available to investors pursuant to Section 17(a).140
Chapter 5
Chapter 6
TRADING MARKETS
A. STOCK EXCHANGES
The New York Stock Exchange has provided an area for trading stock for many years.157
Today, stock exchanges, such as the New York Stock Exchange158 and the American Stock
Exchange,159 register with the Securities and Exchange Commission.160 Trading takes place on
the trading floor of the stock exchange by specialists through an auction process.161
On May 1, 1975, May Day,162 members of the New York Stock Exchange could no
longer charge a fixed commission on all transactions, so such members began to negotiate
commissions.
On October 27, 1986, the day of the Big Bang,163 the London Stock Exchange eliminated
fixed commissions in favor of negotiated commissions as the New York Stock Exchange had on
May Day in 1975. The Big Bang in London, England, was important to stock purchasing since
the London Stock Exchange is one of the largest in the world. 164 The London Stock Exchange
and the Tokyo Stock Exchange in Japan contribute to what has become an almost 24 hour
trading day in stocks listed on those exchanges and in New York.165
The New York Stock Exchange had allowed member broker-dealers to become public
companies.166 Now, the New York Stock Exchange itself has become a public company, as has
many other stock exchanges in the world.167
There are also regional stock exchanges registered with the SEC and located in a number
of cities in the United States.168 Such cities as Philadelphia (Pa.), Chicago (Ill.), San Francisco
(Cal.), Detroit (Mich.), Cincinnati (Ohio), and Boston (Mass.) have regional stock exchanges.169
These regional exchanges often list shares of large national companies traded on other
exchanges.170 Such trading is possible through the composite tape and the consolidated
quotation system that are part of the national market system.171 The regional exchanges might
also list the shares of local companies not traded on any other exchanges. 172 Also, some
exchanges list and trade in options on shares of stock, called puts and calls.173 A put option174 is
an option to sell a given number of shares of stock at a set price within a certain time period. A
call option175 is an option to purchase a given number of shares of stock at a set price within a
certain time period.
SILVER v. NEW YORK STOCK EXCHANGE, 373 U.S. 341 (1963)
GORDON v. NEW YORK STOCK EXCHANGE, INC., 422 U.S. 659 (1975)
B. OVER-THE-COUNTER MARKET
The over-the-counter market consists of the trading in all other securities not traded on a
stock exchange.176 Such trading is done by broker-dealers who act as market makers and buy
and sell securities as principals with their own funds and by broker-dealers who act as agents
matching buyers and sellers in the market.177 Many of the larger companies have securities
Chapter 7
Chapter 8
BROKER-DEALER REGULATION
A. REGISTRATION
Persons who are in the business of buying and selling securities must register with the
Securities and Exchange Commission and meet the requirements of the SEC rules for the
continuing operation of a broker-dealer firm.201 The broker-dealer must also become a member
of a stock exchange registered with the SEC or a self-regulatory organization (SRO) registered
with the SEC, such as the National Association of Securities Dealers, now FINRA.202
Problems have existed for many years because a number of broker-dealer firms have
elected to specialize in the penny stock market.203 This penny stock market consists of stocks
that trade for pennies a share and do not have a listing on any stock exchange or on the
NASDAQ electronic market for over-the-counter trading.204 An investor might find price
quotations for the stocks, if at all, in the pink sheets.205 The pink sheets comprise a daily
publication distributed to broker-dealers.206 As a result, the investor has difficulty determining
the current bid and asked price of the stock in the over-the-counter market.207 Also, because of
the lack of information about volume and which market makers are active, large spreads can be
present between the bid and asked price.208
Problems with broker-dealer firms operating as boiler rooms or bucket shops have also
existed for a long time.209 A boiler room is a room containing many telephones where sales
agents spend most of their time calling potential investors.210 These sales agents use highpressure sales techniques to induce investors to purchase securities.211 A bucket shop is a firm
that will make purported sales of stocks to investors, but will keep the funds and not actually
purchase the stock for the investors.212
Firms have set up to offer day trading accounts and equipment to individuals for the
purpose of rapidly trading in and out of the stock market, with the goal of making a small profit
on each trade.213 In a similar vein, many investors with online accounts are involved in day
trading activities by rapidly purchasing and selling stocks during a single day. 214
B. BROKER-DEALER LIABILITY
Broker-dealers can be liable to customers for violations of the securities laws.215
Broker-dealers can be liable to customers for churning accounts.216
Broker-dealers can be liable to customers by charging excessive mark-ups on the price of
securities and not disclosing such.217
Broker-dealers can be liable to customers by not performing a due diligence investigation
of the securities being sold.218
Broker-dealers can violate the rules of SROs by not determining the suitability of the
customers for buying particular securities.219
Section 1416 of the Federal Securities Code220 proposes to provide that a member of a
self-regulatory organization who violates a rule of the organization is liable to a customer for any
loss caused by the violation.
Broker-dealers can be liable to customers for violations of the securities laws by persons
under their control.221
C. ARBITRATION
Mandatory arbitration is required where an investor and a broker-dealer firm sign an
agreement to arbitrate. This agreement is usually contained in an application to open an account.
Indeed, broker-dealers today require customers to sign agreements to submit claims for securities
law violations to arbitration.222
RODRIGUEZ v. SHEARSON AMERICAN EXPRESS, INC., 490 U.S. 477 (1989)
Chapter 9
INVESTMENT ADVISER REGULATION
A. INVESTMENT ADVISERS
A person who provides advice on the purchase and sale of securities for compensation
must register as an investment adviser with the Securities and Exchange Commission.223 Such
investment advisers then have the responsibility of providing appropriate disclosure information
to their clients.224
Many persons who manage the portfolios of private hedge funds have faced problems in
becoming registered with the SEC as investment advisers.225 Previously, a registered investment
adviser could not participate in a performance fee.226 The investment adviser would not register
with the SEC by claiming to only have one or so clients, namely the hedge fund.227 However, it
was possible that the individual partners could be all counted as clients separately causing the
investment adviser to have to register with the SEC.228
As a result, a rule now allows, under certain circumstances, a registered investment
adviser to participate in a performance fee for managing the portfolio of a hedge fund. 229 Also, a
rule now allows, under certain circumstances, the consideration of a hedge fund as only one
client so an investment adviser of such hedge fund might not have to register with the SEC.230
Today, many persons are becoming active in the financial planning business.231 The
great surge in applications for investment adviser registration by these financial planners has
caused the United States Securities and Exchange Commission to consider the requirement of a
membership in a self-regulatory organization that would register with the SEC.232
SEC v. CAPITAL GAINS RESEARCH BUREAU, 375 U.S. 180 (1963)
TRANSAMERICA MORTG. ADVISORS, INC. (TAMA) v. LEWIS, 444 U.S. 11 (1979)
LOWE v. SEC, 472 U.S. 181 (1985)
B. GROWTH OF INSTITUTIONAL INVESTORS
Institutional investors constitute a growing percentage of the volume of securities
purchased in the securities markets.233 This trend started several decades ago.234 Today,
institutional investors represent a significant factor in the securities markets.235
Institutional investors pool the funds of many individual investors to achieve a reduced
cost for the management of portfolio securities, such as in the area of administrative costs and
negotiated commissions on large, block purchases of stock.236 These institutional investor pools
also allow the individual investor to achieve a diversity of risk by owning interests in a portfolio
consisting of the securities of many different companies.237
Portfolio managers attempt to structure the portfolio so as to increase investment return
and to minimize risk, often treating risk in an analytical manner.238 The alpha coefficient is the
estimate of an asset's rate of return when the market is stationary.239 The beta coefficient can be
Chapter 10
TENDER OFFERS
A. FEDERAL REGULATION
Hostile Tender Offers
The hostile tender offer is one of the most intriguing areas of modern corporate finance.
Much of the financial press covers the latest battle between corporate raiders and their prey. 245
Not only is the control of vast corporate treasuries at stake,246 but also are large investment
banking fees and legal fees.247
This area is one that evokes a considerable amount of emotionalism, which is unusual for
the business arena.248 Many political issues, as well as issues of economic, sociological and
psychological importance, exist in large hostile takeover attempts. 249 Entire communities,
especially in locations where the target company might be a dominant industry, will usually
mobilize.250 Complaints of all types reach regulatory authorities.251 Lawsuits in many different
courts, both state and federal, allege various claims and counterclaims against the raider and the
target company.252 These include claims involving antitrust laws, securities laws, state takeover
laws, omissions of material information in disclosure documents or misleading disclosure
releases.253
Section 299.9(a) of the Federal Securities Code254 proposes to provide a definition of a
tender offer to mean an offer to buy a security, or a solicitation of an offer to sell a security,
directed to more than thirty-five persons.
One of the major factors in the great increase of hostile tender offers was the entrance of
the large investment banking firms into the area in the 1970s.255 These firms had made large fees
by advising their corporate clients in mergers and acquisitions during the conglomerate days of
the 1960s.256 Such mergers and acquisitions were usually friendly, negotiated deals.257 The
investment bankers then realized that much larger fees were available over very short periods of
time in a hostile tender offer and they then became active in advising their corporate clients to
proceed.258
The investment banking firms can provide financing to their clients for hostile tender
offers by raising funds through the sale of junk bonds.259
The investment banking firms have also provided financing to recently formed shell
companies by selling junk bonds or preferred stock, usually in private transactions, for use in
possible hostile tender offers.260
These shell companies can then proceed to acquire stock in a potential target company in
secret, until acquiring 5% of the stock.261 Any person or group acquiring 5% or more of the
equity securities of a public company must make a timely filing of a report with the SEC. 262 At
that time, the filing of a report with the Securities and Exchange Commission causes the
ownership to become public information.263 When the filing of such a report takes place, it can
cause an increase in the market activity of the stock of the company because of speculation that
the company is in play.264 This term means that a company has attracted a potential purchaser.265
When a company is in play, the possibility exists that another person, group, or raider
might try to acquire the company at an even higher price. 266 The speculators and the risk
arbitrage firms will often purchase large amounts of stock based on these reports, especially if a
known corporate raider has filed the SEC report.267 Risk arbitrage firms attempt to position
themselves to make a profit on the differences in prices between the current market price of a
stock and a higher price if the company is later acquired in a merger or tender offer.268
The corporate raider then can consider or at any time may make a hostile tender offer for
a majority of the outstanding stock so as to gain control of the target company. 269 Of course, the
corporate raider can elect to acquire less than control of a target company and hold the stock for
possible resale in the market or to another company who might become interested in making a
higher tender offer.270
The raider might actually decide to sell the acquired stock back to the target company in a
greenmail transaction.271 A greenmail transaction involves the purchase of all of the stock
owned by a raider at a profit in order to cause the threat of a hostile takeover to go away.272
PIPER v. CHRIS-CRAFT INDUS., INC., 430 U.S. 1 (1977)
SCHREIBER v. BURLINGTON NORTHERN, INC., 472 U.S. 1 (1985)
Mergers and Acquisitions
The area of mergers and acquisitions is very active today and has remained so for over
two decades.273 Many corporations are continually seeking other companies for expansion
purposes that they perceive as undervalued in their own business lines or even in attractive new
business lines.274 In most corporate combinations, either by merger or acquisition, securities
transfer to the shareholders of at least one of the corporations.275 These securities are often the
common stock of the surviving corporate entity, but can also consist of preferred stock or debt
instruments.276 It is imperative that these securities only transfer after registration with the
Securities and Exchange Commission, or pursuant to an appropriate exemption from such
registration.277
A significant problem has existed for a number of years in the stock market due to shell
corporations.278 These are corporations that have no business activity and virtually no assets or
liabilities.279 Many such shells were once viable corporations that underwent a valid public
offering, but expended all of their funds in business activities, and then went out of the
business.280 These shell corporations often trade in the stock market with very little public
information available, or with substantial misinformation present because of rumors or
speculation.281 Because of earlier problems with many of these shells, the Securities and
Exchange Commission has taken steps to require that the securities distributions of any such
shell corporations register with the SEC or be subject to an appropriate exemption.
More recently, problems have evolved around the creation of a shell corporation by the
process of having a corporation go public with the sole purpose of merging with a yet
unidentified company, or, in effect being a blank check or blind pool offering. 282 These shells
created by a blank check or blind pool offering then trade in the market with very little
substantiated information until the corporation might publicly announce a potential merger.283
In modern corporate finance transactions, including business combinations, many kinds
of securities are issued.284 It is important that full disclosure of all corporate finance aspects of a
times, investors are very receptive to equity ownership and such offerings will attract substantial
attention. Also, because of the prevailing attitude among investors, many of the new issues of
shares of common stock will rise in price in the aftermarket. If the company is in an industry
considered glamorous or hot by the marketplace, the rise in price might be spectacular.307
Of course, stock market activity will almost invariably turn downward at some point.
The result is that new issues will then cool off, especially if the drop is extreme as happened on
October 27, 1987, Black Monday.308
It is often at this juncture that the founders of a company may decide that the stock
market has undervalued its shares, especially after a precipitous drop in market price, and the
company can repurchase such shares from the public shareholders at a fraction of the initial issue
price. Thus, the result could be a going private transaction.309 Afterwards, the founders could
own a private company much better capitalized as a result of the IPO, with a going business, and
no longer subject to extensive governmental reporting requirements.310
Leveraged Buyouts
A leveraged buyout (LBO) of a company is the purchase of a company by the use of
extensive borrowed capital, secured by the assets of the business, with the debt paid from the
earnings, and possibly partial sale of assets, of the company.311
Despite the extensive media coverage of the LBO lately, such corporate financing is not a
new phenomenon.312 Actually, for many years companies have used LBOs in the sale of
corporate divisions.313 Often companies would be eager to dispose of subsidiaries with stodgy
earnings or in unpopular industries that may reflect on the overall image or perceived image of
the parent company.314 Such parent companies would sell the division to members of
management or to other companies at a very attractive price, often assisting in arranging
extensive debt financing for the sale.315
Of course, the recent upsurge in LBOs and management buyouts (MBOs) has not always
involved the traditional company division, but has also involved attractive private companies,
and even more interestingly, public companies.316
Such LBOs can utilize several different steps, including tender offers, mergers,
acquisitions and going private transactions.317 The result of an LBO is a company owned by a
few individuals or investment groups, with several layers of debt, and expecting to liquidate the
debt through earnings and sale of divisions, assisted by large tax write-ups of assets and
consequently much larger tax depreciation schedules than previously existed.318
Many of the highly leveraged corporate combinations obtain financing through junk
bonds.319 The term junk bond means a bond that does not have a rating or has a rating of less
than investment grade.320 A bond of this type is a speculative investment. 321 As a result, the
bond will usually have a much higher yield to attract investors.322
B. STATE REGULATION
Because of the presence of the hostile takeover threat to the modern public corporation,
many such corporations have devised a number of defensive strategies and adopted defensive
corporate measures.323
Since many public corporations incorporate in Delaware, national attention has focused
on the Delaware Chancery Court and the Delaware Supreme Court, especially in the decisions
and opinions concerning the business judgment rule.324 Because of the business judgment rule,
courts are reluctant to substitute their judgment for the judgment of the board of directors of a
corporation concerning business matters.325
In the 1970s, in response to the growing use of the hostile tender offer to take control of
public corporations, many states began to enact state take-over laws.326 These laws appeared to
corporate raiders as favoring incumbent management of locally important industries to the state
and offering protection to such local corporations from unwanted hostile takeovers. 327 As a
result, much litigation has taken place over the state take-over laws.328 The hostile tender offer
has continued through the 1980s and into the 1990s as a viable mechanism for the corporate
raider.329 Likewise, many states have continued to show an interest in enacting such state takeover laws and litigating over them.330
CTS CORP. v. DYNAMICS CORP. OF AMERICA, 481 U.S. 69 (1987)
Chapter 11
INSIDER TRADING
A substantial amount of media attention has recently focused on insider trading of
stock.331 This is the trading of stock in the market based on material nonpublic information.332
Officers, directors, and large shareholders of corporations usually know such information as well
as persons to whom they might give a tip.333 Any person who acts on such inside information is
subject to civil liabilities and criminal penalties.334 The Securities and Exchange Commission
can also bring administrative enforcement actions against such persons.335
Investment banking firms have tried to eliminate inside information problems by
maintaining a strict separation of the corporate finance departments from the trading departments
through the use of a Chinese Wall.336 Such a Chinese Wall acts as a barrier to the flow of any
information from corporate finance personnel to trading personnel.337
Inside information is still a serious problem for the investment banking industry.338
Despite considerable efforts to curb the use of inside information, situations continue to surface
in the media regarding such abuses.339
Section 20A of the Securities Exchange Act, added in 1988, provides for penalties for
insider trading violations.340
Section 21A of the Securities Exchange Act, added in 1988, provides for specific
damages for insider trading violations.341
Section 1303 of the Federal Securities Code342 proposes to make it unlawful for an
insider to sell or buy a security of the issuer if the insider knows a fact that is not generally
available, and includes a definition of an insider to mean the issuer, a director or officer of the
issuer, a person controlled by, or under common control with, the issuer, and includes a
secondary insider whose relationship or former relationship to the issuer gives or gave access to
a fact of special significance about the issuer or the security not generally known, or who learns
such a fact from an insider.
CHIARELLA v. UNITED STATES, 445 U.S. 222 (1980)
DIRKS v. SEC, 463 U.S. 646 (1983)
UNITED STATES v. OHAGAN, 521 U.S. 642 (1997)
Chapter 12
SPECIAL SECURITIES MATTERS
A. INVESTMENT COMPANIES
A company must register with the Securities and Exchange Commission as an investment
company if it is in the business of investing in the securities of other companies, and has 100 or
more shareholders.343 These investment companies comprise the gigantic mutual fund industry
that provides an opportunity for small investors to pool their funds and invest in many different
companies efficiently by purchasing large institutional size blocks of stock.344
JONES v. HARRIS ASSOCIATES, 559 U.S. 335 (2010)
Performance in the portfolio management of mutual funds is extremely important since
the industry is very competitive and the performance results of all mutual funds becomes
publicly known.345
Private investment companies have existed for many years in a form called hedge
funds.346 These hedge funds can trade in and out of securities very rapidly and use such
speculative techniques as margin purchasing of securities and short selling of stock.347 Offers to
participate in such funds are usually only made privately to wealthy individuals.348 The amount
of required investment is high since the funds allow a limited number of investors to
participate.349 The funds also limit the participants to sophisticated purchasers.350 This is
necessary because of the extremely speculative nature of the trading techniques used in the
portfolio management.351 The portfolio manager, or managers, often use a compensation
arrangement based on a percentage of profits.352 Some public mutual funds have compensation
arrangements for portfolio management based on profits,353 but they are usually not as lucrative
as those of the private funds.354
Private investment companies continue to offer various participations to institutions,
wealthy families, and wealthy, sophisticated individual investors.355 These private investment
companies usually are structured as hedge funds or venture capital funds.356 In 1994, it was
estimated that there was $47,000,000,000 raised by these hedge funds.357 In 1998, it was
estimated that there was $26,000,000,000 raised by these venture capital funds.358 Such amounts
are only estimates because these private investment companies are not required to publicly report
information and do not usually voluntarily reveal statistical information.359 The funds continue
to offer securities in private placements and limit the number of investors.360
B. STATE SECURITIES REGULATION
State securities laws were first enacted in the United States in 1911. Challenges to the
early securities laws of the various states on Constitutional grounds were unsuccessful. When
Congress enacted the federal securities laws in the 1930s, it preserved the rights of the states to
have securities laws.
Over the years, the states have had national associations such as the North American
area, regardless of where organized, and also to extend to a local distribution by a secondary
distributor, whether or not a resident of the State or area, but only if the secondary distributor did
not buy securities of the same class in connection with a limited offering.381
Broker-Dealers and their Agents must register with states where they do business. This
registration is done on the Central Registration Depository (CRD) system. This is a
computerized database. Investment Advisers now register with the state where their principal
place of business is located or with the United States Securities and Exchange Commission.
Investment Advisers with $25 million or more under management must register with the SEC.
Those with less than $25 million under management must register with the local state. A
computerized database for Investment Advisers and their Representatives was organized.
Registration is now done on this Investment Adviser Registration Depository (IARD) system.
Congress enacted the National Securities Markets Improvement Act of 1996 that
preempted some parts of state securities laws.382 After these amendments to the federal
securities laws, a further revised Uniform Securities Act was adopted in 2002.383 The purpose
was to coordinate the remaining parts of the state securities laws with the federal securities laws
to continue to have effective securities regulation.384
TRAVELERS HEALTH ASSN. v. VIRGINIA EX. REL. STATE CORPORATION COMMN.,
339 U.S. 643 (1950)
C. INTERNATIONAL SECURITIES REGULATION
In the modern world of corporate transactions and deals, it is often necessary for several
persons, corporations and/or other legal entities, such as general partnerships, limited
partnerships or joint ventures, to enter into agreements for the purchase of securities in a
particular venture.385 It is more than likely that the parties will reside in different states, or even
countries.
It is also possible to have the involvement of federal securities laws in a transaction in a
foreign country or countries, as in situations provided for in Regulation S.386
The federal securities laws can have an effect on a transaction involving United States
citizens investing in a foreign transaction.387
It is necessary for all attorneys and business executives involved in modern business
transactions to be fully aware and cognizant of the possibility that federal securities law is
applicable to many such transactions conducted in foreign countries.388
Section 416 of the Restatement of the Foreign Relations Law of the United States 389 as
revised by the American Law Institute provides that the United States generally has jurisdiction
to prescribe with respect to any transaction in securities in the United States to which a national
or resident is a party, to conduct, regardless of where it occurs, significantly related to such
transaction, if the conduct has, or intends to have, a substantial effect in the United States, and to
conduct occurring predominantly in the United States related to a transaction in securities, even
if the transaction occurs outside the United States.390
Section 403 of the Restatement of the Foreign Relations Law of the United States391 as
revised by the American Law Institute provides that the judging of whether or not the exercise of
jurisdiction is reasonable or unreasonable requires evaluating all relevant factors, including, the
extent to which the activity takes place within the regulating state, or has substantial, direct, and
foreseeable effect upon or in the regulating state.392
Section 1905 of the Federal Securities Code393 proposes to apply federal securities law to
a sale of a security, an offer to sell or buy a security, or an inducement not to buy a security, a
proxy solicitation, a tender offer, or any activity as an investment adviser that occurs within the
United States although initiated outside the United States, as well as to any prohibited, required,
or actionable conduct whose constituent elements occur to a substantial, but not necessarily
predominant, extent within the United States or some or all of whose constituent elements occur
outside the United States but cause a substantial effect within it.
A number of agreements are in effect between various exchanges and market systems in
the United States and other such entities in foreign countries to foster the international trading of
securities.394 In addition, agreements are in effect, usually consisting of a Memorandum of
Understanding or a mutual assistance treaty,395 between securities regulators in the United States
and securities regulators in a number of foreign countries to facilitate the sharing of information
and to provide official assistance in obtaining information.396
More and more foreign countries have local securities laws that affect securities
transactions.397 Many of these countries are currently in the process of modernizing their
securities laws to reflect the growing globalization of the trading markets as well as complex
transnational financing arrangements.398
There are large stock exchanges in many countries around the world. They actively
compete for the stock listing business of corporations. A number of large corporations have
stock exchange listings on several different exchanges. And sometimes in several different
countries.
Stock trading has become an international business and it is often difficult to determine
what law or laws apply to a given transaction.399 In 2010, the United States Supreme Court held
that courts should use a transactional test to determine the applicability of United States law to a
particular situation.400
MORRISON v. NATIONAL AUSTRALIA BANK LTD., 561 U.S. 247 (2010)
*The author is a member of the bars of Louisiana, New York and the District of Columbia. The author
maintains an office in New Orleans, Louisiana.
APPENDIX
Stockholder Reports
Apple Annual Report
Apple Proxy Statement
Offering Documents
Dreamworks Animation Prospectus
Facebook Prospectus
See LUCIUS BEEBE, THE BIG SPENDERS 3-7 (1966); VINCENT P. CAROSSO, INVESTMENT BANKING
IN AMERICA 32 (1970); RON CHERNOW, THE HOUSE OF MORGAN 24 (1990); ARCHIBALD COX, THE
ROLE OF THE SUPREME COURT IN AMERICAN GOVERNMENT 31-34 (1976); MORTON J. HORWITZ,
THE TRANSFORMATION OF AMERICAN LAW, 1780-1860 211-12 (1977); 2 CHARLES WARREN, THE
SUPREME COURT IN UNITED STATES HISTORY 408-10 & n.1 (1922); 2 CHARLES WARREN, HISTORY
OF THE HARVARD LAW SCHOOL AND OF EARLY LEGAL CONDITIONS IN AMERICA 133-55 (1908).
See generally William Power, Big Board, at Age 200, Scrambles to Protect Grip on Stock Market, Wall St. J., May
13, 1992, at A1; Union Pacific's Western Empire, Forbes, Mar. 1, 1967, at 34.
2
See MORTON J. HORWITZ, THE TRANSFORMATION OF AMERICAN LAW, 1780-1860 111-14 (1977);
MORTON J. HORWITZ, THE TRANSFORMATION OF AMERICAN LAW, 1870-1960 65-107 (1992);
MARTIN MAYER, THE LAWYERS 311-14 (1966); ROY C. SMITH, THE MONEY WARS 19-20 (1990); JOEL
SELIGMAN, THE TRANSFORMATION OF WALL STREET 42 (1982); Robert C. Clark, The Four Stages of
Capitalism: Reflections on Investment Management Treatises, 94 Harv. L. Rev. 561, 562 & n.4 (1981); James T.
Kloppenberg, The Theory and Practice of American Legal History, 106 Harv. L. Rev. 1332, 1341 (1993) (reviewing
MORTON J. HORWITZ, THE TRANSFORMATION OF AMERICAN LAW, 1870-1960: THE CRISIS OF
LEGAL ORTHODOXY (1992)); see also Mark J. Osiel, Lawyers as Monopolists, Aristocrats, and Entrepreneurs,
103 Harv. L. Rev. 2009, 2038 & nn.117-18 (1990) (reviewing LAWYERS IN SOCIETY (Richard L. Abel and
Philip S.C. Lewis eds., 1988-1989)).
3
See, e.g., VINCENT P. CAROSSO, INVESTMENT BANKING IN AMERICA 42-43 (1970); WILLIAM L.
CARY, CORPORATIONS 1-6 (4th ed. unabridged 1969); ROY C. SMITH, THE MONEY WARS 24-25 (1990);
Lucian A. Bebchuk, Federalism and the Corporation: The Desirable Limits on State Competition in Corporate Law,
105 Harv. L. Rev. 1435, 1442-44 (1992).
4
See DETLEV F. VAGHTS, BASIC CORPORATION LAW 1-5 (2d ed. 1979).
CARTER F. HENDERSON & ALBERT C. LASHER, 20 MILLION CARELESS CAPITALISTS 87-92 (1967); 1
LOUIS LOSS, SECURITIES REGULATION 27 (2d ed. 1961).
8
See LOUIS LOSS, FUNDAMENTALS OF SECURITIES REGULATION 8 (2d ed. 1988); Joel Seligman, The
Historical Need For a Corporate Disclosure System, in 1 SELECTED ARTICLES ON FEDERAL SECURITIES
LAW 329, 344 (Franklin E. Gill ed., 1991); Note, Regulation of Nonissuer Transactions Under Federal and State
Securities Registration Laws, 78 Harv. L. Rev. 1635, 1643 (1965).
9
See 1 LOUIS LOSS & JOEL SELIGMAN, SECURITIES REGULATION 34 (3d ed. 1989).
10
Merrick v. N.W. Halsey & Co., 242 U.S. 568 (1917); Caldwell v. Sioux Falls Stock Yards Co., 242 U.S. 559
(1917); Hall v. Geiger Jones Co., 242 U.S. 539 (1917).
11
See Manning G. Warren III, Reflections on Dual Regulation of Securities: A Case Against Preemption, 25 B.C. L.
Rev. 495, 496 (1984).
12
13
See JOHN K. GALBRAITH, THE GREAT CRASH 1929 93-132 (3d ed. 1972).
14
See, e.g., WALTER K. EARLE, MR. SHEARMAN AND MR. STERLING AND HOW THEY GREW 238-42
(1963); JOSEPH C. GOULDEN, THE SUPERLAWYERS 153 (1971); J.A. LIVINGSTON, THE AMERICAN
STOCKHOLDER 19-21 (1958); JOEL SELIGMAN, THE TRANSFORMATION OF WALL STREET 50-72
(1982); 2 ROBERT T. SWAINE, THE CRAVATH FIRM AND ITS PREDECESSORS, 1819-1948 703-11 (1948);
GORDON THOMAS & MAX MORGAN-WITTS, THE DAY THE BUBBLE BURST 418-423 (1979); Robert C.
Clark, The Four Stages of Capitalism: Reflections on Investment Management Treatises, 94 Harv. L. Rev. 561, 563
& n.6 (1981); Developments in the Law - Corporate Crime: Regulating Corporate Behavior Through Criminal
Sanctions, 92 Harv. L. Rev. 1227, 1236 & nn.21-22 (1979). See generally Alfred S. Konefsky & John H. Schegel,
Mirror, Mirror on the Wall: Histories of American Law Schools, 95 Harv. L. Rev. 833, 841 (1982).
15
16
17
See RICHARD W. JENNINGS & HAROLD MARSH, JR., SECURITIES REGULATION 63-65 (6th ed. 1987).
18
19
20
EDWARD T. MCCORMICK, UNDERSTANDING THE SECURITIES ACT AND THE S.E.C. 28-37 (1948);
JOEL SELIGMAN, THE HIGH CITADEL 69 (1978); Laura Nader, Enforcement Strategies and the Catch They Yield
at the SEC, 99 Harv. L. Rev. 1362, 1364 (1986) (reviewing SUSAN C. SHAPIRIO, WAYWARD CAPITALISTS TARGET OF THE SECURITIES AND EXCHANGE COMMISSION (1984)).
21
22
23
24
25
26
27
See Milton H. Cohen, "Truth in Securities" Revisited, 79 Harv. L. Rev. 1340, 1366-406 (1966); Louis Loss &
George A. Blackstone, Codification of the Federal Securities Laws, 28 Bus. Law. 381, 381-91 (1973). See generally
LOUIS LOSS, ANECDOTES OF A SECURITIES LAWYER 219-249 (1995).
28
29
See Jane K. Winn, Regulating the Use of the Internet in Securities Markets, 54 Bus. Law. 443, 443-448 (1998);
John C. Coffee, Jr., Brave New World?: The Impact(s) of the Internet on Modern Securities Regulation, 52 Bus.
Law. 1195, 1195-1202 (1997); Alexander C. Gavis, The Offering and Distribution of Securities in Cyberspace: A
Review of Regulatory and Industry Initiatives, 52 Bus. Law. 317, 317-325 (1996).
30
See Joseph J. Cella III & John R. Stark, SEC Enforcement and the Internet: Meeting the Challenge of the Next
Millennium, 52 Bus. Law. 815, 815-821 (1997).
31
See LOUIS LOSS & JOEL SELIGMAN, FUNDAMENTALS OF SECURITIES REGULATION Ch. 7A (5th ed.
2004 & LOUIS LOSS, JOEL SELIGMAN & TROY PAREDES, FUNDAMENTALS OF SECURITIES
REGULATION 2010 Supp.).
32
Regulation SHO, 17 C.F.R. 242.200-204 (2014); see LOUIS LOSS & JOEL SELIGMAN,
FUNDAMENTALS OF SECURITIES REGULATION Ch. 8B3b (5th ed. 2004 & LOUIS LOSS, JOEL
SELIGMAN & TROY PAREDES, FUNDAMENTALS OF SECURITIES REGULATION 2010 Supp.).
33
34
35
See MICHAEL LEWIS, THE BIG SHORT: INSIDE THE DOOMSDAY MACHINE 29-30 (2010).
36
Commodity Futures Modernization Act of 2000, Pub. L. No. 106-554, 114 Stat. 2763; see LOUIS LOSS & JOEL
SELIGMAN, FUNDAMENTALS OF SECURITIES REGULATION 308-314 (5th ed. 2004).
37
See Samuel P. Rothschild, Note, Bad Guys in Bankruptcy: Excluding Ponzi Schemes From the Stockbroker Safe
Harbor, 112 Colum. L. Rev. 1376, 1383-1386 (2012); Diana B. Henriques & Zachery Kouwe, Prominent Trader
Accused of Defrauding Clients, N.Y. Times, Dec. 11, 2008, at A1. See generally Developments in the Law
Corporations and Society, 117 Harv. L. Rev. 2169, 2172-76 (2004).
38
See JOHNATHAN KWITNY, THE FOUNTAIN PEN CONSPIRACY 22-39 (1973); Clifford Kauss, Phillip L
Zweig & Julie Creswell, Texas Firm Accused of $8 Billion Fraud, N.Y. Times, Feb. 18, 2009, at A1.
39
Emergency Economic Stabilization Act of 2008, Pub. L. No. 110-343, 122 Stat. 3765.
40
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Pub. L. No. 111-203, 124 Stat. 1376; see
Derek Fisher, Note, Dodd-Franks Failure to Address CFTC Oversight of Self-Regulatory Organization
Rulemaking, 115 Colum. L. Rev. 69, 83-86 (2015).
41
Jumpstart Our Business Startups Act of 2012, Pub. L. No. 112-106, 126 Stat. 306.
42
USA Patriot Act of 2001, Pub. L. No. 107-56, 115 Stat. 272.
43
See LOUIS LOSS, FUNDAMENTALS OF SECURITIES REGULATION 165 (2d ed. 1988); see, e.g., Marine Bank
v. Weaver, 455 U.S. 551 (1982); International Bhd. of Teamsters v. Daniel, 439 U.S. 551 (1979); United Hous. Found.,
Inc. v. Forman, 421 U.S. 837 (1975); Holden v. Hagopian, 978 F.2d 1115 (9th Cir. 1992); Banco Espanol de Credito v.
Security Pacific National Bank, 973 F.2d 51 (2d Cir. 1992); SEC v. International Loan Network, Inc., 968 F.2d 1304
(D.C. Cir. 1992); Koch v. Hankins, 928 F.2d 1471 (9th Cir. 1991); Williamson v. Tucker, 645 F.2d 404 (5th Cir. 1981),
cert. denied, 454 U.S. 897 (1981); SEC v. Koscot Interplanetary, Inc., 497 F.2d 473 (5th Cir. 1974); SEC v. Glenn W.
Turner Enters., Inc., 474 F.2d 476 (9th Cir.), cert. denied, 414 U.S. 821 (1973).
44
See 2 LOUIS LOSS & JOEL SELIGMAN, SECURITIES REGULATION 869-1083 (3d ed. 1989); Michael E.
Godwin, The New Look of Municipal Bonds, 68 A.B.A. J. 1580 (1982); Roberta S. Karmel, When Is Partnership
Interest or Note a Security, N.Y. L.J., Feb. 18, 1993, at 3; Clyde Mitchell, Certificates of Deposit: Securities at
Times, N.Y. L.J., Nov. 29, 1985, at 1. See generally Roberta S. Karmel, Do the Capital Markets Need So Many
Regulators?, N.Y. L.J., Oct. 18, 1990, at 3.
45
See RICHARD W. JENNINGS & HAROLD MARSH, JR., SECURITIES REGULATION 220-22 (6th ed. 1987).
See generally SEC v. Edwards, 540 U.S. 389 (2004); Landreth Timber Co. v. Landreth, 471 US 681 (1985); SEC v.
W.J. Howey Co., 328 U.S. 293 (1946); SEC v. C.M. Joiner Leasing Corp., 320 U.S. 344 (1943); SEC v. Aqua-Sonic
Products Corp., 687 F. 2d 577 (2d Circuit 1982).
46
See DAVID L. RATNER, SECURITIES REGULATION 229-30 (3d ed. 1986). See generally Suzanna Andrews,
The Hollywood Deal Game, Institutional Inv., Nov. 1991, at 69; Martin Mayer, Elliot Gould As "The Entrepreneur",
Fortune, Oct. 1970, at 109.
47
48
See CHARLES R. GEISST, WALL STREET: A HISTORY 345-364 (1997); see also FRANK PARTNOY,
F.I.A.S.C.O. 48-61 (1997); JAMES D. COX, ROBERT W. HILLMAN & DONALD C. LANGEVOORT,
SECURITIES REGULATION 134-139 (1991).
49
See JOHN BROOKS, THE TAKEOVER GAME 14-18 (1987); 1 TAMAR FRANKEL, SECURITIZATION 1.2, at
6-7 (1991); Charles J. Johnson, Jr. & Michael L. Schler, Zero-Coupon Bonds, in SIXTEENTH ANNUAL INSTITUTE
ON SECURITIES REGULATION 53, 53-60 (Stephen J. Friedman, Charles M. Nathan, Harvey L. Pitt & Roland J.
Santoni eds., 1985); Alvin C. Warren, Jr., Comment, Financial Contract Innovation and Income Tax Policy, 107 Harv. L.
Rev. 460, 460-61 & n.2 (1993); Laura Jereski, Alice in Mortgageland, Forbes, Mar. 1, 1993, at 46; Laura Jereski,
Mortgage Derivatives Claim Victims Big and Small, Wall St. J., Apr. 20, 1994, at C1; Jonathan R. Laing, The Next
Meltdown?, Barron's, June 7, 1993, at 10; Susan Lee, What's With the Casino Society?, Forbes, Sept. 22, 1986, at 150;
Robert Lenzer & William Heuslein, The Age of Digital Capitalism, Forbes, Mar. 29, 1993, at 62; Dana W. Linden, Wall
Street R&D, Forbes, Oct. 12, 1993, at 112.
50
See VICTOR BRUDNEY & MARVIN A. CHIRELSTEIN, CORPORATE FINANCE 133-35 (3d ed. 1987);
MARTIN MAYER, MARKETS 226-29 (1988).
51
See PAUL FERRIS, THE MASTER BANKERS 123 (1984); MICHAEL LEWIS, LIAR'S POKER 136-39
(1989).
52
See RON CHERNOW, THE HOUSE OF MORGAN 656 (1990); 1 TAMAR FRANKEL, SECURITIZATION 6.3,
at 185-87 & nn.1-2 (1991); ADAM SMITH, THE ROARING EIGHTIES 19 (1988); Rodney S. Dayan & Richard T.
Pratt, Mortgage-Related Securities, in SIXTEENTH ANNUAL INSTITUTE ON SECURITIES REGULATION 63,
64-72 (Stephen J. Friedman, Charles M. Nathan, Harvey L. Pitt & Roland J. Santoni eds., 1985); Simon Brady, The Year
of the Asset-Backed Eurobond, Euromoney, Feb. 1990, at 18; Hilary Rosenberg, The Unsinkable Junk Bond,
Institutional Inv., Jan. 1989, at 43.
53
54
See LOUIS LOSS, FUNDAMENTALS OF SECURITIES REGULATION 309-13 (2d ed. 1988); Ezra Weiss,
Regulation A Under the Securities Act of 1933 - Highways and Byways, 8 N.Y. L.F. 3, 40-115 (1962); Ezra Weiss,
Highways and Byways Revisited, 15 N.Y. L.F. 218, 251-68 (1969); Guy P. Lander, SEC Adopts Guidelines on
Raising Capital, N.Y. L.J., Dec. 7, 1992, at 9.
55
See DAVID R. HERWITZ, BUSINESS PLANNING 273-87 (1966); Stephen J. Friedman, The Securities Act of
1933 and Employee Compensation Plans, in FOURTH ANNUAL INSTITUTE ON SECURITIES REGULATION
353, 354-56 (Robert H. Mundheim, Arthur Fleischer, Jr. & John D. Schupper eds., 1973).
56
See, e.g., ROBERT C. POZEN, FINANCIAL INSTITUTIONS: INVESTMENT MANAGEMENT 627-51 (1978);
Robert C. Clark, The Four Stages of Capitalism: Reflections on Investment Management Treatises, 94 Harv. L. Rev.
561, 571-73 (1981); James J. Junewitz, Portfolio Theory and Pension Plan Disclosure, 53 N.Y.U. L. Rev. 1153, 1155-60
(1978).
57
15 U.S.C. 77c(a)(11) (1988); 17 C.F.R. 230.147 (1990); SEC Securities Act Release No. 5450 (Jan. 7, 1974),
reprinted in 3 SEC DOCKET 349 (1974).
58
See LOUIS LOSS, FUNDAMENTALS OF SECURITIES REGULATION 295-305 (2d ed. 1988).
59
15 U.S.C. 77d(2) (1988); Reg. D, 17 C.F.R. 230.501-.508 (1990); SEC Securities Act Release No. 6389 (Mar. 8,
1982), reprinted in 24 SEC DOCKET 1166 (1982).
60
See MOIRA JOHNSTON, TAKEOVER 151-52 (1986); LOUIS LOSS, FUNDAMENTALS OF SECURITIES
REGULATION 317-50 (2d ed. 1988); Marc H. Morgenstern, Private Placement Guidelines - A Lawyer's Letter to a
First-Time Issuer, 48 Bus. Law. 257, 259-76 (1992); see also Robert McGough, Money to Burn, FW, June 26, 1990,
at 18. See generally SEC v. Ralston Purina Co., 346 U.S. 119 (1953); Doran v. Petroleum Management Corp., 545
F.2d 893 (5th Cir. 1977).
61
17 C.F.R. 230.146 (1981); SEC Securities Act Release No. 5487 (Apr. 23, 1974), reprinted in 4 SEC DOCKET 154
(1974); see Jerry C. Paradis, Safe Harbor for the Non-Public Sale of Securities - Rule 146, 22 La. B.J. 167, 173-77
(1974); Robert L. Frome, 'Continental Tobacco' Decision Analyzed, N.Y. L.J., Mar. 7, 1977, at 1; see, e.g., SEC v.
Continental Tobacco Co. of South Carolina, 463 F.2d 137 (5th Cir. 1972); Hill York Corp. v. American Int'l Franchises,
Inc., 448 F.2d 680 (5th Cir. 1971).
62
SEC Securities Act Release No. 5912 (Mar. 3, 1978), reprinted in 14 SEC DOCKET 306 (1978).
63
See RICHARD W. JENNINGS & HAROLD MARSH, JR., SECURITIES REGULATION 504-07 (6th ed. 1987).
64
See A.A. Sommer, Jr., Who's "In Control"? - S.E.C., 21 Bus. Law. 559, 559-62 (1966).
65
See Carl W. Schneider, Section 4(1-1/2) - Private Resales of Restricted or Control Securities, 49 Ohio St. L.J. 501,
501-14 (1988); Lawrence R. Seidman, Comment, SEC Rule 144A: The Rule Heard Round the Globe - Or the Sounds of
Silence?, 47 Bus. Law. 333, 334-36 (1991).
66
See LOUIS LOSS, FUNDAMENTALS OF SECURITIES REGULATION 375-76 (2d ed. 1988).
67
See 3 LOUIS LOSS & JOEL SELIGMAN, SECURITIES REGULATION 1499-1502 (3d ed. 1989).
68
See DAVID L. RATNER, SECURITIES REGULATION 317-40 (3d ed. 1986); Stephen Glover, Good Intentions
in a Bad Economy, Legal Times, Dec. 31, 1990, at 20.
69
See LOUIS LOSS, FUNDAMENTALS OF SECURITIES REGULATION 365-66 (2d ed. 1988).
70
17 C.F.R. 230.144 (1990); SEC Securities Act Release No. 5223 (Jan. 11, 1972); see James F. Olson, SEC
Makes Unheralded Changes in Rule 144 On Sales Volume, Manner, Legal Times of Wash., Oct. 2, 1978, at 14.
71
See 3 LOUIS LOSS & JOEL SELIGMAN, SECURITIES REGULATION 1502-75 (3d ed. 1989).
72
17 C.F.R. 230.144A (1990); SEC Securities Act Release No. 6862 (Apr. 23, 1990), reprinted in 46 SEC DOCKET
26 (1990); see Simon Brady, Evolution, Not Revolution, Euromoney, June 1990, at 47.
73
See LISA ENDLICH, GOLDMAN SACHS 253-260 (1999); JAMES D. COX, ROBERT W. HILLMAN &
DONALD C. LANGEVOORT, SECURITIES REGULATION 215-216 (1991).
74
See, e.g., WILLIAM L. CARY, CORPORATIONS 1376-78 (4th ed. unabridged 1969); ERWIN O. SMIGEL, THE
WALL STREET LAWYER 160-63 (1964); Irwin B. Arieff, New Stock Issues Glide into Market, Legal Times, May 9,
1983, at 1.
75
See VICTOR BRUDNEY & MARVIN A. CHIRELSTEIN, CORPORATE FINANCE 988-93 (3d ed. 1987). See
generally Shaw v. Digital Equipment Corp., 82 F.3d 1194 (1st Cir. 1996).
76
77
15 U.S.C. 77f, 77h (1988); Reg. C, 17 C.F.R. 230.400-498 (2014); 17 C.F.R. 230.152 (2014); 17 C.F.R.
230.176 (2014); see SEC, INSTITUTIONAL INVESTOR STUDY REPORT, H.R. DOC. NO. 92-64, 92d Cong., 1st
Sess., at 2343-2373 (1971); LOUIS LOSS, SECURITIES REGULATION 166-67 (1951); see, e.g., Claudia
MacLachlan, It Was a Good Year For Law Firms That Did Equity Issues, Nat'l L.J., Jan. 17, 1994, at 17.
78
See MARTIN MAYER, THE LAWYERS 317-19 (1966); GERALD J. ROBINSON & KLAUS EPPLER,
GOING PUBLIC, 81, at 354-56 (1978); WHEN CORPORATIONS GO PUBLIC 121-28 (Carlos L. Israels &
George M. Duff, Jr. eds., 1962).
79
15 U.S.C. 77g, 77j, 77aa sched. A-77bb sched. B (1988); Reg. S-X, 17 C.F.R. 210.1-01 to .12-29 (1990); Reg.
S-K, 17 C.F.R. 229.10 to .802 (1990); see EDWARD T. MCCORMICK, UNDERSTANDING THE SECURITIES
ACT AND THE S.E.C. 109-59 (1948); GERALD J. ROBINSON & KLAUS EPPLER, GOING PUBLIC, 83, at 35860 (1978); JAMES B. STEWART, THE PARTNERS 114-51 (1983); Joseph W. Bartlett & J. David Waldman, Select
Problems in Late-Round Private Financings: Soft Information; Integration; Debt vs. Equity, 17 Sec. Reg. L.J. 227, 22728 & n.3 (1989); Bruce A. Mann, Integration in the Context of Registered Public Offerings, in FOURTEENTH
ANNUAL INSTITUTE ON SECURITIES REGULATION 3, 3-6 (Stephen J. Friedman, Charles M. Nathan, Harvey L.
Pitt & Roland J. Santoni eds., 1983).
80
See ADAM SMITH, SUPERMONEY 19-22 (1972). See generally Thomas N. Cochran, Baby Boom, Barron's,
Dec. 20, 1993, at 15; Scott DeCarlo & Gilbert Steedley, Stock Market Lotto, Forbes, June 21, 1993, at 210; Ann
Hagedorn & Anne Newman, Blair New Issues Defy Gravity - With Help From J. Morton Davis, Wall St. J., May 6,
1991, at A1; Michael Siconolfi & William Power, Underwriting Boom Puts Tortoises Ahead Of Wall Street's Hares,
Wall St. J., March 26, 1992, at A1.
81
82
See WHEN CORPORATIONS GO PUBLIC 10-11 (Carlos L. Israels & George M. Duff, Jr. eds., 1962).
83
See Carl W. Schneider, Joseph M. Manko & Robert S. Kant, Going Public - Practice, Procedure and Consequences,
27 Vill. L. Rev. 1, 3-37 (1981).
84
See Francis M. Wheat & George A. Blackstone, Guideposts for a First Public Offering, 15 Bus. Law. 539, 540-62
(1960). See generally Robert L. Frome, Do the Markets Affect an IPO's Performance?, N.Y. L.J., Sept. 28, 1989, at 3.
85
See, e.g., JOHN BROOKS, THE TAKEOVER GAME 107-30 (1987); DAVID L. RATNER, SECURITIES
REGULATION 69-70 (3d ed. 1986).
86
See Donald C. Langevoort, Information Technology and the Structure of Securities Regulation, 98 Harv. L. Rev. 747,
771-73 (1985).
87
88
89
90
See A.F. Ehrbar, Upheaval in Investment Banking, Fortune, Aug. 23, 1982, at 90.
91
See VINCENT P. CAROSSO, INVESTMENT BANKING IN AMERICA 1-25 (1970). See generally United
States v. Morgan, 118 F. Supp. 621 (S.D.N.Y. 1953).
92
See PAUL HOFFMAN, THE DEALMAKERS 1-32 (1984); STEWART H. HOLBROOK, THE AGE OF THE
MOGULS 19, 152 (1953); MORTON J. HORWITZ, THE TRANSFORMATION OF AMERICAN LAW, 1780-1860
31-42 (1977); see also Eugene D. Genovese, Book Review, 91 Harv. L. Rev. 726, 726-28 (1978) (reviewing MORTON
J. HORWITZ, THE TRANSFORMATION OF AMERICAN LAW, 1780-1860 (1977)). See generally THOMAS
PIKETTY, CAPITAL IN THE TWENTY-FIRST CENTURY 164 (2014).
93
See LOUIS LOSS, FUNDAMENTALS OF SECURITIES REGULATION 77-78 (2d ed. 1988).
94
See 1 LOUIS LOSS & JOEL SELIGMAN, SECURITIES REGULATION 324-41 (3d ed. 1989).
95
See RICHARD W. JENNINGS & HAROLD MARSH, JR., SECURITIES REGULATION 35-36 (6th ed. 1987).
96
See RICHARD W. JENNINGS & HAROLD MARSH, JR., SECURITIES REGULATION 32 (6th ed. 1987).
97
See LOUIS LOSS, FUNDAMENTALS OF SECURITIES REGULATION 85-86 (2d ed. 1988).
98
See LOUIS LOSS, FUNDAMENTALS OF SECURITIES REGULATION 86 (2d ed. 1988); 6 LOUIS LOSS,
SECURITIES REGULATION 3681 (2d ed. Supp. 1969).
99
100
See RICHARD W. JENNINGS & HAROLD MARSH, JR., SECURITIES REGULATION 30 (6th ed. 1987).
See 1 LOUIS LOSS & JOEL SELIGMAN, SECURITIES REGULATION 342 & n.45 (3d ed. 1989).
101
See 1 LOUIS LOSS & JOEL SELIGMAN, SECURITIES REGULATION 342 n.45 (3d ed. 1989); WHEN
CORPORATIONS GO PUBLIC 78 (Carlos L. Israels & George M. Duff, Jr. eds., 1962).
102
See LOUIS LOSS, FUNDAMENTALS OF SECURITIES REGULATION 86 (2d ed. 1988); 4 LOUIS LOSS,
SECURITIES REGULATION 2296-97 (2d ed. Supp. 1969).
103
See, e.g., CHARLES RAW, BRUCE PAGE & GODFREY HODGSON, "DO YOU SINCERELY WANT TO BE
RICH?" 338-46 (1971); Note, Procedures and Remedies in Limited Partners' Suits for Breach of the General Partner's
Fiduciary Duty, 90 Harv. L. Rev. 763, 763 & n.1, 765 & n.12, 767 (1977). See generally Eleanore Carruth, The New Oil
Rush in Our Own Backyard, Fortune, June 1974, at 154; The Rockers Are Rolling in It, Forbes, Apr. 15, 1973, at 28;
Roundtable Discussion: Tax Sheltered Investments, Wall St. Transcript, June 12, 1978, at 50,944; Dana L. Thomas,
Outwitting Uncle Sam, Barron's, Sept. 19, 1977, at 3.
104
See Andrew Patner, Real Estate Syndicator Spins an Intricate Web And Gets Tangled in It, Wall St. J., Feb. 1,
1990, at A1.
105
See KIM I. EISLER, SHARK TANK 147-48 (1990); DAVID MCCLINTIC, STEALING FROM THE RICH 25-29
(1977); Raymond Brady, Personal Money Machine of John King, Dun's, June 1970, at 34.
106
107
108
See Ellen J. Pollock, Nightmare On Golden Pond, Am. Law., Mar. 1983, at 97.
109
110
See Wall Street's New Fashions, Forbes, July 15, 1971, at 22.
111
See FERDINAND LUNDBERG, THE RICH AND THE SUPER-RICH 402-03 (1968); JAMES PRESLEY, A
SAGA OF WEALTH 231-32 (1978); JACQUELINE THOMPSON, THE VERY RICH BOOK 328-30 (1981);
DANIEL YERGEN, THE PRIZE 575 (1991). See generally David T. Maguire, Scamalot: The Land of Tax Shelter
Prosecution, 70 A.B.A. J. 52 (July 1984).
112
113
See CARY REICH, FINANCIER 130-63 (1983). See generally Laura Landro, Overseas Distributor Takes On
Big Studios By Doing Own Films, Wall St. J., Apr. 16, 1985, at 1; Laura Sachar, Testing the Limits In Limited
Partnerships, Fin. World, July 12, 1988, at 30.
114
See PAUL HOFFMAN, THE DEALMAKERS 182 (1984); JOSEPH WECHSBERG, THE MERCHANT
BANKERS 247-49 (1966); Larry Light & Joan O'C. Hamilton, Rewriting the Rules of Venture Capital, Bus. Wk., July
19, 1993, at 70; Has the Bear Market Killed Venture Capital?, Forbes, June 15, 1970, at 28. See generally Joseph H.
Fishman, Creating Around Copyright, 128 Harv. L. Rev. 1333, 1338 & n.23 (2015); Jonathan L. Zittrain, The
Generative Internet, 119 Harv. L. Rev. 1974, 2027-28 & n.203 (2006); Developments in the Law Corporations and
Society, 117 Harv. L. Rev. 2169, 2176-77 & n.38 (2004).
115
See WILLIAM D. BYGRAVE & JEFFRY A. TIMMONS, VENTURE CAPITAL AT THE CROSSROADS 3843 (1992); DOUGLAS G. CARLSTON, SOFTWARE PEOPLE 191-95 (1985); PETER COLLIER & DAVID
HOROWITZ, THE ROCKEFELLERS 290-302 (1976); THOMAS M. DOERFLINGER & JACK L. RIVKIN,
RISK AND REWARD 12-13 (1987); JACQUELINE THOMPSON, FUTURE RICH 37-38 (1985); Note,
Community Development Corporations: Operations and Financing, 83 Harv. L. Rev. 1558, 1626-27 (1970); Steven
S. Anreder, Up the Entrepreneur, Barron's, Aug. 25, 1980, at 4; Connie Bruck, Paul Brountas At The Top, Am.
Law., Oct. 1988, at 158.
116
See CONNIE BRUCK, THE PREDATOR'S BALL 10-20 (1988). See generally WILLIAM D. COHAN, THE
LAST TYCOONS Ch. 19 (2007); John Brodie, Its Ralphs World, Fortune, Sept. 17, 2007, at 65; Neil Weinberg,
(Sachs Appeal), Forbes, Jan. 29, 2007, at 56; Dyan Machan, Herbert Allen and His Merry Dealsters, Forbes, July 1,
1996, at 68; Susan Caminiti, Ralph Lauren: The Emperor Has Clothes, Fortune, Nov. 1996, at 80; Deidre Fanning,
Bid-em-up Bruce?, Forbes, Aug. 7, 1989, at 58.
117
See John J. Madden, Investment Banks Adopt New Role With Bridge Financing, N.Y. L.J., Mar. 16, 1987, at 29.
118
See BRYAN BURROUGH & JOHN HELYER, BARBARIANS AT THE GATE 156 (1990).
119
See Tom Bancroft, Psst!!! Wanna Buy a Bridge?, FW, Apr. 3, 1990, at 26.
120
121
See PAUL FERRIS, THE CITY 76-84 (1960); JOSEPH WECHSBERG, THE MERCHANT BANKERS 8-20
(1966); DEREK WILSON, ROTHSCHILD 16-27 (1988).
122
See Amy C. Pershing, The Perils of Merchant Banking, Institutional Inv., Feb. 1988, at 45.
123
124
125
See FRANK PORTNOY, INFECTIOUS GREED 374-392 (2003); Dyan Machan, An Edison for a New Age?,
Forbes, May 17, 1999, at 178.
126
See JOHN CASSITY, DOT.CON Ch. 20 (2002). See generally Developments in the Law Corporations and
Society, 117 Harv. L. Rev. 2169, 2172-76 (2004).
127
128
See WILLIAM D. COHAN, MONEY AND POWER Ch. 22 (2011); VICKY WARD, THE DEVILS CASINO
173-174 (2010); ANDREW ROSS SORKIN, TOO BIG TO FAIL 14 (2009); WILLIAM D. COHAN, HOUSE OF
CARDS Ch. 26 (2009).
129
130
131
132
See 1 ALAN R. BROMBERG & LEWIS D. LOWENFELS, SECURITIES FRAUD AND COMMODITIES
FRAUD 2.2, at 2:13 to 2:16 (1991); DAVID R. HERWITZ, BUSINESS PLANNING 189-90, 192-99, 202-261
(1966); 4 HERBERT B. NEWBERG, NEWBERG ON CLASS ACTIONS 22.01, at 4 & n.3 (2d ed. 1985); James R.
Farrand, Ancillary Remedies in SEC Civil Enforcement Suits, 89 Harv. L. Rev. 1779, 1779-90 (1976); Louis Loss,
Comment, The Assault on Securities Act Section 12(2), 105 Harv. L. Rev. 908, 908-16 (1992); William R. McLucas,
Stephen M. DeTore & Arian Colachis, SEC Enforcement: A Look at the Current Program and Some Thoughts About
the 1990s, 46 Bus. Law. 797, 823 (1991); Marc I. Steinberg, The Propriety and Scope of Cumulative Remedies Under
the Federal Securities Laws, 67 Cornell L. Rev. 557, 560-606 (1982). See generally TOM BOWER, MAXWELL 25860 (1988); Note, Liability Insurance for Corporate Executives, 80 Harv. L. Rev. 648, 657-68 (1967); David Spears &
Leanore Barth, The SEC's Interpretation Of Its New Cease-and-Desist Powers, N.Y. L.J., Oct. 13, 1992, at 1.
133
15 U.S.C. 77k (1988). See generally Harden v. Raffensperger, Hughes & Co., Inc., 65 F.3d 1392 (7 th Cir.
1995); Feit v. Leasco Data Processing Equip. Corp., 332 F.Supp. 544 (E.D.N.Y. 1971); Escott v. BarChris Constr.
Corp., 283 F. Supp. 643 (S.D.N.Y. 1968).
134
135
136
137
138
139
United States v. Naftalin, 441 U.S. 768 (1979); see LOUIS LOSS, FUNDAMENTALS OF SECURITIES
REGULATION 799-801 (1983).
140
Aaron v. SEC, 446 US 680 (1980). See generally Globus v. Law Research Service, Inc., 418 F.2d 1276 (1969).
141
15 U.S.C. 78l(g)-(h) (1988); SEC Securities Exchange Act Release No. 23,406 (July 8, 1986), reprinted in 36
SEC DOCKET 56 (1986); see Hugh L. Sowards, The Securities Acts Amendments of 1964: New Registration and
Reporting Requirements, 19 U. Miami L. Rev. 33, 33-40 (1964).
142
15 U.S.C. sec. 78m(a) (1988); see William L. Cary, Federalism and Corporate Law: Reflections Upon Delaware,
83 Yale L.J. 663, 692-703 (1974); Michael J. Connell, Current Developments Under the 1933 and 1934 Acts, in
SIXTEENTH ANNUAL INSTITUTE ON SECURITIES REGULATION 77, 77-80 (Stephen J. Friedman, Charles
M. Nathan, Harvey L. Pitt & Roland J. Santoni eds., 1985); Arthur Fleischer, Jr., "Federal Corporate Law": An
Assessment, 78 Harv. L. Rev. 1146, 1146-72 (1965); Carl W. Schneider & Jason M. Shargel, "Now That You Are
Publicly Owned...", 36 Bus. Law. 1631, 1632-34 (1981); see also 56 SEC ANN. REP. 70-72 (1990); Donald C.
Langevoort, Information Technology and the Structure of Securities Regulation, 98 Harv. L. Rev. 747, 757-58 &
n.41 (1985); Barry D. Bayer & Benjamin H. Cohen, Bringing CD-ROM to Your Laptop, Legal Times, Feb. 7, 1994,
at 37; Richard Karp, Hello EDGAR, Bye-Bye Paper, Barron's, June 21, 1993, at 18; Jim Meyer, Surfing the 'Net, 80
A.B.A. J. 100 (Feb. 1994); Richard H. Rowe, Mandatory Electronic SEC Filing Set To Begin in 1987, N.Y. L.J.,
Dec. 8, 1986, at 33; Gary Slutsker & Janet Novack, Haste Makes Waste, Forbes, Aug. 24, 1987, at 94.
143
15 U.S.C. 78n(a) (1988); see EDWARD R. ARANOW & HERBERT A. EINHORN, PROXY CONTESTS FOR
CORPORATE CONTROL 89-146 (2d ed. 1968); EDWARD R. ARANOW & HERBERT A. EINHORN, PROXY
CONTESTS FOR CORPORATE CONTROL 81-129 (1957); Myron P. Curzan & Mark L. Pelesh, Revitalizing
Corporate Democracy: Control of Investment Managers' Voting on Social Responsibility Proxy Issues, 93 Harv. L. Rev.
670, 672-77 (1980); Melvin A. Eisenberg, Access to the Corporate Proxy Machinery, 83 Harv. L. Rev. 1489, 1519-26
(1970); Patrick F. Ryan, Rule 14a-8 and Institutional Shareholder Proposals, in 2 SELECTED ARTICLES ON
FEDERAL SECURITIES LAW 190, 191-95 (Franklin E. Gill ed., 1991); Sherry R. Sontag, Investors Use Clout In the
Corporate Governance Battle, Nat'l L.J., Dec. 2, 1991, at 23.
144
See EDWARD R. ARANOW & HERBERT A. EINHORN, PROXY CONTESTS FOR CORPORATE
CONTROL 146-59 (2d ed. 1968); EDWARD R. ARANOW & HERBERT A. EINHORN, PROXY CONTESTS
FOR CORPORATE CONTROL 129-39 (1957); WILLIAM L. CARY, CORPORATIONS 297-361 (4th ed.
unabridged 1969); RON CHERNOW, THE HOUSE OF MORGAN 506-11 (1990); JOHN BROOKS, THE
GAMES PLAYERS 3-29 (1980); J. PAUL GETTY, HOW TO BE RICH 21-24 (1965); ROBERT LENZNER, THE
GREAT GETTY 52-58 (1986); RUSSELL MILLER, THE HOUSE OF GETTY 105-23 (1986); LOUIS NIZER,
MY LIFE IN COURT 427-523 (1961); Kenneth J. Bialkin, Proxy Contests, in FIFTEENTH ANNUAL INSTITUTE
ON SECURITIES REGULATION 207, 225-26 (Stephen J. Friedman, Charles M. Nathan, Harvey L. Pitt & Roland
J. Santoni eds., 1984); Karen Donovan, Proxy Fight Tests SEC's New Rules Easing Speech, Nat. L.J., Dec. 14,
1992, at 17; Richard H. Miller, Proxy Contest Will Re-Enter The Spotlight, N.Y. L.J., June 4, 1990, at 5; Andy
Zipser, Wrong Number?, Barron's, Nov. 30, 1992, at 18; see, e.g., Gould v. American-Hawaiian Steamship Co., 535
F.2d 761 (3d Cir. 1976); Playboy Enters., Inc., SEC Securities Exchange Act Release No. 17,059 (Aug. 13, 1980),
reprinted in 20 SEC DOCKET 916 (1980).
145
See LOUIS LOSS & JOEL SELIGMAN, FUNDAMENTALS OF SECURITIES REGULATION 1022-25 (3d
ed. 1995). See generally Virginia Bankshares, Inc. v. Sandberg, 501 U.S. 1083 (1991); Mills v. Electric Auto-Lite
Co., 396 U.S. 375 (1970); JI Case Co. v. Borak, 377 U.S. 426 (1964).
146
See LOUIS LOSS & JOEL SELIGMAN, FUNDAMENTALS OF SECURITIES REGULATION 471-80 (3d ed.
1995).
147
148
149
4 FED. SEC. L. REP. (CCH) 31,001-04; see, e.g., Barry S. Augenbraun & Ernest Ten Eyck, Financial
Statement Representations in Acquisition Transactions, 47 Bus. Law. 157, 157-59 (1991); Paul M. Bernstein,
Disclosure of Merger Negotiations, N.Y. L.J., May 23, 1984, at 1.
150
151
See LOUIS LOSS & JOEL SELIGMAN, FUNDAMENTALS OF SECURITIES REGULATION 175-177 (5th
ed. 2005).
152
See Diana B. Henriques & Zachery Kouwe, Prominent Trader Accused of Defrauding Clients, N.Y. Times, Dec.
11, 2008, at A1.
153
See Clifford Kauss, Phillip L Zweig & Julie Creswell, Texas Firm Accused of $8 Billion Fraud, N.Y. Times,
Feb. 18, 2009, at A1.
154
Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, 116 Stat. 745; see Roberta Romano, The Sarbanes-Oxley Act
and Quack Corporate Governance, 114 Yale L.J. 1521 (2005).
155.
See MOIRA JOHNSTON, TAKEOVER 247 (1986); LOUIS LOSS, FUNDAMENTALS OF SECURITIES
REGULATION 541-82 (2d ed. 1988); Frederick M. Hopkins, Note, Gollust v. Mendell: Toward an Objective
Standard of Standing Under Section 16(b), 48 Bus. Law. 373, 375-76 (1992); Robert T. Lang & Melvin Katz,
Liability For "Short Swing" Trading in Corporate Reorganizations, in SELECTED ARTICLES ON FEDERAL
SECURITIES LAW 679, 679-706 (Herbert S. Wander & Warren F. Grienenberger eds., 1968); Thomas O. Lind,
"Et Seq.", Briefly Speaking (New Orleans B. Ass'n, New Orleans, La.), Summer 1991, at 2; see, e.g.,
Foremost-McKesson v. Provident Sec. Co., 423 U.S. 232 (1976); Reliance Electric Co. v. Emerson Electric Co., 404
U.S. 418 (1972); Blau v. Lehman, 368 U.S. 403 (1962); C.R.A. Realty Corp. v. Crotty, 878 F.2d 562 (2d Cir. 1989);
Mayer v. Chesapeake Insurance Co., 877 F.2d 1154 (2d Cir. 1989); Texas Int'l Airlines, Inc v. National Airlines,
Inc., 714 F.2d 533 (5th Cir. 1983); American Standard, Inc. v. Crane, 510 F.2d 1043 (2d Cir.), cert. denied, 421 U.S.
1000 (1974); Chemical Fund, Inc. v. Xerox Corp., 377 F.2d 107 (2d Cir. 1967).
156.
See JAMES D. COX, ROBERT W. HILLMAN & DONALD C. LANGEVOORT, SECURITIES REGULATION
866-879 (1991). See generally Kern County Land Co. v. Occidental Petroleum Corp., 411 U.S. 582 (1973);
Smolowe v. Delendo Corp., 136 F.2d 231 (2d Cir.), cert. denied, 320 U.S. 751 (1943).
157
158
159
160
161
See CHRIS WELLES, THE LAST DAYS OF THE CLUB 8-16 (1975); see, e.g., Gordon v. New York Stock Exch.,
Inc., 422 U.S. 659 (1975); Silver v. New York Stock Exch., 373 U.S. 341 (1963).
162
See RON CHERNOW, THE HOUSE OF MORGAN 602-03 (1990); MARTIN MAYER, MARKETS 224 (1988).
See generally Arlene Hershman, Big Shift on Wall Street, Dun's Rev., May 1976, at 39.
163
164
See PAUL FERRIS, THE CITY 18-29 (1960); Roberta S. Karmel, 'Big Bang' in London, N.Y. L.J., Dec. 20,
1984, at 1.
165
See PAUL FERRIS, THE MASTER BANKERS 176 (1984); Bryan Burrough, Craig Forman & Kathryn Graven,
How Merrill Lynch Moves Its Stock Deals All Around the World, Wall St. J., Nov. 9, 1987, at 1.
166
167
168
169
See SEC, REPORT OF SPECIAL STUDY OF SECURITIES MARKETS, H.R. DOC. NO. 95, 88th Cong., 1st
Sess., pt. 2, at 911-912 (1963); 37 SEC ANN. REP. 73-74 (1971); The Regional Stock Exchanges Fight for
Survival, Fortune, Nov. 1973, at 118.
170
See LOUIS LOSS, FUNDAMENTALS OF SECURITIES REGULATION 598-99 (2d ed. 1988).
171
See Norman S. Poser, Restructuring the Stock Markets: A Critical Look at the SEC's National Market System, 56
N.Y.U. L. Rev. 881, 915-45 (1981). See generally Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 135 F.3d
256 (3d Cir. en banc 1998).
172
See Carl W. Schneider, Joseph M. Manko & Robert S. Kant, Going Public - Practice, Procedure and Consequences,
27 Vill. L. Rev. 1, 41-44 (1981).
173
See MARTIN MAYER, MARKETS 90 (1987); JOEL SELIGMAN, THE SEC AND THE FUTURE OF FINANCE
82-83 (1985).
174
LOUIS LOSS, FUNDAMENTALS OF SECURITIES REGULATION 233-35 (2d ed. 1988); MARTIN MAYER,
MARKETS 47-48 (1987); JOEL SELIGMAN, THE SEC AND THE FUTURE OF FINANCE 83-84 (1985).
175
LOUIS LOSS, FUNDAMENTALS OF SECURITIES REGULATION 233-35 (2d ed. 1988); MARTIN
MAYER, MARKETS 47-49 (1987); JOEL SELIGMAN, THE SEC AND THE FUTURE OF FINANCE 83-84
(1985).
176
See, e.g., VINCENT P. CAROSSO, INVESTMENT BANKING IN AMERICA 103 (1970); ROBERT SOBEL,
INSIDE WALL STREET 67-90 (1977). See generally Saul Hansell, The Wild, Weird World Of Electronic Exchanges,
Institutional Inv., Sept. 1989, at 91.
177
See JOHN BROOKS, THE GO-GO YEARS 21-25 (1973); ROBERT SOBEL, N.Y.S.E. 330-54 (1975).
178
See VINCENT P. CAROSSO, MORE THAN A CENTURY OF INVESTMENT BANKING 155 (1979); Eric A.
Chiappinelli, Red October: Its Origins, Consequences, and the Need to Revive the National Market System, 18 Sec.
Reg. L.J. 144, 162-63 & n.64 (1990).
179
See JOEL SELIGMAN, THE SEC AND THE FUTURE OF FINANCE 18-20 (1985).
180
See 5 LOUIS LOSS, SECURITIES REGULATION 3317-20 (2d ed. Supp. 1969).
181
182
See Neil Weinberg & Daniel Kruger, The Big Board Comes Back From the Brink, Forbes, Nov. 13, 2000, at 274.
183
See Floyd Norris, Sacrificing Sense For Speed in Markets, N.Y. Times, Apr. 11, 2014, at B1.
184
See DAVID A. VISE & STEVE COLL, EAGLE ON THE STREET 196-198 (1991).
185
186
See MICHAEL LEWIS, FLASH BOYS: A WALL STREET REVOLT 44-55 (2014).
187
188
See LOUIS LOSS, FUNDAMENTALS OF SECURITIES REGULATION 446-49 (2d ed. 1988). See generally
SEC v. Sloan, 436 U.S. 103 (1978).
189
See JOEL SELIGMAN, THE TRANSFORMATION OF WALL STREET 156-89 (1982); DETLEV F. VAGHTS,
BASIC CORPORATION LAW 541-57 (2d ed. 1979); John C. Coffee, Jr., Milking Milken: Sentencing as Quid Pro
Quo, Legal Times, Dec. 3, 1990, at 29; John Sturc & Gerald Lins, Congress Gets Tough on Securities Violations, Legal
Times, Oct. 1, 1990, at 27.
190
See LOUIS LOSS, FUNDAMENTALS OF SECURITIES REGULATION 871-1049 (2d ed. 1988).
191
See Alan R. Bromberg & Lewis D. Lowenfels, Aiding and Abetting Securities Fraud: A Critical Examination, 52
Alb. L. Rev. 637, 639-43 (1988); Kenneth R. Cone & James E. Laurence, How Accurate are Estimates of Aggregate
Damages in Securities Fraud Cases?, 48 Bus. Law. 505, 505-21 (1994); Dean Furbush & Jeffrey W. Smith, Estimating
the Number of Damaged Shares in Securities Fraud Litigation: An Introduction to Stock Trading Models, 48 Bus. Law.
527, 527-42 (1994); Donald C. Langevoort, Disclosures that "Bespeak Caution", 49 Bus. Law. 481, 481-92 (1994);
Mark L. Mitchell& Jeffry M. Netter, The Role of Financial Economics in Securities Fraud Cases: Applications at the
Securities and Exchange Commission, 48 Bus. Law. 545, 545-72 (1994); Note, The Fraud-on-the-Market Theory, 95
Harv. L. Rev. 1143, 1144-53 (1982); see, e.g., Affiliated Ute Citizens of Utah v. United States, 406 U.S. 128 (1972);
Superintendent of Ins. v. Bankers Life & Casualty Co., 404 U.S. 6 (1971). See generally Dura Pharmaceuticals, Inc. v.
Broudo, 544 U.S. 336 (2005); Basic, Inc. v. Levinson, 485 U.S. 224 (1988); Ernst & Ernst v. Hochfelder, 425 U.S.
185 (1976); Blue Chip Stamps v. Manor Drug Store, 421 U.S. 723 (1975).
192
18 U.S.C. 1961-1968 (1988); see 1 ALAN R. BROMBERG & LEWIS D. LOWENFELS, SECURITIES FRAUD
AND COMMODITIES FRAUD 2.2, at 2:18 to 2:44.1 (1991); 4 HERBERT B. NEWBERG, NEWBERG ON CLASS
ACTIONS 22.01, at 4 & nn.4-6 (2d ed. 1985); ADAM SMITH, SUPERMONEY 165-69 (1972); Joseph A. Grundfest,
Disimplying Private Rights of Action Under the Federal Securities Laws: The Commission's Authority, 107 Harv. L.
Rev. 961, 982 & n.79 (1994); Milton Pollack, Book Review, 90 Harv. L. Rev. 482, 484 (1976) (reviewing
MULTINATIONAL APPROACHES - CORPORATE INSIDERS (Louis Loss ed., 1976)); Developments in the Law Class Actions, 89 Harv. L. Rev. 1318, 1321-31 (1976); Note, Ancillary Relief in SEC Injunction Suits for Violation of
Rule 10b-5, 79 Harv. L. Rev. 656, 657-68 (1966); Note, Expert Legal Testimony, 97 Harv. L. Rev. 797, 800-03 (1984);
Note, Pleading Securities Fraud with Particularity Under Rule 9(b), 97 Harv. L. Rev. 1432, 1434-47 (1984); Paul M.
Barrett, Justices Deal Investors a Blow In Certain Suits, Wall St. J., Apr. 20, 1994, at A3; Dennis J. Block & Jonathan M.
Hoff, Damages Remedy of 12(2) And Class Actions, N.Y. L.J., Apr. 2, 1992, at 5; Edward Brodsky, Expert Testimony
In Securities Cases, N.Y. L.J., May 18, 1977, at 1; Judy Gotterer, Lawyer Testimony: Slow, Steady Growth, Legal
Times of Wash., Apr. 16, 1979, at 17; Linda Greenhouse, High Court Ruling Sharply Curbs Suits On Securities Fraud,
N.Y. Times, Apr. 20, 1994, at A1; Jonathan F. Mack, Class Certification of Common Law Claims In Securities Fraud
Actions, N.Y. L.J., Nov. 6, 1992, at 1; Claudia MacLachlan, High Court Hears Case on Private Securities Lawsuits, Nat'l
L.J., Dec. 13, 1993, at 17; Floyd Norris, A Victory for Accountants and Lawyers in Securities Fraud Cases, N.Y. Times,
Apr. 20, 1994, at C6; see, e.g., Reves v. Ernst & Young, 507 U.S. 170 (1993); Holmes v. Securities Investor Protection
Corp., 503 U.S. 258 (1992); H.J. Inc. v. Northwestern Bell Telephone, 492 U.S. 229 (1989); Agency Holding Corp. v.
Malley-Duff& Assoc., Inc., 483 U.S. 143 (1987); Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479 (1985); American
National Bank & Trust Co. v. Haroco, 473 U.S. 606 (1985). See generally Stoneridge Investment Partners, LLC v.
Scientific-Atlanta, Inc., 552 US 148 (2008); Central Bank of Denver v. First Interstate Bank of Denver, 511 U.S.
164 (1994); LOUIS LOSS & JOEL SELIGMAN, FUNDAMENTALS OF SECURITIES REGULATION Ch. 11D
(4th ed. 2001 & 2003 Supp.).
193
Private Securities Litigation Reform Act of 1995, Pub. L. No. 104-67, 109 Stat. 737.
194
Securities Litigation Uniform Standards Act of 1998, Pub. L. No. 105-353, 112 Stat. 3227.
195
See DAVID R. HERWITZ, ACCOUNTING FOR LAWYERS 125-26 (1980); LOUIS LOSS, FUNDAMENTALS
OF SECURITIES REGULATION 1051-72 (2d ed. 1988); Joseph I. Goldstein & Catherine Dixon, New Teeth for the
Public's Watchdog: The Expanding Role of the Independent Accountant in Detecting, Preventing, and Reporting
Financial Fraud, 44 Bus. Law. 439, 457-61 (1989); Lee Berton, How MiniScribe Got Its Auditor's Blessing On
Questionable Sales, Wall St. J., May 14, 1992, at A1; Lee Berton, Inventory Chicanery Tempts More Firms, Wall St. J.,
Dec. 14, 1992, at A1; Brent Bowers & Udayan Gupta, Shareholder Suits Beset More Small Companies, Wall St. J., Mar.
9, 1994, at B1; Edward Brodsky, Accountants' Liability To Investors Expanded, N.Y. L.J., Aug. 7, 1978, at 1; Gail D.
Cox, Unlimited Liability, Nat. L.J., Dec. 21, 1992, at 1; Milo Geyelin & Lee Berton, Accountants Assail Malpractice
Suits - While Assisting Them, Wall St. J., Aug. 12, 1993, at A1; The Law: Trouble for the Top, Forbes, Sept. 1, 1968, at
23; see, e.g., Touche, Ross & Co. v. SEC, 609 F.2d 570 (2d Cir. 1979); Herzfeld v. Laventhol, Krekstein, Horwath &
Horwath, 540 F.2d 27 (2d Cir. 1976).
196
See PAUL HOFFMAN, LIONS OF THE EIGHTIES 269-74 (1982); PAUL HOFFMAN, LIONS IN THE
STREET 161-71 (1973); ABA Statement of Policy Regarding Lawyers' Response to Auditors' Requests for
Information, 31 Bus. Law. 1709 (1976); Assn. of the Bar of N.Y. Report by Special Committee on Lawyers' Role in
Securities Transactions, 32 Bus. Law. 1879 (1977); Edward F. Donohue, Attorney Liability in the Preparation of
Securities Disclosure Documents: Limiting Liability in the Face of Expanded Duties, 18 Sec. Reg. L.J. 115, 115-21
(1990); James R. Doty, Regulatory Expectations Regarding the Conduct of Attorneys in the Enforcement of the
Federal Securities Laws: Recent Development and Lessons for the Future, 48 Bus. Law. 1543, 1543-65 (1993);
James J. Fuld, Lawyer's Responses to Auditors - Some Practical Aspects, 44 Bus. Law. 159, 159-66 (1988); James J.
Fuld, Lawyer's Standards and Responsibilities in Rendering Opinions, 33 Bus. Law. 1295, 1298-1316 (1978); James
J. Fuld, Legal Opinions in Business Transactions: An Attempt to Bring Some Order Out of Some Chaos, 28 Bus.
Law. 915, 940-44 (1973); Stuart C. Goldberg, Policing Responsibility of the Securities Bar: The Attorney-Client
Relationship and the Code of Professional Responsibility - Consideration for Expertising Securities Attorneys, 19
N.Y. L.F. 221, 221-45 (1973); Joseph L. Johnson, Jr., Note, Liability of Attorneys for Legal Opinions Under the
Federal Securities Laws, 27 B.C. L. Rev. 325, 326-30 (1986); William R. McLucas & Laurie Romanowich, SEC
Enforcement Proceedings Under Section 15(c)(4) of the Securities Exchange Act of 1934, 41 Bus. Law. 145, 149-67
(1985); Stephen R. Volk, Arthur N. Field & Joseph T. McLaughlin, Law Firm Policies and Procedures in an Era of
Increasing Responsibilities: Analysis of a Survey of Law Firms, 48 Bus. Law. 1567, 1567-81 (1993); Rush Loving,
Jr., How Cortes Randell Drained the Fountain of Youth, Fortune, Apr. 1970, at 94; Gail Sindell, Securities Lawyers
Watching Their Backs, Legal Times, Nov. 12, 1990, at 51; Sherry R. Sontag, Harder to Sue, Nat'l L.J., June 17,
1991, at 1; see, e.g., DiLeo v. Ernst & Young, 901 F.2d 624 (7th Cir. 1990); Adams v. Standard Knitting Mills, Inc.,
623 F.2d 422 (6th Cir.), cert. denied, 449 U.S. 1067 (1980); Meyerhofer v. Empire Fire & Marine Ins. Co., 497 F.2d
1190 (2d Cir. 1974); George C. Kern, Jr., SEC Securities Exchange Act Release No. 29,356 (June 21, 1991),
reprinted in 49 SEC DOCKET 422 (1991). See generally SEC v. National Student Marketing Corp., 457 F. Supp.
682 (D.D.C. 1978); William R. Carter, Sec. Ex. Act Rel. No. 17,597, 22 SEC Dock. 292 (1981).
197
198
See JAMES D. COX, ROBERT W. HILLMAN & DONALD C. LANGEVOORT, SECURITIES REGULATION
1095-1096 (1991).
200
See LOUIS LOSS & JOEL SELIGMAN, FUNDAMENTALS OF SECURITIES REGULATION 1109-1124 (3d ed.
1995).
201
15 U.S.C. 78g-78h, 78o (1988); Reg. G, 12 C.F.R. 207 (1990); Reg. T, 12 C.F.R. 220 (1990); Reg. U, 12
C.F.R. 221 (1990); Reg. X, 12 C.F.R. 224 (1990); 17 C.F.R. 240.10b-6 to .10b-8, 240.10b-13 (1990); see
DONNA S. CARPENTER & JOHN FELONI, THE FALL OF THE HOUSE OF HUTTON 99 (1989); WILLIAM
GREIDER, SECRETS OF THE TEMPLE 311-12 (1987); 6 LOUIS LOSS & JOEL SELIGMAN, SECURITIES
REGULATION 2965-76 (3d ed. 1990); CHRIS WELLES, THE LAST DAYS OF THE CLUB 242-245 (1975); T.G.
Callery & Anne H. Wright, NASD Disciplinary Proceedings - Recent Developments, 48 Bus. Law. 791, 791-839
(1993); Jeffry L. Davis, William C. Dale & James A. Overdahl, Using Finance Theory to Measure Damages in Cases
Involving Fraudulent Trade Allocation Schemes, 49 Bus. Law. 591, 597-610 (1994); Daniel R. Fischel & David J. Ross,
Should the Law Prohibit "Manipulation" in Financial Markets?, 105 Harv. L. Rev. 503, 507-42 (1991); William W.
Foshay, Market Activities of Participants in Securities Distributions, 45 Va. L. Rev. 907, 907-26 (1959); Fred N.
Gerard& Michael L. Hirschfeld, The Scienter Requirement Under Rule 10b-6, 46 Bus. Law. 777, 777-780 (1991);
Michael P. Jamroz, The Net Capital Rule, 47 Bus. Law. 863, 863-68 (1992); Robert L. Knauss, A Reappraisal of the
Role of Disclosure, 62 Mich. L. Rev. 607, 635-40 & n.136 (1964); Donald C. Langevoort, Information Technology and
the Structure of Securities Regulation, 98 Harv. L. Rev. 747, 751-54 (1985); William T. Lesh, Federal Regulation of
Over-the-Counter Brokers and Dealers in Securities, 59 Harv. L. Rev. 1237, 1244-1274 & n.27 (1946); David A. Lipton,
A Primer on Broker-Dealer Registration, 36 Cath. L. Rev. 899, 899-908 (1987); Henry F. Minnerop, The Role and
Regulation of Clearing Brokers, 48 Bus. Law. 841, 841-852 (1993); Art Detman, Can Ross Perot Change Wall Street?,
Dun's, Mar. 1973, at 46; Robert L. Frome, Registration of Employee Broker Dealer, N.Y. L.J., Oct. 27, 1988, at 3;
Roberta S. Karmel, Net Capital, Customer Protection Rule Revisions, N.Y. L.J., Dec. 19, 1985, at 1; Carol J. Loomis,
The Unbelievable Last Days of Hayden, Stone, Fortune, Jan. 1971, at 114; Rifka Rosenwein, In-housers Gain From Rise
In Securities Compliance Work, Manhattan Law., Mar. 1-7, 1988, at 1; Michael Siconolfi, Lehman Brothers Plans
Pretax Charge of $30 Million for Severance Payments, Wall St. J., Apr. 1, 1994, at A8; see, e.g., Miley v.
Oppenheimer& Co., 637 F.2d 318 (5th Cir. 1981); Arthur James Huff, SEC Securities Exchange Act Release No. 29,017
(Mar. 28, 1991), reprinted in 48 SEC DOCKET 10 (1991).
202
15 U.S.C. 78o(b)(8)-(9) (1988); see LOUIS LOSS, FUNDAMENTALS OF SECURITIES REGULATION 602-24
(2d ed. 1988); ROBERT C. POZEN, FINANCIAL INSTITUTIONS: INVESTMENT MANAGEMENT 50-57 (1978).
203
See The Penny Stock Scandal, Bus. Wk., Jan. 23, 1989, at 74.
204
See John C. Boland, Penny Dreadfuls, Barron's, Aug. 16, 1982, at 10. See generally Securities Enforcement
Remedies and Penny Stock Reform Act of 1990, Pub. L. No. 101-429, 104 Stat. 931; SEC v. First Jersey Securities,
Inc., 101 F.3d 1450 (2d Cir. 1996).
205
206
JOEL SELIGMAN, THE SEC AND THE FUTURE OF FINANCE 18 (1985); CHRIS WELLES, THE LAST
DAYS OF THE CLUB 284-86 (1975).
207
See Rhonda Brammer, The Abracadabra Man, Barron's, Mar. 16, 1987, at 6.
208
See Anthony De Toro, Market Manipulation of Penny Stocks, 17 Sec. Reg. L.J. 241, 245-46 (1989).
209
See JOHN BROOKS, ONCE IN GOLCONDA 75 (1969); Ann Hagedorn, Boiler Room Brokers Just Keep
Resurfacing, J.T. Moran Case Shows, Wall St. J., Apr. 26, 1990, at A1.
210
See PAUL HOFFMAN, THE DEALMAKERS 124-39 (1984); see also Constance Mitchell, Fast-Talking Brokers in
Little Rock Target Small City Treasuries, Wall St. J., Apr. 12, 1989, at A1.
212
See VINCENT P. CAROSSO, INVESTMENT BANKING IN AMERICA 127 & n.62 (1970); ROBERT SOBEL,
AMEX 15-16 (1972).
213
214
See EDWARD CHANCELLOR, DEVIL TAKE THE HINDMOST Ch. 10 (1999). See generally Carol J. Loomis,
The Bloomberg, Fortune, Apr. 23, 2007, at 60; Richard Stern & Jason Zweig, "A New Guy Can Do It Better",
Forbes, Nov. 25, 1991, at 122.
215
See Donald C. Langevoort, Fraud and Deception by Securities Professionals, 61 Tex. L. Rev. 1247, 1271-94 (1983);
Charity Scott, Caveat Vendor: Broker-Dealer Liability Under the Securities Exchange Act, 17 Sec. Reg. L.J. 274, 275-77
(1989); Roberta S. Karmel, Revisiting the Shingle, Fiduciary-Duty Theories, N.Y. L.J., Oct. 16, 1986, at 1.
216
See Note, Churning by Securities Dealers, 80 Harv. L. Rev. 869, 869-85 (1967); Richard A. Booth, New Churning
Cases Add Twist To Claims for Portfolio Damages, Nat'l L.J. June 24, 1991, at 34.
217
See Joseph I. Goldstein & L.D. Cox, Penny Stock Markups and Markdowns, 85 Nw. U.L. Rev. 676, 676-95 (1991);
Note, Insider Trading in Junk Bonds, 105 Harv. L. Rev. 1720, 1722-25 (1992); Roberta S. Karmel, Pegging Dealer
Profits, N.Y. L.J., Aug. 20, 1987, at 1.
218
See, e.g., Victor Brudney, Origins and Limited Applicability of the "Reasonable Basis" or "Know Your
Merchandise" Doctrine, in FOURTH ANNUAL INSTITUTE ON SECURITIES REGULATION 239, 247-49 (Robert
H. Mundheim, Arthur Fleischer, Jr. & John D. Schupper eds., 1973).
219
See, e.g., Martin Lipton, The Customer Suitability Doctrine, in FOURTH ANNUAL INSTITUTE ON SECURITIES
REGULATION 273, 275-81 (Robert H. Mundheim, Arthur Fleischer, Jr. & John D. Schupper eds., 1973).
220
221
See Ralph C. Ferrara & Diane Sanger, Derivitive Liability in Securities Law: Controlling Person Liability,
Respondeat Superior, and Aiding and Abetting, 40 Wash. & Lee L. Rev. 1007, 1007-29 (1983).
222
See Lewis D. Lowenfels & Alan R. Bromberg, Securities Industry Arbitrations: An Examination and Analysis, in 3
SELECTED ARTICLES ON FEDERAL SECURITIES LAW 137, 138-164 (Franklin E. Gill ed., 1991); Michael
McGowan, See You in Arbitration, 79 A.B.A. J. 110 (May 1993); Brigid McMenamin, Friends of the Shafted, Forbes,
Apr. 26, 1993, at 185; Rob Rossi, Brokers, Attorneys Try to Curb 'Claims Advisers', Legal Times, Nov. 22, 1993, at 4;
Michael Siconolfi, Stock Investors Win More Punitive Awards In Arbitration Cases, Wall St. J., June 11, 1990, at A1.
See generally Rodriguez de Quijas v. Shearson American Express, Inc., 490 U.S. 477 (1989); Shearson/American
Express, Inc. v. McMahon, 482 U.S. 220 (1987).
223
15 U.S.C. 80b-2(a)(11) (1988); see 1 TAMAR FRANKEL, THE REGULATION OF MONEY MANAGERS 14968 (1978).
224
See ROBERT C. POZEN, FINANCIAL INSTITUTIONS: INVESTMENT MANAGEMENT 260-78 (1978); see
also Robert C. Pozen, Money Managers and Securities Research, 51 N.Y.U. L. Rev. 923, 923-28 (1976). See generally
Lowe v. SEC, 472 U.S. 181 (1985); Transamerica Mortg. Advisors, Inc. (TAMA) v. Lewis, 444 U.S. 11 (1979);
SEC v. Capital Gains Research Bureau, 375 U.S. 180 (1963).
225
See Roberta S. Karmel, Trends in Investment Adviser Regulation, N.Y. L.J., Apr. 18, 1985, at 1.
226
227
See INVESTMENT PARTNERSHIPS AND "OFFSHORE" INVESTMENT FUNDS 410-12 (Douglas W. Hawes
ed., 1969).
228
See Robert C. Hacker & Ronald D. Rotunda, SEC Registration of Private Investment Partnerships after Abrahamson
v. Fleschner, 78 Colum. L. Rev. 1471, 1476-81 (1978).
229
230
231
See 1 TAMAR FRANKEL, THE REGULATION OF MONEY MANAGERS 175 (1978 & Supp. 1989).
232
See LOUIS LOSS, FUNDAMENTALS OF SECURITIES REGULATION 675 & n.14 (2d ed. 1988 & Supp. 1990).
233
See JOEL SELIGMAN, THE TRANSFORMATION OF WALL STREET 487 (1982); ROY C. SMITH, THE
MONEY WARS 76 (1990); Robert C. Clark, The Four Stages of Capitalism: Reflections on Investment Management
Treatises, 94 Harv. L. Rev. 561, 564 & n. 9 (1981); see also SEC, INSTITUTIONAL INVESTOR STUDY REPORT,
H.R. DOC. NO. 92-64, 92d Cong., 1st Sess., at 58-59 (1971); JOHN TRAIN, THE MONEY MASTERS 46-47 (1980);
JOHN TRAIN, THE NEW MONEY MASTERS 175-77 (1989); Donald C. Langevoort, Information Technology and
the Structure of Securities Regulation, 98 Harv. L. Rev. 747, 771 & n.104 (1985).
234
See BRUCE WASSERSTEIN, BIG DEAL 67 (1998); RAJ K. BHALA, FOREIGN BANK REGULATION
AFTER BCCI 39-40 (1994); JAMES J. FISHMAN, THE TRANSFORMATION OF THREADNEEDLE STREET
29 (1993).
235
236
See CHRIS WELLES, THE LAST DAYS OF THE CLUB 38 (1975); Robert C. Clark, The Four Stages of
Capitalism: Reflections on Investment Management Treatises, 94 Harv. L. Rev. 561, 566-67 & n. 19 (1981).
237
See BENJAMIN GRAHAM, DAVID L. DODD & SIDNEY COTTLE 65 (4th ed. 1962); Robert C. Clark, The Four
Stages of Capitalism: Reflections on Investment Management Treatises, 94 Harv. L. Rev. 561, 564 & n. 8 (1981).
238
See VICTOR BRUDNEY & MARVIN A. CHIRELSTEIN, CORPORATE FINANCE 58-113 (3d ed. 1987); JACK
C. FRANCIS, INVESTMENTS 311 (2d ed. 1976); A.A. Sommer, Jr., Book Review, 93 Harv. L. Rev. 1595, 1599-1601
(1980) (reviewing HOMER KRIPKE, THE SEC AND CORPORATE DISCLOSURE: REGULATION IN SEARCH
OF A PURPOSE (1979)).
239
240
241
242
243
244
See BENJAMIN GRAHAM, DAVID L. DODD & SIDNEY COTTLE 194-238 (4th ed. 1962); see also JOHN
BROOKS, THE TAKEOVER GAME 85-86 (1987); Note, Valuation of Dissenters' Stock Under Appraisal Statutes, 79
Harv. L. Rev. 1453, 1456-71 (1966).
245
246
See SEC, INSTITUTIONAL INVESTOR STUDY REPORT, H.R. DOC. NO. 92-64, 92d Cong., 1st Sess., at 27712774 (1971); MOIRA JOHNSTON, TAKEOVER 232-35 (1986); LOUIS NIZER, MY LIFE IN COURT 427-428
(1961); 1 SHARK REPELLANTS AND GOLDEN PARACHUTES: A HANDBOOK FOR THE PRACTITIONER 34 (Robert H. Winter, Mark H. Stumpf & Gerard L. Hawkins eds., 1991); Arthur Fleischer, Jr. & Robert H. Mundheim,
Corporate Acquisition by Tender Offer, 115 U. Pa. L. Rev. 317, 317-38 (1967); Note, Cash Tender Offers, 83 Harv. L.
Rev. 377, 377-88 (1969).
247
See GEORGE ANDERS, MERCHANTS OF DEBT 109-10 (1992); RICHARD M. CLURMAN, TO THE END OF
TIME 236-37 (1992); Peter Petre, Merger Fees That Bend the Mind, Fortune, Jan. 20, 1986, at 18; Randall Smith, In
Failed Bid for UAL, Lawyers and Bankers Didn't Fail to Get Fees, Wall St. J., Nov. 30, 1989, at A1.
248
See William S. Rukeyser, Getting Tough with Tenders, Fortune, Aug. 1967, at 108.
249
See PAUL HOFFMAN, THE DEALMAKERS 141-59 (1984); PAUL HOFFMAN, LIONS OF THE EIGHTIES
176-96 (1982); JAMES B. STEWART, THE PARTNERS 245-82 (1983); Joseph H. Flom, The Role of the Takeover in
the American Economy, 32 Bus. Law. 1299, 1299-1300 (1977). See generally LAWRENCE LEDERMAN,
TOMBSTONES 122-123 (1992); ANTHONY BIANCO, RAINMAKER 127-134 (1991).
250
See RICHARD PHALON, THE TAKEOVER BARONS OF WALL STREET 240 (1981); James H. Fogelson,
Joanne R. Wenig & Brian P. Friedman, Changing the Takeover Game: The SEC's Proposed Amendments to the
Williams Act, 17 Harv. J. on Legis. 409, 410-12, 438-40, 459-63 (1980).
251
252
See Lucien A. Bebchuck, Toward Undistorted Choice and Equal Treatment in Corporate Takeovers, 98 Harv. L. Rev.
1693, 1742-44 (1985); Ida C. Wurczinger, Note, Toward a Definition of "Tender Offer", 19 Harv. J. on Legis. 191, 19194, 197-205, 210-12 (1982); Roundtable Discussion: Takeovers, Wall St. Transcript, Nov. 2, 1981, at 63,470.
253
255
256
257
258
See SAMUEL L. HAYES III & PHILIP M. HUBBARD, INVESTMENT BANKING: A TALE OF THREE CITIES
131-33 (1990); Connie Bruck, Kamikaze, Am. Law., Dec. 1985, at 75; Craig Forman, A Hot New Export To Europe
Takes Hold: The Hostile Takeover, Wall St. J., Apr. 19, 1988, at 1.
259
See MOIRA JOHNSTON, TAKEOVER 145-47 (1986); Power On Wall Street, Bus. Wk., July 7, 1986, at 56;
Randall Smith, How Drexel Wields Its Power in Market For High-Yield Bonds, Wall St. J., May 26, 1988, at 1.
260
See Roberta S. Karmel, Applying Margin Rules To Junk Bonds, N.Y. L.J., Feb. 20, 1986, at 1; James B. Stewart &
Rhonda L. Rundle, Drexel Burnham Mulls A Future Threatened By Junk-Bond Curbs, Wall St. J., Dec. 13, 1985, at 1;
John D. Williams, How 'Junk Financings' Aid Corporate Raiders In Hostile Acquisitions, Wall St. J., Dec. 6, 1984, at 1.
See generally HENRY HANSMANN, THE OWNERSHIP OF ENTERPRISE 64-65 (1996).
261
262
263
264
See ALLAN SLOAN, THREE PLUS ONE EQUALS BILLIONS 139-41 (1983).
265
See VICTOR BRUDNEY & MARVIN A. CHIRELSTEIN, CORPORATE FINANCE 677-79 (3d ed. 1987);
THOMAS PETZINGER, JR., OIL & HONOR 125-253 (1987); James B. Stewart & Daniel Hertzberg, Investment
Bankers Feed a Merger Boom And Pick Up Fat Fees, Wall St. J., Apr. 2, 1986, at 1.
266
See BRYAN BURROUGH & JOHN HELYER, BARBARIANS AT THE GATE 205-08 (1990); see also Ronald J.
Gilson & Reinier H. Kraakman, The Mechanisms of Market Efficiency, 70 Va. L. Rev. 549, 554-88 (1984).
267
268
See JOHN BROOKS, THE TAKEOVER GAME 141-44 (1987); KENNETH M. DAVIDSON, MEGAMERGERS
32-41 (1985); RICHARD PHALON, THE TAKEOVER BARONS OF WALL STREET 125-39 (1981); Kim Masters,
Arbs' Counsel Keep Sharp Eye on Battle, Legal Times of Wash., Dec. 7, 1981, at 1; Richard Vilkin, Advising Risk
Arbitraguers Challenges M&A Lawyers, Legal Times of Wash., June 1, 1981, at 28.
269
See 1 MARTIN LIPTON & ERICA H. STEINBERGER, TAKEOVERS & FREEZEOUTS 1.06[4], at 1-40 to 1-49
(1992); William Meyers, How Ron Perelman Became The Richest Man In America, Institutional Inv., May 1989, at 140.
270
See RON CHERNOW, THE HOUSE OF MORGAN 600-01 (1990); ADAM SMITH, THE ROARING EIGHTIES
193-99 (1988).
271
See JOHN TAYLOR, STORMING THE MAGIC KINGDOM 112-37 (1987). See generally Kamerman v.
Steinberg, 891 F.2d 424 (1989).
272
See Note, Preferred Greenmail: Targeted Stock Repurchases and the Management-Entrenched Hypothesis, 98 Harv.
L. Rev. 1045, 1045-47 (1985).
273
See GEORGE ANDERS, MERCHANTS OF DEBT 9 (1992); SARAH BARTLETT, THE MONEY MACHINE 42
(1991); RICHARD M. CLURMAN, TO THE END OF TIME 49-50 (1992); ROBERT LENZNER, THE GREAT
GETTY 223-28 (1986); DAVID MCCLINTIC, INDECENT EXPOSURE 96-110 (1982); RUSSELL MILLER, THE
HOUSE OF GETTY 334-45 (1986); WILLIAM SHAWCROSS, MURDOCH 134-39 (1993); SYDNEY L. STERN &
TED SCHOENHAUS, TOYLAND 258-60 (1990); ANDREW TOBIAS, THE FUNNY MONEY GAME 34-37 (1971);
see, e.g., Stanley H. Brown, Dr. Hammer's Magic Tingle, Fortune July 1968, at 98; Getty Oil: The House That J. Paul
Built, Forbes, Mar. 1, 1974, at 30; Look Who's Playing with Toys, Forbes, Dec. 15, 1971, at 22; John McDonald, J. Paul
Getty's Changed Plans, Fortune, Dec. 1967, at 108; Meshulam Riklis: The Power, the Profit and the Glory, Forbes, Mar.
15, 1971, at 24; Occidental Petroleum: Lucky Like a Fox, Forbes, June 1, 1968, at 24; Randall Smith, Merger Activity
Falls for Fourth Straight Year But Some Say the Worst Is Finally Over, Wall St. J., Jan. 4, 1993, at R8; Shawn Tully,
The Man Who Scored in Cola-Columbia, Fortune, Feb. 22, 1982, at 73. See generally Arthur In Paley-Land, Forbes,
May 1, 1975, at 20; Revlon After Revson, Forbes, Sept. 15, 1975, at 26; The Gilt-Edged Profession, Forbes, Sept. 15,
1971, at 30; The Movies: Why Everyone Wants In, Forbes, Dec. 15, 1967, at 22.
274
See JOSEPH R. DAUGHEN & PETER BINZEN, THE WRECK OF THE PENN CENTRAL 242-51 (1971); ROY
C. SMITH, THE MONEY WARS 314-17 (1990); Joann S. Lublin & Craig Forman, Europe's Merger Boom Triggers an
Invasion By U.S. Deal Makers, Wall St. J., Aug. 23, 1989, at A1.
275
See ROY C. SMITH, THE MONEY WARS 89-90 (1990); James C. Freund & Robert L. Easton, The Three-Piece
Suitor: An Alternate Approach to Negotiated Corporate Acquisitions, 34 Bus. Law. 1679, 1684-87 (1979); see also
Laurie M. Grossman & Gabriella Stern, Blockbuster to Buy Controlling Stake In Spelling in Swap, Wall St. J., Mar. 9,
1993, at B10; Lawrence Rout, A Risk Arbitrageur Plays Dangerous Game Of Betting on Mergers, Wall St. J., Feb. 22,
1979, at 1.
276
See ROBERT C. CLARK, CORPORATE LAW 10.23, at 413-14 (1986); RONALD J. GILSON, THE LAW AND
FINANCE OF CORPORATE ACQUISITIONS 26-28 (1987).
277
SEC Securities Act Release No. 5316 (Oct. 6, 1972); see Edward F. Greene & James J. Junewitz, A Reappraisal of
Current Regulation of Mergers and Acquisitions, 132 U. Pa. L. Rev. 647, 649-77 (1984).
278
See Leib Orlanski, Going Public Through the Backdoor and the Shell Game, 58 Va. L. Rev. 1451, 1451-85 (1972).
279
280
See RICHARD W. JENNINGS & HAROLD MARSH, JR., SECURITIES REGULATION 451-52 (6th ed. 1987).
281
See Anthony De Toro, Market Manipulation of Penny Stocks, 17 Sec. Reg. L.J. 241, 242-43 (1989).
282
See Anthony De Toro, Market Manipulation of Penny Stocks, 17 Sec. Reg. L.J. 241, 242-43 & n.10 (1989).
283
See LOUIS LOSS, FUNDAMENTALS OF SECURITIES REGULATION 708 & n.27 (2d ed. 1988).
284
See Louis Loss, Teaching the Regulatory Aspects of Corporate Finance, Harv. L. Sch. Bull., Dec. 1953, at 3; see also
DIANA B. HENRIQUES, FIDELITY'S WORLD Ch. 6 (1995); KURT EICHENWALD, SERPENT ON THE
ROCK Ch.14 (1995); G.W. MILLER, TOY WARS Ch. 3 (1998); HILARY ROSENBERG, THE VULTURE
INVESTORS Ch.1 (1992). See generally LOUIS LOSS, ANECDOTES OF A SECURITIES LAWYER 219-249
(1995).
285
See, e.g., JOEL SELIGMAN, THE TRANSFORMATION OF WALL STREET 561-62 (1982).
286
See DETLEV F. VAGHTS, BASIC CORPORATION LAW 731-32 (2d ed. 1979).
287
See, e.g., What Are Earnings? The Growing Credibility Gap, Forbes, May 15, 1967, at 28.
288
See DAVID R. HERWITZ, BUSINESS PLANNING 782-95 (1966); DAVID R. HERWITZ, BUSINESS
PLANNING 720-33 (Temp. 2d ed. 1984).
289
See VICTOR BRUDNEY & MARVIN A. CHIRELSTEIN, CORPORATE FINANCE 594-618 (3d ed. 1987).
290
See RONALD J. GILSON, THE LAW AND FINANCE OF CORPORATE ACQUISITIONS 258-86 (1987).
291
26 U.S.C. 351, 354, 357-358, 361, 368 (1986); see BORIS I. BITTKER & JAMES S. EUSTICE, FEDERAL
INCOME TAXATION OF CORPORATIONS AND SHAREHOLDERS 14.30-14.35, at 14-92 to 14-125 (4th ed.
1979); VICTOR BRUDNEY & MARVIN A. CHIRELSTEIN, CORPORATE FINANCE 620-25 (3d ed. 1987).
292
See BORIS I. BITTKER & JAMES S. EUSTICE, FEDERAL INCOME TAXATION OF CORPORATIONS AND
SHAREHOLDERS 14.10-14.35, at 14-16 to 14-91 (4th ed. 1979); DAVID R. HERWITZ, BUSINESS PLANNING
801-35 (1966); DAVID R. HERWITZ, BUSINESS PLANNING 739-806 (Temp. 2d ed. 1984); RONALD J. GILSON,
THE LAW AND FINANCE OF CORPORATE ACQUISITIONS 449-98 (1987).
293
See WILLIAM L. CARY, CORPORATIONS 10-11 (4th ed. unabridged 1969); see, e.g., Robert C. Clark, The Four
Stages of Capitalism: Reflections on Investment Management Treatises, 94 Harv. L. Rev. 561, 563 & n.5 (1981).
294
See WILLIAM L. CARY, CORPORATIONS 9-10 (4th ed. unabridged 1969); MOIRA JOHNSTON, TAKEOVER
261-62 (1986); LOUIS NIZER, MY LIFE IN COURT 496-523 (1961).
295
Del. Code Ann. tit. 8, 251, 259, 261-262 (1974); see RONALD J. GILSON, THE LAW AND FINANCE OF
CORPORATE ACQUISITIONS 501-57 (1987); DETLEV F. VAGHTS, BASIC CORPORATION LAW 74-75 (2d ed.
1979).
296
See DETLEV F. VAGHTS, BASIC CORPORATION LAW 714-15 (2d ed. 1979).
297
See VICTOR BRUDNEY & MARVIN A. CHIRELSTEIN, CORPORATE FINANCE 668-805 (3d ed. 1987);
DETLEV F. VAGHTS, BASIC CORPORATION LAW 751-75 (2d ed. 1979); see, e. g., Paramount Communications,
Inc. v. QVC Network, Inc., 637 A.2d 34 (Del. 1994); Cede & Co v. Technicolor, Inc., 634 A.2d 345 (Del. 1993); In re
Tri-Star Pictures, Inc. Litigation, 634 A.2d 319 (Del. 1993); Paramount Communications, Inc. v. Time, Inc., 571 A.2d
1140 (Del. 1989); Revlon v. MacAndrews & Forbes Holdings, 506 A.2d 173 (Del. 1986); Smith v. Van Gorkom, 488
A.2d 858 (Del. 1985); Weinberger v. UOP, Inc., 457 A.2d 701 (Del. 1983); Singer v. Magnavox, 380 A.2d 969 (Del.
1977).
298
See VICTOR BRUDNEY & MARVIN A. CHIRELSTEIN, CORPORATE FINANCE 647-68 (3d ed. 1987); Victor
Brundy & Marvin A. Chirelstein, Fair Shares in Corporate Mergers and Takeovers, 88 Harv. L. Rev. 297, 304-07 & nn.
19-20 (1974); James Vorenberg, Exclusiveness of the Dissenting Shareholder's Appraisal Right, 77 Harv. L. Rev. 1189,
1199 & nn.35-36 (1964).
299
See, e.g., WILLIAM L. CARY, CORPORATIONS 868-1007 (4th ed. unabridged 1969); Victor Brudney, The
Independent Director - Heavenly City or Potemkin Village?, 95 Harv. L. Rev. 597, 607-31 & nn.50-51, 85 & 87 (1982).
300
See, e.g., WILLIAM L. CARY, CORPORATIONS 1008-20 (4th ed. unabridged 1969); Carol J. Loomis, A Squeeze
on the Directors, Fortune, May 15, 1969, at 120.
301
See Robert J. Giuffra, Jr., Note, Investment Bankers Fairness Opinions in Corporate Control Transactions, 96 Yale
L.J. 119, 137-139 & n.104 (1986); see also EUGENE F. BRIGHAM & LOUIS C. GAPENSKI, FINANCIAL
MANAGEMENT 233-267 (8th ed. 1997).
302
See, e.g., PAUL HOFFMAN, LIONS OF THE EIGHTIES 1-25 (1982); JAMES B. STEWART, THE PARTNERS
53-113 (1983).
303
See JOHN BROOKS, THE TAKEOVER GAME 261 (1987); RONALD J. GILSON, THE LAW AND FINANCE
OF CORPORATE ACQUISITIONS 1079-94 (1987).
304
305
See KEN AULETTA, GREED AND GLORY ON WALL STREET 11-14 (1986).
306
307
See, e.g., SEC, REPORT OF SPECIAL STUDY OF SECURITIES MARKETS, H.R. DOC. NO. 95, 88th Cong., 1st
Sess., pt. 1, at 514-516 (1963); JOHN BROOKS, THE TAKEOVER GAME 67-69 (1987); KIM I. EISLER, SHARK
TANK 38 (1990); MICHAEL C. JENSEN, THE FINANCIERS 24-37 (1976); MICHAEL S. MALONE, GOING
PUBLIC 16-25 (1991); STEPHEN MANES & PAUL ANDREWS, GATES 301-07 (1993); JOSEPH WECHSBERG,
THE MERCHANT BANKERS 243-44 (1966); Daniel J. McCauley, Jr., The Securities Laws - After 40 Years: A Need
For Rethinking, 48 Notre Dame Law. 1092, 1098-1100 (1973); John C. Boland, High-Flying Fledglings, Barron's, Dec.
13, 1982, at 8; Rhonda Brammer, Outpour of Offerings, Barron's, June 27, 1983, at 13; Sara Calian, IPOs Raise a Record
$39.4 Billion for '92, Wall St. J., Jan. 4, 1993, at C1; Thomas N. Cochran, Year of the IPO, Barron's, Jan. 4, 1993, at 20;
Golden Eggs? Or Lemons?, Forbes, July 15, 1969, at 24; Arthur M. Louis, The Fastest Richest Texan Ever, Fortune,
Nov. 1968, at 168; Gene C. Marcial, Ripe Young Stocks, Ready For the Picking, Bus. Wk., Dec. 30, 1991/Jan. 6, 1992,
at 76.
308
See, e.g., JOHN BROOKS, THE GO-GO YEARS 1-14 (1973); ADAM SMITH, PAPER MONEY 271-73 (1981);
Fred R. Bleakley, A Decade of Debt Is Now Giving Way To the Age of Equity, Wall St. J., Dec. 16, 1991, at A1;
Laurence J. DeMaria, Stocks Plunge 508 Points, A Drop of 22.6%; 604 Million Volume Nearly Doubles Record, N.Y.
Times, Oct. 20, 1987, at A1; Laurence J. DeMaria, Stocks Widely Battered Again But The Dow Rises By 102 As
Biggest Issues Find Buyers, N.Y. Times, Oct. 21, 1987, at A1; Roberta S. Karmel, Black Monday, N.Y. L.J., Dec. 17,
1987, at 1; Cary Reich, Apocalypse Now?, Institutional Inv., Nov. 1987, at 79; Richard E. Rustin & George Getschow,
New-Issue Stock Boom Nears a Danger Point, Some Regulators Warn, Wall St. J., Nov. 21, 1980, at 1; James B. Stewart
& Daniel Hertzberg, How the Stock Market Died and Rose Again A Day After the Crash, Wall St. J., Nov. 20, 1987, at
A1.
309
See ARTHUR M. BORDEN, GOING PRIVATE 1.02, at 1-3 (1991); Note, Going Private, 84 Yale L.J. 903, 90311 (1975).
310
See ARTHUR M. BORDEN, GOING PRIVATE 1.07, at 1-8 to 1-14 & nn.6 & 14 (1991); Arthur M. Borden,
Going Private - Old Tort, New Tort or No Tort?, 49 N.Y.U. L. Rev. 987, 987-1020 (1974).
311
See SARAH BARTLETT, THE MONEY MACHINE 45-47 (1991); Robert L. Frome, SEC Takes Position On
Leveraged Buy-Outs, N.Y. L.J., Apr. 5, 1979, at 1; John D. Williams, King of the Buyouts, Kohlberg Kravis Helps Alter
Corporate U.S., Wall St. J., Apr. 11, 1986, at 1.
312
See VICTOR BRUDNEY & MARVIN A. CHIRELSTEIN, CORPORATE FINANCE 437-64 (3d ed. 1987).
313
314
See JOHN BROOKS, THE GO-GO YEARS 153-58 (1973); see also Wendy Bounds, Kodak to Sell Sterling
Winthrop Drug And Two Other Units to Focus on Film, Wall St. J., May 4, 1994, at A3; William M. Bulkeley,
Conglomerates Make A Surprising Comeback - With a '90s Twist, Wall St. J., Mar. 1, 1994, at A1; Christina Duff,
Kmart to Sell PayLess to Firm For $1 Billion, Wall St. J., Nov. 1, 1993, at A3; Daniel Pearl & Gautam Naik, GeorgiaPacific Signs Letter of Intent To Sell Butler Paper to Alco Standard, Wall St. J., Mar. 16, 1993, at A7; Anita Sharp,
Flagstar Plans to Sell Most of Canteen To Compass for $450 Million; End Loss, Wall St. J., Apr. 28, 1994, at A3.
315
316
See William T. Allen, Independent Directors In MBO Transactions: Are They Fact or Fantasy?, 45 Bus. Law. 2055,
2055-56 (1990); Carl Ferenbach, L.B.O.s: A New Capital Market (And How to Cope With It), Mergers & Acquisitions,
Fall 1983, at 21.
317
See SARAH BARTLETT, THE MONEY MACHINE 157-69 (1991); Stephen R. Waite & Martin S. Fridson, Do
Leveraged Buyouts Pose Major Credit Risks?, Mergers & Acquisitions, July-Aug. 1989, at 43.
318
See G.C. Hill & John D. Williams, Leveraged Purchases Of Firms Keep Gaining Despite Rising Risks, Wall St. J.,
Dec. 29, 1983, at 1; Allan Sloan, Luring Banks Overboard?, Forbes, April 9, 1984, at 39.
319
See JOHN BROOKS, THE TAKEOVER GAME 207-08 (1987); Note, Distress-Contingent Convertible Bonds: A
Proposed Solution to the Excess Debt Problem, 104 Harv. L. Rev. 1857, 1857 & n.2 (1991).
320
See SARAH BARTLETT, THE MONEY MACHINE 253 (1991); Richard Lieb, Junk Bond Holders Face
Bankruptcy Risk, N.Y. L.J., Dec. 4, 1989, at 44; Constance Mitchell, Junk Bond Issuance Posts a Strong Rebound,
Partly Reflecting Late 1991 Good Performance, Wall St. J., Jan. 4, 1993, at R36; Patrick M. Reilly, Ralph Ingersoll
Finds Newspapers Are Fun, Junk Bonds Are Not, Wall St. J., Mar. 26, 1990, at A1.
321
See Note, Distress-Contingent Convertible Bonds: A Proposed Solution to the Excess Debt Problem, 104 Harv. L.
Rev. 1857, 1858 & n.8, 1866, 1877 (1991); Ford S. Worthy, The Coming Defaults in Junk Bonds, Fortune, Mar. 16,
1987, at 26.
322
See CONNIE BRUCK, THE PREDATOR'S BALL 27-39 (1988); JAMES B. STEWART, DEN OF THIEVES 4547 (1991); Janet Bush & Anatole Kaletsky, When the Junk Heap Topples, Fin. Times, Feb. 14, 1990, at I26; John Liscio,
The Buyout Bubble, Barron's, Oct. 31, 1988, at 6; see also Nick Gilbert, A Closer Look at First Executive, Fin. World,
May 5, 1987, at 22.
323
See 1 ARTHUR FLEISCHER, JR., TENDER OFFERS: DEFENSES, RESPONSES, AND PLANNING 3-65
(1983); 1 SHARK REPELLANTS AND GOLDEN PARACHUTES: A HANDBOOK FOR THE PRACTITIONER 59 (Robert H. Winter, Mark H. Stumpf & Gerard L. Hawkins eds., 1991); Michael Bradley & Michael Rosenzweig,
Defensive Stock Repurchases, 99 Harv. L. Rev. 1377, 1378-84 (1986); Note, Protecting Shareholders Against Partial
and Two-Tiered Takeovers: The "Poison Pill", 97 Harv. L. Rev. 1964, 1964-68 (1984); see, e.g., Field v. Trump, 850
F.2d 938 (2d Cir. 1988), cert. denied, 489 U.S. 1012 (1989); Chromalloy Am. Corp. v. Sun Chem. Corp., 611 F.2d 240
(8th Cir. 1979); Smallwood v. Pearl Brewing Co., 489 F.2d 579 (5th Cir.), cert. denied, 419 U.S. 873 (1974); Applied
Digital Data Sys. Inc. v. Milgo Elec. Corp., 425 F. Supp. 1145 (S.D.N.Y. 1977).
324
See ROBERT C. CLARK, CORPORATE LAW 3.4, at 123-25& nn.3-4 (1986); Maurice A. Hartnett, III, The
History of the Delaware Court of Chancery, 48 Bus. Law. 367, 367-70 (1992); E.N. Veasey, The National Court of
Excellence, 48 Bus. Law. 357, 357-58 (1992); William Meyers, Showdown In Delaware: The Battle To Shape Takeover
Law, Institutional Inv., Feb. 1989, at 64.
325
See, e.g., R.F. Balotti & James J. Hanks, Rejudging the Business Judgment Rule, 48 Bus. Law. 1337, 1337-52
(1993); Charles Hansen, The Duty of Care, the Business Judgment Rule, and The American Law Institute Corporate
Governance Project, 48 Bus. Law. 1355, 1355-74 (1993); Paul M. Bernstein, Something for Everyone In Cash Out
Merger, N.Y. L.J., Mar. 22, 1983, at 1; Karen Donovan, Corporate Directors Take Beating From Del. Supreme Court,
Nat'l L.J., Dec. 27, 1993/Jan. 3, 1994, at 17; James C. Freund & Rodman Ward, Jr., What's 'In,' 'Out' in Takeovers In
Wake of Paramount v. Time, Nat'l L.J., Mar. 26, 1990, at 22; E.P. Welch & A.J. Turezyn, Courts Took Quick Action in
Paramount, Nat'l L.J., Jan. 10, 1994, at 20. See generally Curtis Hearn & Walter Baus, Director Liability and the Use of
Advisory Directors, 10 La. Corp. Newsl. No. 2 (La. St. B. Ass'n Sec. on Corp. & Bus. L., New Orleans, La.), Fall 1986.
326
See RONALD J. GILSON, THE LAW AND FINANCE OF CORPORATE ACQUISITIONS 1073-78 (1987).
328
See Donald C. Langevoort, Comment, The Supreme Court and the Politics of Corporate Takeovers: A Comment on
CTS Corp. v. Dynamics Corp. of America, 101 Harv. L. Rev. 96, 97 & n.7 (1987).
329
See 5 LOUIS LOSS & JOEL SELIGMAN, SECURITIES REGULATION 2123-2309 (3d ed. 1990).
330
See Thomas L. Hazen, State Anti-Takeover Legislation: The Second and Third Generations, 23 Wake Forest L. Rev.
77, 77-88 (1988); Evelyn Sroufe & Catherine Gelband, Business Combination Statutes: A "Meaningful Opportunity" for
Success?, 45 Bus. Law. 891, 891-93 (1990); Barbara Franklin, Shifting Fight To the States On Hostile Bids, Nat'l L.J.,
Sept. 25, 1989, at 1. See generally CTS Corp. v. Dynamics Corp. of America, 481 U.S. 69 (1987); Edgar v. Mite
Corp., 457 U.S. 624 (1982).
331
See, e.g., ADAM SMITH, THE ROARING EIGHTIES 214-20 (1988); MARK STEVENS, THE INSIDERS 11-22,
117-21 (1987); R.F. WINANS, TRADING SECRETS 299-311 (1986); James B. Stewart & Daniel Hertzberg, Secret
Dealing Helped Paul Bilzerian Make Takeover Bids Work, Wall St. J., May 19, 1988, at 1.
332
See CONNIE BRUCK, THE PREDATOR'S BALL 317-53 (1988); PAUL HOFFMAN, LIONS OF THE
EIGHTIES 278-81 (1982); Roberta S. Karmel, Defining Insider Trading, N.Y. L.J., Oct. 15, 1987, at 1.
333
See, e.g., JOHN BROOKS, BUSINESS ADVENTURES 118-44 (1969); RON CHERNOW, THE HOUSE OF
MORGAN 562-67 (1990); RICHARD W. JENNINGS & HAROLD MARSH, JR., SECURITIES REGULATION
1044-56 (6th ed. 1987); Victor Brundy, Insiders, Outsiders, and Informational Advantages Under the Federal
Securities Laws, 93 Harv. L. Rev. 322, 322-39 (1979); Alan M. Weinberger, Preventing Insider Trading Violations:
A Survey of Corporate Compliance Programs, 18 Sec. Reg. L.J. 180, 182-85 (1990); James B. Stewart & Daniel
Hertzberg, Small Securities Firm Links Drexel's Milken, Goldman's Freeman, Wall St. J., Apr. 6, 1988, at 1.
334
See DAVID L. RATNER, SECURITIES REGULATION 614-16 (3d ed. 1986); JAMES B. STEWART, DEN OF
THIEVES 234-52 (1991); Stuart J. Kaswell, An Insider's View of the Insider Trading and Securities Fraud Enforcement
Act of 1988, 45 Bus. Law. 145, 152-71 (1989); David E. Brodsky, Result In Chestman Sends Mixed Message, Nat'l L.J.,
Dec. 30, 1991-Jan. 6, 1992, at 21; Linda Himelstein, Cleaning Up After SEC Crackdown, Legal Times, May 28, 1990, at
1; Roberta S. Karmel, A Decade of Greed, N.Y. L.J., Mar. 1, 1990, at 3; Harvey Pitt & Karl Groskaufmanis, 2nd
Circuit's Recent Insider-Trading Decision Invites Legislative Fix, Legal Times, May 21, 1990, at 25; David Snouffer,
HLS Professors Analyze Boesky Scandal, Harv. L. Rec., Jan. 15, 1987, at 2; see, e.g., United States v. Carpenter, 484
U.S. 19 (1987); Moss v. Morgan Stanley, Inc., 719 F.2d 5 (2d Cir. 1983), cert. denied, sub nom. Moss v. Newman, 465
U.S. 1025 (1984); United States v. Newman, 664 F.2d 12 (2d Cir. 1981), cert. denied, 464 U.S. 863 (1983); Zweig v.
Hearst Corp., 594 F.2d 1261 (9th Cir. 1979).
335
See LOUIS L. JAFFE & NATHANIEL L. NATHANSON, ADMINISTRATIVE LAW 546-550 (3d ed. 1968).
336
See Martin Lipton & Robert B. Mazur, The Chinese Wall Solution to the Conflict Problems of Securities Firms,
50 N.Y.U. L. Rev. 459, 460-64 (1975).
337
338
See RON CHERNOW, THE HOUSE OF MORGAN 632-35 (1990); PAUL HOFFMAN, THE DEALMAKERS
160-76 (1984); JAMES B. STEWART, THE PROSECUTORS 134-77 (1987).
339
See DAVID W. EWING, INSIDE THE HARVARD BUSINESS SCHOOL 236 (1990); DOUGLAS FRANTZ,
LEVINE & CO. 331-48 (1987); Donald Baer, A Yuppie Fable, Am. Law., July/Aug. 1986, at 83. See generally Insider
Trading and Securities Fraud Enforcement Act of 1988, Pub. L. No. 100-104, 102 Stat. 4677; United States v.
OHagan, 521 U.S. 642 (1997); Dirks v. SEC, 463 U.S. 646 (1983); Chiarella v. United States, 445 U.S. 222 (1980);
SEC v. Texas Gulf Sulphur Co., 401 F.2d 833 (2d Cir. 1968), cert. denied sub nom Kline v. SEC, 394 U.S. 976
(1969); Investors Management Co., Inc., 44 SEC 633 (1971).
340
See LOUIS LOSS & JOEL SELIGMAN, FUNDAMENTALS OF SECURITIES REGULATION 836-37 (3d ed.
1995).
341
See LOUIS LOSS & JOEL SELIGMAN, FUNDAMENTALS OF SECURITIES REGULATION 870-73 (3d ed.
1995).
342
343
15 U.S.C. 80a-3 (1988); see 1 TAMAR FRANKEL, THE REGULATION OF MONEY MANAGERS 195-254
(1978). See generally MATTHEW P. FINK, THE RISE OF MUTUAL FUNDS: AN INSIDERS VIEW (2008)
217-218; David Whitford & Joseph Nocera, Has Fidelity Lost It?, Fortune, June 9, 1997, at 58.
344
See SEC, INSTITUTIONAL INVESTOR STUDY REPORT, H.R. DOC. NO. 92-64, 92d Cong., 1st Sess., at 370-72
(1971); CHRIS WELLES, THE LAST DAYS OF THE CLUB 27-31 (1975); Note, The Regulation of Risky
Investments, 83 Harv. L. Rev. 603, 608 (1970). See generally Jones v. Harris Associates, 559 U.S. 335 (2010); Daily
Income Fund, Inc. v. Fox, 464 US 523 (1984); Burks v. Lasker, 441 U.S. 471 (1979); John Morley & Quinn Curtis,
Taking Exit Rights Seriously: Why Governance and Fee Litigation Dont Work in Mutual Funds, 120 Yale L.J. 84
(2010).
345
See JAMES L. FARRELL, Jr., GUIDE TO PORTFOLIO MANAGEMENT 1-23 (1983); ADAM SMITH, THE
MONEY GAME 207-19 (1967); JOHN TRAIN, THE MONEY MASTERS 160-61 (1980); JOHN TRAIN, THE NEW
MONEY MASTERS 138-39 (1989); Wall Street: The Performers, Forbes, June 15, 1967, at 24; see also Diane H.
Gropper, Basket Investing: The New Force In The Stock Market, Institutional Inv., Sept. 1988, at 49.
346
See E.L. Hennessee, Flowering Hedges, Barron's, Dec. 13, 1993, at 16; Heyday of the Hedge Funds, Dun's Rev., Jan.
1968, at 23; Dyan Machan & Riva Atlas, George Soros, Meet A.W. Jones, Forbes, Jan. 17, 1994, at 42.
347
See SEC, INSTITUTIONAL INVESTOR STUDY REPORT, H.R. DOC. NO. 92-64, 92d Cong., 1st Sess., at 369-70
(1971); JOHN TRAIN, THE NEW MONEY MASTERS 31-35 (1989); Susan Lee, Selling Short, Forbes, Apr. 22, 1985,
at 99.
348
See ADAM SMITH, SUPERMONEY 178-79 (1972). See Neil Weinberg & Bernard Condon, The Sleaziest Show
on Earth, Forbes, May 24, 2004, at 110; James M. Clash, Robert Lenzner, Michael Maiello & Josephine Lee, The
$500 Billion Hedge Fund Folly, Forbes, Aug. 6, 2001, at 70.
349
350
See Douglas W. Hawes, Hedge Funds - Investment Clubs of the Rich, 23 Bus. Law. 576, 576-77 (1968).
351
See Carol J. Loomis, Hard Times Come to the Hedge Funds, Fortune, Jan. 1970, at 100.
352
See THE MONEY MANAGERS 111-22 (Gilbert E. Kaplan & Chris Welles eds., 1969).
353
See SEC, INSTITUTIONAL INVESTOR STUDY REPORT, H.R. DOC. NO. 92-64, 92d Cong., 1st Sess., at 366-67
(1971); JOHN TRAIN, THE NEW MONEY MASTERS 141 (1989); Leslie A. Glick, Mutual Fund Management Fees:
In Search of a Standard, 25 Bus. Law. 1471, 1483-85 (1970).
354
355
See Cary Reich, Has Allen Got a Deal For You!, Institutional Inv., Apr. 1983, at 69.
356
See Michael Peltz, High Tech's Premier Venture Capitalist, Institutional Inv., June 1996, at 89.
357
358
359
See Anise Wallace, The World's Greatest Money Manager, Institutional Inv., June 1981, at 39.
360
See Kevin Muehring, John Meriwether By the Numbers, Institutional Inv., Nov. 1996, at 68.
361
See 1 LOUIS LOSS & JOEL SELIGMAN, SECURITIES REGULATION 39-148 (3d ed. 1989 & Supp. 1990);
Milton H. Gray, Blue Sky Practice - A Morass?, 15 Wayne L. Rev. 1519, 1523-24 (1969); Louis Loss, The Harvard Law
School Study of State Securities Regulation, Harv. L. Sch. Bull., Dec. 1954, at 9.
362
363
UNIF. SECURITIES ACT, 9C U.L.A. 86 (1956); 1 BLUE SKY L. REP. (CCH) 5500-73.
364
UNIF. SECURITIES ACT, 7B U.L.A. 509 (1985); 1 BLUE SKY L. REP. (CCH) 5591-707.
365
See F.L. Liebolt, Jr., The Revised Uniform Securities Act - Is ABA Endorsement in the Offing?, 45 Bus. Law. 1333,
1334 (1990); Note, Secondary Trading in Securities: Labyrinth Beneath the Blue Sky, 1969 Wash. U.L.Q. 41, 42-43 &
n.9 (1969).
366
367
368
369
370
See JOHN BROOKS, THE TAKEOVER GAME 42-43 (1987); see, e.g., Sam Adler, Mid-Sized Firms Turning
to Blue-Sky Specialists, Manhattan Law., Apr. 4-10, 1989, at 5.
371
See LOUIS LOSS, FUNDAMENTALS OF SECURITIES REGULATION 11-14 (2d ed. 1988).
372
See Conrad G. Goodkind, Blue Sky Law: Is There Merit in the Merit Requirements?, 1976 Wis. L. Rev. 79, 79-87
(1976).
373
See Hugh H. Makens, Who Speaks for the Investor? An Evaluation of the Assault on Merit Regulation, 13 U. Balt.
L. Rev. 435, 437-43 (1984).
374
See JOSEPH C. LONG, BLUE SKY LAW 1.02 at 1-2 to 1-5 (1985); see, e.g., Guy C. Lyman, Jr., Securities
Regulation in Louisiana - A Practical Introduction to the Blue Sky Law, 16 La. B.J. 327, 327-28 (1969).
375
See 1 LOUIS LOSS, SECURITIES REGULATION 23-107 (2d ed. 1961); LOUIS LOSS & EDWARD M.
COWETT, BLUE SKY LAW 3-42 (1958). See generally Harry C. Stansbury, A Primer on Securities Regulation in
Louisiana, 13 La. Corp. Newsl. No. 1 (La. St. B. Ass'n Sec. on Corp. & Bus. L., New Orleans, La.), Fall 1990.
376
See JOSEPH C. LONG, BLUE SKY LAW 3.01 at 3-2 to 3-5 (1985); see also Joseph C. Long, State Securities
Regulation: An Overview, 32 Okla. L. Rev. 541, 579-97 & n.193 (1979).
377
See Thomas L. Krebs & David R. Donaldson, Securities Litigation in Alabama: Open Shirts, Gold Chains and Pinkie
Rings: A Guide for Widows and Orphans, 20 Cumb. L. Rev. 481, 594-97 (1990).
378
379
See Jeffrey B. Bartell, Federal-State Relations Under the Federal Securities Code, 32 Vand. L. Rev. 457, 470-87
(1979).
380
381
See Jeffrey B. Bartell, Federal-State Relations Under the Federal Securities Code, 32 Vand. L. Rev. 457, 487-91
(1979).
382
National Securities Markets Improvement Act of 1996, Pub. L. No. 104-290, 110 Stat. 3416.
383
384
See generally Travelers Health Assn. v. Virginia ex rel. State Corporation Comm'n, 339 U.S. 643 (1950); A.S.
Goldmen & Co., Inc. v. New Jersey Bureau of Securities, 163 F.3d 780 (3d Cir. 1999); Borthwick v. First
Georgetown Securities, Inc., 892 F.2d 178 (2d Cir. 1989); Kreis v. Mates Investment Fund, Inc., 473 F.2d 1308 (8th
Cir. 1973).
385
386
Reg. S, 17 C.F.R. 230.901-905 (2014); see Note, American Adjudication of Transnational Securities Fraud, 89
Harv. L. Rev. 553, 563-71 (1976).
387
SEC Securities Act Release No. 6568 (Feb. 28, 1985), reprinted in 32 SEC DOCKET 707 (1985); SEC Securities Act
Release No. 6866 (June 6, 1990), reprinted in 46 SEC DOCKET 7 (1990); see 2 LOUIS LOSS & JOEL SELIGMAN,
SECURITIES REGULATION 792-806 (3d ed. 1989); see, e.g., Manuel Lorenz, EEC Law and Other Problems in
Applying the SEC Proposal on Multinational Offerings to the U.K., 21 Int'l Law. 795, 795-99 (1987); Louis Loss,
Extraterritoriality in the Federal Securities Code, 20 Harv. Int'l L.J. 305, 305-14 (1979); Robert C. Pozen, Disclosure and
Trading in an International Securities Market, 15 Int'l Law. 84, 84-90 (1981); Morton R. Pierce, SEC Looks at
Multinationals, N.Y. L.J., Sept. 10, 1990, at 5; Jorie Roberts, Symposium Airs Multinational Issues, Harv. L. Rec., Mar.
2, 1979, at 6.
388
See HENRY J. STEINER & DETLEV F. VAGHTS, TRANSNATIONAL LEGAL PROBLEMS 1047-74 (2d ed.
1976); Note, Predictability and Comity: Toward Common Principles of Extraterritorial Jurisdiction, 98 Harv. L. Rev.
1310, 1314-16 (1985); Martin Mayer, Bernie Cornfeld's First Billion, Fortune, Mar. 1968, at 138.
389
RESTATEMENT (THIRD) OF THE FOREIGN RELATIONS LAW OF THE UNITED STATES 416 (1987).
390
See RICHARD W. JENNINGS & HAROLD MARSH, JR., SECURITIES REGULATION 1582-86, 1592-97 (6th
ed. 1987).
391
RESTATEMENT (THIRD) OF THE FOREIGN RELATIONS LAW OF THE UNITED STATES 403 (1987).
392
See RICHARD W. JENNINGS & HAROLD MARSH, JR., SECURITIES REGULATION 1582, 1597-1603 (6th
ed. 1987).
393
394
See 5 LOUIS LOSS & JOEL SELIGMAN, SECURITIES REGULATION 2567-70 (3d ed. 1990).
395
See Stuart J. Kaswell, An Insider's View of the Insider Trading and Securities Fraud Enforcement Act of 1988, 45
Bus. Law. 145, 171-75 (1989).
396
See Roberta S. Karmel, The SEC Goes International, N.Y. L.J., June 20, 1985, at 1.
397
See, e.g., NORMAN S. POSER, INTERNATIONAL SECURITIES REGULATION 1.4, at 8-9 (1991); David M.
Barnard, The U.K. Financial Services Act, 1986: A New Regulatory Framework, 21 Int'l Law. 343, 344-48 (1987);
Kelly C. Crabb, The Reality of Extralegal Barriers to Mergers and Acquisitions in Japan, 21 Int'l Law. 97, 101-04
(1987); Sam S. Miller, Regulating Financial Services in the United Kingdom - An American Perspective, 44 Bus. Law.
323, 323-25 (1989).
398
See, e.g., NORMAN S. POSER, INTERNATIONAL SECURITIES REGULATION 4.2, at 376-78 (1991);
Manning G. Warren III, Global Harmonization of Securities Laws: The Achievements of the European Communities, 31
Harv. Int'l L.J. 185, 185-209 (1990); Nina Easton, Reuters Goes Public in Unusual Style, Legal Times, June 11, 1984, at
1; Merrill Lynch: Bullish on the World, Forbes, Nov. 1, 1972, at 30; Ann Monroe, Morgan Stanley Banks On a Hybrid
Strategy As Its World Changes, Wall St. J., June 27, 1985, at 1; Lois Moore, New U.K. Laws On Insider Dealing, N.Y.
L.J., Dec. 3, 1992, at 5.
399
Europe & Overseas Commodity Traders v. Banque Paribas London, 147 F.3d 118 (2d Cir. 1998); AVC
Nederland B.V. v. Atrium Investment Partnership, 740 F.2d 148 (2d Cir. 1984); ITT v. Cornfeld, 619 F.2d 909 (2d
Cir. 1980); ITT v. Vencap, Ltd., 519 F.2d 1001 (2d Cir. 1975); Bersch v. Drexel Firestone, Inc., 519 F.2d 974 (2d
Cir.), cert denied, 423 U.S. 1018 (1975); Leasco Data Processing Equip. Corp. v. Maxwell, 468 F.2d 1362 (2d Cir.
1972); Schoenbaum v. Firstbrook, 405 F.2d 200 (2d Cir.), modified on other grounds, 405 F.2d 215 (2d Cir.) (en
banc), cert. denied, 395 U.S. 906 (1968); see Nathaniel Popper, An Exchange Expands its Global Reach, N.Y.
Times, Jan. 2, 2014, at B1.
400
Morrison v. National Australia Bank Ltd., 561 U.S. 247 (2010); see LOUIS LOSS & JOEL SELIGMAN,
FUNDAMENTALS OF SECURITIES REGULATION Ch. 14C (5th ed. 2004 & LOUIS LOSS, JOEL SELIGMAN
& TROY PAREDES, FUNDAMENTALS OF SECURITIES REGULATION 2010 Supp.).