Section Description Provided by Instructor
The developments and issues related to the structure and operation of the U.S. Capital Market in the context of an evolving global securities market (1960-2018); The causes and effects of the Financial Meltdown (2007-2009); Assessing the legislative and regulatory reforms in the U.S. and abroad, including government bailouts and the implementation of Dodd-Frank by financial regulators and EU efforts to deal with internationalized markets and financial institutions.
Significant securities and financial services regulatory and enforcement policies and actions (2010-2018); [e.g., Insider Trading: Cady Roberts to SAC Capital and US v. Newman; Information trading networks; Extraterritorial reach of US securities laws post-Morrison v NAB; Duties of brokers, underwriters, investment advisers, officers and directors of public companies; Hedge funds and private equity; Trading platforms.
This course focuses on such basic questions as: What is The Market and how does it really work? How is the market for securities trading structured in the United States? How did we get into the financial mess of 2007-9? How did Lehman, Bear Stearns, AIG, et al. happen? Are government bailouts inevitable? Also, what is the effect of globalization on the financial markets? Are we on the brink of another financial crisis?
The U.S., UK, and EU have taken actions to establish new and far reaching changes in their regulatory regimes, hoping to prevent a recurrence of financial meltdowns resulting from major regulatory and business failures and the often irresponsible structuring and sale of complex, highly leveraged and risk-laden securities. Have we learned the lessons of the recent past?
New developments: Cybercurrency issues: Are cyber tokens "coins" securities as the SEC has noted, particularly ICO public offings requiring registration under Sec. 5 of the 1933 Act? If cyber generated tokens are securities don't the antifraud provisions of the '34 Act( eg, Sec. 10(b), and the Advisers Act and sales and are their trading platforms unregistered exchanges? Are the pools of tokens investment funds under the'1940 Act.? Or if they are commodities then the CFTC and its requirements must be met. Other technological developments raise questions that involve regulatory concerns-eg, "Flash Trading" and access to material information in nano seconds, ETFs (Exchange Traded Funds) have become popular investment products-does this type of speculation in mutual funds present special problems?
The recent rounds of market volatility have raised new questions and cautions regarding the effects of one market’s problems on other financial markets. Indeed, with the impending UK exit from the EU, has the tide of globalization stalled? Rebuilding investor confidence in the financial markets.
Do the broadened systemic regulatory powers being entrusted, primarily to the central banks, go too far? Are they the right regulators to oversee these areas? Will the U.S. FSOC's efforts in defining and containing systemic risk and implementing orderly liquidations of troubled financial firms, be effective? What are the issues raised by financial entities that are deemed Too Big to Fail?
What are the key issues of structure and regulatory policy occasioned by these financial crises in the light of the technological advances in the development of trading platforms, speed of executions, and virtually instantaneous transmission of market sensitive information?
We will review recent Supreme Court and other court decisions involving private and SEC actions involving insider trading and other violations. How does the SEC and DOJ settlement process work? Is the recent criticism of the SEC's administrative court system valid? Also, the extra-territorial reach of U.S. securities laws and the meaning of breach of fiduciary duty as applied to brokers and investment advisers.
Method of Evaluation
J.D. Writing Credit
Minor (automatic), Major (only upon consultation)
LLM Writing Project
(only upon consultation)