Statute requires that exchanges police markets and enforce securities laws against the listed companies, investors and trading firms that use their facilities. In convening a large number of participants, exchanges can efficiently monitor a swath of the market and incentivize compliance by threatening exclusion from an essential economic resource. This Article shows that exchange oversight – and the private self-regulation it represents – is ineffective in modern markets. Over the last decade, regulatory policy has aggressively championed competition in the provision of trading services. The result has been a steady fragmentation in market structure, with equity trading divided between a multitude of competing for-profit exchanges and around 37 lightly regulated non-exchange venues (so-called “dark pools”). By promoting competition, however, policy weakens the ability of exchanges to police markets. First, fragmentation increases the costs of performing oversight, with exchanges facing structural information gaps as traders transact across multiple venues. Their disciplinary power is also diminished, as bad actors are able to switch business to another exchange or dark pool. Secondly, exchanges have incentives to under-invest in governance. Within an interconnected network of competing venues, expenditure in oversight benefits an exchange privately but it also confers value on competitors. Additionally, an exchange gains by lax oversight. It wins by lowering fees and capturing business for itself. But the full costs of failure can be externalized to the network of competing venues. In recognizing the economic harms of poor exchange oversight, this Article proposes a stronger “economic consolidation” in market design. It proposes the creation of a new liability regime for exchanges and dark pools to align the incentives of trading venues towards better oversight. In so doing, it harnesses liability levers to bridge the tension between the dueling policy objectives of competition and self-regulation in securities market structure
{"title":"Oversight Failure in Securities Markets","authors":"Yesha Yadav","doi":"10.2139/ssrn.2754786","DOIUrl":"https://doi.org/10.2139/ssrn.2754786","url":null,"abstract":"Statute requires that exchanges police markets and enforce securities laws against the listed companies, investors and trading firms that use their facilities. In convening a large number of participants, exchanges can efficiently monitor a swath of the market and incentivize compliance by threatening exclusion from an essential economic resource. This Article shows that exchange oversight – and the private self-regulation it represents – is ineffective in modern markets. Over the last decade, regulatory policy has aggressively championed competition in the provision of trading services. The result has been a steady fragmentation in market structure, with equity trading divided between a multitude of competing for-profit exchanges and around 37 lightly regulated non-exchange venues (so-called “dark pools”). By promoting competition, however, policy weakens the ability of exchanges to police markets. First, fragmentation increases the costs of performing oversight, with exchanges facing structural information gaps as traders transact across multiple venues. Their disciplinary power is also diminished, as bad actors are able to switch business to another exchange or dark pool. Secondly, exchanges have incentives to under-invest in governance. Within an interconnected network of competing venues, expenditure in oversight benefits an exchange privately but it also confers value on competitors. Additionally, an exchange gains by lax oversight. It wins by lowering fees and capturing business for itself. But the full costs of failure can be externalized to the network of competing venues. In recognizing the economic harms of poor exchange oversight, this Article proposes a stronger “economic consolidation” in market design. It proposes the creation of a new liability regime for exchanges and dark pools to align the incentives of trading venues towards better oversight. In so doing, it harnesses liability levers to bridge the tension between the dueling policy objectives of competition and self-regulation in securities market structure","PeriodicalId":431402,"journal":{"name":"LSN: Securities Law: U.S. (Topic)","volume":"302 1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-03-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114393052","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study evaluates the long-term implications of the unprecedented yet evolving post Dodd-Frank Act regulatory framework pertaining to the private fund industry. The Author collected and coded data for a population of 1267 registered investment advisers. Respondents (N=69) answered questions in several categories designed to identify cost, compliance, and management issues associated with the post Dodd-Frank Act regulatory framework. The findings in this study suggest that the industry is mostly affected by the uncertainty and higher costs associated with the Act, but under multiple metrics the industry appears to be coping well overall with the evolving post Dodd-Frank Act regulatory landscape.
{"title":"The Private Fund Industry Five Years after the Dodd-Frank Act – A Survey Study","authors":"Wulf A. Kaal","doi":"10.2139/SSRN.2732915","DOIUrl":"https://doi.org/10.2139/SSRN.2732915","url":null,"abstract":"This study evaluates the long-term implications of the unprecedented yet evolving post Dodd-Frank Act regulatory framework pertaining to the private fund industry. The Author collected and coded data for a population of 1267 registered investment advisers. Respondents (N=69) answered questions in several categories designed to identify cost, compliance, and management issues associated with the post Dodd-Frank Act regulatory framework. The findings in this study suggest that the industry is mostly affected by the uncertainty and higher costs associated with the Act, but under multiple metrics the industry appears to be coping well overall with the evolving post Dodd-Frank Act regulatory landscape.","PeriodicalId":431402,"journal":{"name":"LSN: Securities Law: U.S. (Topic)","volume":"57 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-02-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126081754","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2016-02-05DOI: 10.1093/acprof:oso/9780198777625.003.0002
S. Schwarcz
This book chapter, which synthesizes several of the author’s articles, attempts to provide useful perspectives on regulating systemic risk. First, it argues that systemic shocks are inevitable. Accordingly, regulation should be designed not only to try to reduce those shocks but also to protect the financial system against their unavoidable impact. This could be done, the chapter explains, by applying chaos theory to help stabilize the financial system. The chapter then focuses on trying to prevent excessive corporate risk-taking, which is one of the leading triggers of systemic shocks and widely regarded to have been a principal cause of the financial crisis. It begins by inquiring why so few managers have been prosecuted for the excessive corporate risk-taking that led to the financial crisis. Targeting managers in their personal capacity would be a greater deterrent to excessive risk-taking than fallbacks such as imposing firm-level liability. The chapter finds, however, a host of reasons why managerial prosecution is not — and is unlikely to become — a credible deterrent. Finally, the chapter examines how else excessive risk-taking could be regulated, including by mandating a public governance duty and narrowing limited liability protection for owner-managers of shadow-banking firms.
{"title":"Perspectives on Regulating Systemic Risk","authors":"S. Schwarcz","doi":"10.1093/acprof:oso/9780198777625.003.0002","DOIUrl":"https://doi.org/10.1093/acprof:oso/9780198777625.003.0002","url":null,"abstract":"This book chapter, which synthesizes several of the author’s articles, attempts to provide useful perspectives on regulating systemic risk. First, it argues that systemic shocks are inevitable. Accordingly, regulation should be designed not only to try to reduce those shocks but also to protect the financial system against their unavoidable impact. This could be done, the chapter explains, by applying chaos theory to help stabilize the financial system. The chapter then focuses on trying to prevent excessive corporate risk-taking, which is one of the leading triggers of systemic shocks and widely regarded to have been a principal cause of the financial crisis. It begins by inquiring why so few managers have been prosecuted for the excessive corporate risk-taking that led to the financial crisis. Targeting managers in their personal capacity would be a greater deterrent to excessive risk-taking than fallbacks such as imposing firm-level liability. The chapter finds, however, a host of reasons why managerial prosecution is not — and is unlikely to become — a credible deterrent. Finally, the chapter examines how else excessive risk-taking could be regulated, including by mandating a public governance duty and narrowing limited liability protection for owner-managers of shadow-banking firms.","PeriodicalId":431402,"journal":{"name":"LSN: Securities Law: U.S. (Topic)","volume":"15 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-02-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116188784","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This letter comments on the SEC’s proposals to improve disclosure effectiveness by altering the requirements of Regulation S-X. In particular, the letter asserts that the practice of requiring the use of pro forma financial statements under Rule 3-05 should be altered in a manner that makes the financials more effective. This could be done by allowing management to make greater use of assumptions and estimates in developing the pro forma financial statements, thereby providing shareholders with an analysis of the acquisition as seen “through the eyes of management.”
{"title":"Comment on SEC Release No. 33-9929, Effectiveness of Financial Disclosures About Entities Other than the Registrant","authors":"J. Brown, Joseph V. Carcello","doi":"10.2139/SSRN.2715103","DOIUrl":"https://doi.org/10.2139/SSRN.2715103","url":null,"abstract":"This letter comments on the SEC’s proposals to improve disclosure effectiveness by altering the requirements of Regulation S-X. In particular, the letter asserts that the practice of requiring the use of pro forma financial statements under Rule 3-05 should be altered in a manner that makes the financials more effective. This could be done by allowing management to make greater use of assumptions and estimates in developing the pro forma financial statements, thereby providing shareholders with an analysis of the acquisition as seen “through the eyes of management.”","PeriodicalId":431402,"journal":{"name":"LSN: Securities Law: U.S. (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-01-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129634091","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In the fall of 2008, the securitization market, which was the major provider of credit for consumers and small businesses, came to a near halt. Investors in this market abandoned not only the residential mortgage-backed securities that triggered the financial crisis, but also consumer and business asset-backed securities (ABS), which had a long track record of strong performance, and commercial mortgage-backed securities (CMBS). Also, the unprecedented widening of spreads for these securities rendered new issuance uneconomical, and the shutdown of the securitization market threatened to exacerbate the downturn in the economy.The Federal Reserve (Fed) thus decided to introduce the Term Asset-Backed Securities Loan Facility (TALF) to help stabilize funding markets for issuers in the securitization market. The TALF extended term loans, collateralized by the securities, to buyers of certain high-quality asset-backed securities. By reopening the ABS market, the Fed intended to ultimately support the provision of credit to consumers and small businesses. Preventing the shutdown of lending to consumers and small businesses was the goal. The Fed did not directly take on material credit risk in those loans, but encouraged private investors to do so by providing them with liquidity.In aggregate, the Fed issued 2,152 loans, totaling $71.1 billion. The volume of outstanding loans peaked in March 2010 at $48.2 billion. Loans secured by nonmortgage ABS totaled $59 billion and loans secured by legacy CMBS totaled $12 billion. There are no longer any loans outstanding under the TALF program.
{"title":"Term Asset-Backed Securities Loan Facility","authors":"J. Rhee","doi":"10.2139/SSRN.2723497","DOIUrl":"https://doi.org/10.2139/SSRN.2723497","url":null,"abstract":"In the fall of 2008, the securitization market, which was the major provider of credit for consumers and small businesses, came to a near halt. Investors in this market abandoned not only the residential mortgage-backed securities that triggered the financial crisis, but also consumer and business asset-backed securities (ABS), which had a long track record of strong performance, and commercial mortgage-backed securities (CMBS). Also, the unprecedented widening of spreads for these securities rendered new issuance uneconomical, and the shutdown of the securitization market threatened to exacerbate the downturn in the economy.The Federal Reserve (Fed) thus decided to introduce the Term Asset-Backed Securities Loan Facility (TALF) to help stabilize funding markets for issuers in the securitization market. The TALF extended term loans, collateralized by the securities, to buyers of certain high-quality asset-backed securities. By reopening the ABS market, the Fed intended to ultimately support the provision of credit to consumers and small businesses. Preventing the shutdown of lending to consumers and small businesses was the goal. The Fed did not directly take on material credit risk in those loans, but encouraged private investors to do so by providing them with liquidity.In aggregate, the Fed issued 2,152 loans, totaling $71.1 billion. The volume of outstanding loans peaked in March 2010 at $48.2 billion. Loans secured by nonmortgage ABS totaled $59 billion and loans secured by legacy CMBS totaled $12 billion. There are no longer any loans outstanding under the TALF program.","PeriodicalId":431402,"journal":{"name":"LSN: Securities Law: U.S. (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-01-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130093964","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The advent of computerized trading in the 1970s and 1980s changed the landscape of securities litigation. Now, high-frequency trading (HFT) again threatens to do the same. By using sophisticated technological tools and computer algorithms to execute trades in fractions of a second and moving in and out of short-term positions at high volume, traders aim to capture sometimes just a fraction of a cent in profit on every trade. Along with the advantages of increased speed, however, come many negative effects for investors still utilizing slower, more conventional electronic trading strategies. Such investors, stung by lost profits and increased prices, have begun to seek protection and relief from the federal securities laws — but how likely are their claims to succeed? And, in the event that HFT becomes a standard practice among investors, how should litigants in securities class actions react to this new technology? This Comment explores these and other questions related to HFT and the fraud-on-the-market presumption of reliance, and proposes solutions and suggestions for how courts should treat these issues.
{"title":"Too Fast, Too Frequent? High-Frequency Trading and Securities Class Actions","authors":"T. E. Levens","doi":"10.2139/ssrn.2623956","DOIUrl":"https://doi.org/10.2139/ssrn.2623956","url":null,"abstract":"The advent of computerized trading in the 1970s and 1980s changed the landscape of securities litigation. Now, high-frequency trading (HFT) again threatens to do the same. By using sophisticated technological tools and computer algorithms to execute trades in fractions of a second and moving in and out of short-term positions at high volume, traders aim to capture sometimes just a fraction of a cent in profit on every trade. Along with the advantages of increased speed, however, come many negative effects for investors still utilizing slower, more conventional electronic trading strategies. Such investors, stung by lost profits and increased prices, have begun to seek protection and relief from the federal securities laws — but how likely are their claims to succeed? And, in the event that HFT becomes a standard practice among investors, how should litigants in securities class actions react to this new technology? This Comment explores these and other questions related to HFT and the fraud-on-the-market presumption of reliance, and proposes solutions and suggestions for how courts should treat these issues.","PeriodicalId":431402,"journal":{"name":"LSN: Securities Law: U.S. (Topic)","volume":"37 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-06-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122599914","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The SEC’s new whistleblower bounty program has provoked significant controversy. That controversy has centered on the failure of the implementing rules to make internal reporting through corporate compliance departments a prerequisite to recovery. This Article approaches the new program with a broader lens, examining its impact on the longstanding debate over fraud-on-the-market (FOTM) class actions. The Article demonstrates how the bounty program, if successful, will replicate the fraud deterrence benefits of FOTM class actions while simultaneously increasing the costs of such suits — rendering them a pointless yet expensive redundancy. If instead the SEC proves incapable of effectively administering the bounty program, the Article shows how amending it to include a qui tam provision for Rule 10b-5 violations would offer several advantages over retaining FOTM class actions. Either way, the bounty program has important and previously unrecognized implications that policymakers should not ignore.
{"title":"Better Bounty Hunting: How the SEC's New Whistleblower Program Changes the Securities Fraud Class Action Debate","authors":"A. Rose","doi":"10.2139/SSRN.2305403","DOIUrl":"https://doi.org/10.2139/SSRN.2305403","url":null,"abstract":"The SEC’s new whistleblower bounty program has provoked significant controversy. That controversy has centered on the failure of the implementing rules to make internal reporting through corporate compliance departments a prerequisite to recovery. This Article approaches the new program with a broader lens, examining its impact on the longstanding debate over fraud-on-the-market (FOTM) class actions. The Article demonstrates how the bounty program, if successful, will replicate the fraud deterrence benefits of FOTM class actions while simultaneously increasing the costs of such suits — rendering them a pointless yet expensive redundancy. If instead the SEC proves incapable of effectively administering the bounty program, the Article shows how amending it to include a qui tam provision for Rule 10b-5 violations would offer several advantages over retaining FOTM class actions. Either way, the bounty program has important and previously unrecognized implications that policymakers should not ignore.","PeriodicalId":431402,"journal":{"name":"LSN: Securities Law: U.S. (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-12-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114595929","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Prior research generally argues that managers issue management earnings forecasts (MFs) to secure capital market benefits (that is, to reduce information asymmetry between managers and investors to lower a firm’s cost of capital), to reduce the firm’s litigation costs, or to allow managers to trade opportunistically in their firm’s stock. We discuss and test whether some MFs are issued because managers have an affirmative duty under Rule 10b-5 of the Securities Acts to disclose all material information or to abstain from trading in their firm’s securities. Four sets of tests support our conjecture that managers issue some MFs to comply with their duty under Rule 10b-5. Since prior MF studies have typically ignored the alternative explanation that managers issue some MFs to comply with disclose or abstain obligations, the inferences drawn from such studies about managerial incentives to issue MFs likely overstate the economic significance of the variables used to capture capital market or opportunistic incentives for MF disclosure.
{"title":"The Disclose or Abstain Incentive to Issue Management Guidance","authors":"E. Li, Charles E. Wasley, J. Zimmerman","doi":"10.2139/ssrn.2437970","DOIUrl":"https://doi.org/10.2139/ssrn.2437970","url":null,"abstract":"Prior research generally argues that managers issue management earnings forecasts (MFs) to secure capital market benefits (that is, to reduce information asymmetry between managers and investors to lower a firm’s cost of capital), to reduce the firm’s litigation costs, or to allow managers to trade opportunistically in their firm’s stock. We discuss and test whether some MFs are issued because managers have an affirmative duty under Rule 10b-5 of the Securities Acts to disclose all material information or to abstain from trading in their firm’s securities. Four sets of tests support our conjecture that managers issue some MFs to comply with their duty under Rule 10b-5. Since prior MF studies have typically ignored the alternative explanation that managers issue some MFs to comply with disclose or abstain obligations, the inferences drawn from such studies about managerial incentives to issue MFs likely overstate the economic significance of the variables used to capture capital market or opportunistic incentives for MF disclosure.","PeriodicalId":431402,"journal":{"name":"LSN: Securities Law: U.S. (Topic)","volume":"29 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-09-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114447751","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Neither the FDIC’s recently announced resolution policy for failed financial institutions nor academic studies on systemic risk address the micro-level managerial incentives resulting from the Dodd-Frank Orderly Liquidation Authority’s incapacity to respond to simultaneous balance-sheet insolvency rather than temporary illiquidity. By holding correlated asset portfolios and serving as counterparties to similarly situated financial institutions, managers can strategically increase the likelihood of a government bailout rather than receivership under the OLA. Three case studies — Lehman Brothers, AIG, and large European banks’ response to the 2011 bail-in proposals — demonstrate the implications of the OLA’s shortcomings and the inadequacy of the FDIC’s approach. In light of these strategic incentives, the FDIC should modify its intervention policy to respond effectively to illiquidity-driven systemic risk and prudential regulators should work to reduce the likelihood of correlated balance-sheet insolvency.
{"title":"Systemic Risk and Managerial Incentives in the Dodd-Frank Orderly Liquidation Authority","authors":"Joshua Mitts","doi":"10.2139/ssrn.2220208","DOIUrl":"https://doi.org/10.2139/ssrn.2220208","url":null,"abstract":"Neither the FDIC’s recently announced resolution policy for failed financial institutions nor academic studies on systemic risk address the micro-level managerial incentives resulting from the Dodd-Frank Orderly Liquidation Authority’s incapacity to respond to simultaneous balance-sheet insolvency rather than temporary illiquidity. By holding correlated asset portfolios and serving as counterparties to similarly situated financial institutions, managers can strategically increase the likelihood of a government bailout rather than receivership under the OLA. Three case studies — Lehman Brothers, AIG, and large European banks’ response to the 2011 bail-in proposals — demonstrate the implications of the OLA’s shortcomings and the inadequacy of the FDIC’s approach. In light of these strategic incentives, the FDIC should modify its intervention policy to respond effectively to illiquidity-driven systemic risk and prudential regulators should work to reduce the likelihood of correlated balance-sheet insolvency.","PeriodicalId":431402,"journal":{"name":"LSN: Securities Law: U.S. (Topic)","volume":"42 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-08-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124554799","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This Article focuses on the development of the hedge fund landscape in the United States by focusing on the industry’s continued path towards a mainstream asset class, the enormous growth of the industry in terms of assets under management, and the increase in shadow banking activities. As hedge funds increase assets under management through investment by institutional investors and initial public offering activity, the industry is continually changing from its reclusive origins to more mainstream prominence in finance. Further, hedge funds have grown at an impressive rate — particularly since the recent global financial crisis — and now command the same respect and care that other typical institutional investors, such as pension funds and university endowments, have wielded for decades. Finally, hedge funds are now central players in the shadow banking arena, bringing the capital and tactics that can shape the future of high-finance.
{"title":"The Shifting Realm of Hedge Funds","authors":"K. Johnson","doi":"10.2139/SSRN.2552190","DOIUrl":"https://doi.org/10.2139/SSRN.2552190","url":null,"abstract":"This Article focuses on the development of the hedge fund landscape in the United States by focusing on the industry’s continued path towards a mainstream asset class, the enormous growth of the industry in terms of assets under management, and the increase in shadow banking activities. As hedge funds increase assets under management through investment by institutional investors and initial public offering activity, the industry is continually changing from its reclusive origins to more mainstream prominence in finance. Further, hedge funds have grown at an impressive rate — particularly since the recent global financial crisis — and now command the same respect and care that other typical institutional investors, such as pension funds and university endowments, have wielded for decades. Finally, hedge funds are now central players in the shadow banking arena, bringing the capital and tactics that can shape the future of high-finance.","PeriodicalId":431402,"journal":{"name":"LSN: Securities Law: U.S. (Topic)","volume":"19 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114481390","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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