The value of the freezeout option is critical in many legal policy issues concerning corporate law. In this article, we present, for the first time, a method for determining the value of the minority stock and the freezeout option. We price the freezeout option with two different sets of assumptions regarding the controlling shareholder informational advantage, using both an exogenous and endogenous stock prices in our pricing. The result of our model indicates that the freezeout option has a low value and the minority stock is only slightly discounted. This result implies that the use of publicly known information, including market prices, in determining a fair value for minority stocks will not cause expropriation of minority shareholders and will not lead to inefficiency in corporate and controlling owners’ decisions. Empirical studies support this view.
{"title":"The Value of the Freezeout Option","authors":"Z. Goshen, Z. Wiener","doi":"10.2139/ssrn.217511","DOIUrl":"https://doi.org/10.2139/ssrn.217511","url":null,"abstract":"The value of the freezeout option is critical in many legal policy issues concerning corporate law. In this article, we present, for the first time, a method for determining the value of the minority stock and the freezeout option. We price the freezeout option with two different sets of assumptions regarding the controlling shareholder informational advantage, using both an exogenous and endogenous stock prices in our pricing. The result of our model indicates that the freezeout option has a low value and the minority stock is only slightly discounted. This result implies that the use of publicly known information, including market prices, in determining a fair value for minority stocks will not cause expropriation of minority shareholders and will not lead to inefficiency in corporate and controlling owners’ decisions. Empirical studies support this view.","PeriodicalId":47357,"journal":{"name":"Corporate Communications","volume":"95 1","pages":""},"PeriodicalIF":2.0,"publicationDate":"2019-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74497052","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}
Steven Huddart, John S. Hughes, Michael G. Williams
Among the reactions to recent corporate scandals are calls for greater transparency of insiders' trades. The Securities and Exchange Commission's recent rule on fair disclosure is accompanied by a safe harbor from prosecution under insider trading laws for insiders who pre-commit to trades. A blue-ribbon commission convened to address recent financial scandals and subsequent decline in investor confidence recommended that insiders be required to preannounce sales of stock in their companies. The commission's call for insiders to preannounce their sales echoes proposals made over a decade ago in the legal press, law reviews, and the U.S. Congress that would require pre-announcement of all trades. We consider the effects of insiders pre-announcing their trades on their preferences for public disclosure that would pre-empt their private information when other motives for insiders to trade are present. Two principal forces emerge. With pre-announcement, insiders cannot expect to profit on their private information, but cannot ignore the incentive to do so when market makers are unable to disentangle insiders' motives. Pre-emptive public disclosure allows insiders to avoid the dysfunctional consequences of this incentive. However, such disclosure before insiders have an opportunity to trade exposes them to greater price risk than would otherwise be the case. Our analysis demonstrates these effects.
对近期公司丑闻的反应之一是要求提高内幕交易的透明度。美国证券交易委员会(Securities and Exchange Commission，简称sec)最近出台的公平披露规定，还附带了一个安全港，让预先承诺交易的内部人士免于内幕交易法的起诉。为解决最近的金融丑闻和随后投资者信心的下降而召集的一个蓝带委员会建议，要求内部人士提前宣布其公司股票的出售。欧盟委员会呼吁内部人士提前宣布他们的交易，这与十多年前法律媒体、法律评论和美国国会提出的要求提前宣布所有交易的建议相呼应。我们考虑了内部人预先宣布其交易对其公开披露偏好的影响，当内部人交易的其他动机存在时，公开披露偏好会优先于他们的私人信息。出现了两股主要力量。在预先公告的情况下，内部人士不能指望从他们的私人信息中获利，但当做市商无法弄清内部人士的动机时，他们也不能忽视这样做的动机。先发制人的公开披露让内部人士得以避免这种激励带来的不良后果。然而，在内幕人士有机会交易之前进行披露，会使他们面临更大的价格风险。我们的分析证明了这些影响。
{"title":"Pre-Announcement of Insiders' Trades","authors":"Steven Huddart, John S. Hughes, Michael G. Williams","doi":"10.2139/ssrn.216168","DOIUrl":"https://doi.org/10.2139/ssrn.216168","url":null,"abstract":"Among the reactions to recent corporate scandals are calls for greater transparency of insiders' trades. The Securities and Exchange Commission's recent rule on fair disclosure is accompanied by a safe harbor from prosecution under insider trading laws for insiders who pre-commit to trades. A blue-ribbon commission convened to address recent financial scandals and subsequent decline in investor confidence recommended that insiders be required to preannounce sales of stock in their companies. The commission's call for insiders to preannounce their sales echoes proposals made over a decade ago in the legal press, law reviews, and the U.S. Congress that would require pre-announcement of all trades. We consider the effects of insiders pre-announcing their trades on their preferences for public disclosure that would pre-empt their private information when other motives for insiders to trade are present. Two principal forces emerge. With pre-announcement, insiders cannot expect to profit on their private information, but cannot ignore the incentive to do so when market makers are unable to disentangle insiders' motives. Pre-emptive public disclosure allows insiders to avoid the dysfunctional consequences of this incentive. However, such disclosure before insiders have an opportunity to trade exposes them to greater price risk than would otherwise be the case. Our analysis demonstrates these effects.","PeriodicalId":47357,"journal":{"name":"Corporate Communications","volume":"1 1","pages":""},"PeriodicalIF":2.0,"publicationDate":"2004-06-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75220697","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 characterizes insider trading in controlled firms as an agency problem. Using a standard agency model of corporate value diversion through insider trading by a controlling shareholder, I derive testable hypotheses about the relationship between corporate value and insider trading laws. The article tests these hypotheses using cross-sectional data on firms from a group of developed countries. The results show that stringent insider trading laws and enforcement are associated with greater corporate valuation among firms in common law countries, a result that is consistent with the claim that insider trading laws can mitigate agency costs. In contrast, insider trading laws and enforcement are generally insignificant to corporate valuation among firms in civil law countries. These results are robust to alternative regression specifications and to controlling for a variety of relevant factors and they suggest that the firm-level impact of insider trading regulation may depend on the local context in which it is applied.
{"title":"Do Investors in Controlled Firms Value Insider Trading Laws? International Evidence","authors":"L. N. Beny","doi":"10.2139/ssrn.296111","DOIUrl":"https://doi.org/10.2139/ssrn.296111","url":null,"abstract":"This article characterizes insider trading in controlled firms as an agency problem. Using a standard agency model of corporate value diversion through insider trading by a controlling shareholder, I derive testable hypotheses about the relationship between corporate value and insider trading laws. The article tests these hypotheses using cross-sectional data on firms from a group of developed countries. The results show that stringent insider trading laws and enforcement are associated with greater corporate valuation among firms in common law countries, a result that is consistent with the claim that insider trading laws can mitigate agency costs. In contrast, insider trading laws and enforcement are generally insignificant to corporate valuation among firms in civil law countries. These results are robust to alternative regression specifications and to controlling for a variety of relevant factors and they suggest that the firm-level impact of insider trading regulation may depend on the local context in which it is applied.","PeriodicalId":47357,"journal":{"name":"Corporate Communications","volume":"19 1","pages":""},"PeriodicalIF":2.0,"publicationDate":"2003-04-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73668289","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}
Financial economists seem to believe that takeovers are partly motivated by the desire to improve poorly-performing firms. However, prior empirical evidence in support of this inefficient management hypothesis is rather weak. We provide a detailed reexamination of this hypothesis in a large-scale empirical study. We find little evidence that target firms were performing poorly before acquisition, using either operating or stock returns. This result holds both for the sample as a whole and for sub-samples of takeovers that are more likely to be disciplinary. We conclude that the conventional view that targets perform poorly is not supported by the data.
{"title":"Do Takeover Targets Under-Perform? Evidence from Operating and Stock Returns","authors":"Anup Agrawal, J. Jaffe","doi":"10.2139/ssrn.272782","DOIUrl":"https://doi.org/10.2139/ssrn.272782","url":null,"abstract":"Financial economists seem to believe that takeovers are partly motivated by the desire to improve poorly-performing firms. However, prior empirical evidence in support of this inefficient management hypothesis is rather weak. We provide a detailed reexamination of this hypothesis in a large-scale empirical study. We find little evidence that target firms were performing poorly before acquisition, using either operating or stock returns. This result holds both for the sample as a whole and for sub-samples of takeovers that are more likely to be disciplinary. We conclude that the conventional view that targets perform poorly is not supported by the data.","PeriodicalId":47357,"journal":{"name":"Corporate Communications","volume":"65 1","pages":""},"PeriodicalIF":2.0,"publicationDate":"2002-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76577509","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 double taxation of corporate income is routinely criticized, but its origins have never been adequately explained. This Article traces the rise of double taxation to the problem of agency costs, or those costs flowing from the delegation of control to an agent - the professional manager - who is imbued with self-interest. Originally, shareholders acceded to managers' decision to retain upwards of 50% of corporate income because it would be taxed at a lower rate at the corporate level than it would be if distributed and subject to the high individual surtax rates (although it was exempt from the normal tax). In 1936, however, President Roosevelt pushed through a tax on undistributed profits that threatened to upset this arrangement. Business leaders hoped that subjecting distributed corporate income to full double taxation would aid in realigning management-shareholder attitudes toward the retention of corporate earnings. While others have connected the persistence of double taxation to the problem of agency costs, this Article is the first to establish that double taxation arose as a political resolution to the problem of divergent manager/shareholder views toward dividend payout policies.
{"title":"Corporate Managers, Agency Costs and the Rise of Double Taxation","authors":"Steven A. Bank","doi":"10.2139/SSRN.302170","DOIUrl":"https://doi.org/10.2139/SSRN.302170","url":null,"abstract":"The double taxation of corporate income is routinely criticized, but its origins have never been adequately explained. This Article traces the rise of double taxation to the problem of agency costs, or those costs flowing from the delegation of control to an agent - the professional manager - who is imbued with self-interest. Originally, shareholders acceded to managers' decision to retain upwards of 50% of corporate income because it would be taxed at a lower rate at the corporate level than it would be if distributed and subject to the high individual surtax rates (although it was exempt from the normal tax). In 1936, however, President Roosevelt pushed through a tax on undistributed profits that threatened to upset this arrangement. Business leaders hoped that subjecting distributed corporate income to full double taxation would aid in realigning management-shareholder attitudes toward the retention of corporate earnings. While others have connected the persistence of double taxation to the problem of agency costs, this Article is the first to establish that double taxation arose as a political resolution to the problem of divergent manager/shareholder views toward dividend payout policies.","PeriodicalId":47357,"journal":{"name":"Corporate Communications","volume":"31 1","pages":""},"PeriodicalIF":2.0,"publicationDate":"2002-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84029061","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}
Corporate law expresses a profound ambiguity toward the role of shareholders. Courts announce that shareholders are "critical to the theory that legitimates the exercise of power - by directors and officers over vast aggregations of property that they do not own." At the same time shareholders have a very difficult time actually making any corporate decisions. In this Article, we strive to define a new role for shareholders by drawing on economic theories of the firm and the structure of corporate law. More particularly we examine the role of shareholders in hostile corporate takeovers, the area where the interests of shareholders and directors collide most dramatically, and highlight a necessary "sacred space" for shareholder self-help, free of director or judicial intrusion.
{"title":"Toward a New Theory of the Shareholder Role: 'Sacred Space' in Corporate Takeovers","authors":"R. Thompson, D. Smith","doi":"10.2139/ssrn.280896","DOIUrl":"https://doi.org/10.2139/ssrn.280896","url":null,"abstract":"Corporate law expresses a profound ambiguity toward the role of shareholders. Courts announce that shareholders are \"critical to the theory that legitimates the exercise of power - by directors and officers over vast aggregations of property that they do not own.\" At the same time shareholders have a very difficult time actually making any corporate decisions. In this Article, we strive to define a new role for shareholders by drawing on economic theories of the firm and the structure of corporate law. More particularly we examine the role of shareholders in hostile corporate takeovers, the area where the interests of shareholders and directors collide most dramatically, and highlight a necessary \"sacred space\" for shareholder self-help, free of director or judicial intrusion.","PeriodicalId":47357,"journal":{"name":"Corporate Communications","volume":"26 1","pages":""},"PeriodicalIF":2.0,"publicationDate":"2001-09-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81776257","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}
Shareholder rights vary across firms. Using the incidence of 24 unique governance rules, we construct a "Governance Index" to proxy for the level of shareholder rights at about 1500 large firms during the 1990s. An investment strategy that bought firms in the lowest decile of the index (strongest rights) and sold firms in the highest decile of the index (weakest rights) would have earned abnormal returns of 8.5 percent per year during the sample period. We find that firms with stronger shareholder rights had higher firm value, higher profits, higher sales growth, lower capital expenditures, and made fewer corporate acquisitions.
{"title":"Corporate Governance and Equity Prices","authors":"Paul A. Gompers, Joy L. Ishii, Andrew Metrick","doi":"10.2139/ssrn.278920","DOIUrl":"https://doi.org/10.2139/ssrn.278920","url":null,"abstract":"Shareholder rights vary across firms. Using the incidence of 24 unique governance rules, we construct a \"Governance Index\" to proxy for the level of shareholder rights at about 1500 large firms during the 1990s. An investment strategy that bought firms in the lowest decile of the index (strongest rights) and sold firms in the highest decile of the index (weakest rights) would have earned abnormal returns of 8.5 percent per year during the sample period. We find that firms with stronger shareholder rights had higher firm value, higher profits, higher sales growth, lower capital expenditures, and made fewer corporate acquisitions.","PeriodicalId":47357,"journal":{"name":"Corporate Communications","volume":"44 1","pages":""},"PeriodicalIF":2.0,"publicationDate":"2001-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76323196","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}
There is growing interest in trying to explain differing corporate ownership structures in different countries. La Porta, Lopez-de-Silanes, Shleifer and Vishny (1998) find that the quality of legal protection of shareholders helps determine ownership concentration: in countries with relatively poor legal protection of investors, publicly listed companies are likely to have large blockholders. In contrast, Roe (2000) seeks to explain ownership differences in terms of politics and finds that publicly listed companies in social democracies are more likely to have concentrated ownership than their counterparts in the (non-socially democratic) United States. Bebchuk (1999a, 1999b) develops a model which predicts that the proportion of a country's publicly listed firms having a controlling shareholder depends on the size of private benefits of control in the corporate sector. Bebchuk extends his model to explain differences in ownership structure among companies in the same country. The model indicates that a company is more likely to have a large blockholder when the private benefits of control potentially available to a blockholder at that company are comparatively large. This paper examines the factors associated with ownership structure among publicly listed Australian companies. The results indicate that private benefits of control help explain the differences in ownership structure among Australian companies.
{"title":"The Determinants of Corporate Ownership Structure: Australian Evidence","authors":"Asjeet S. Lamba, G. Stapledon","doi":"10.2139/ssrn.279015","DOIUrl":"https://doi.org/10.2139/ssrn.279015","url":null,"abstract":"There is growing interest in trying to explain differing corporate ownership structures in different countries. La Porta, Lopez-de-Silanes, Shleifer and Vishny (1998) find that the quality of legal protection of shareholders helps determine ownership concentration: in countries with relatively poor legal protection of investors, publicly listed companies are likely to have large blockholders. In contrast, Roe (2000) seeks to explain ownership differences in terms of politics and finds that publicly listed companies in social democracies are more likely to have concentrated ownership than their counterparts in the (non-socially democratic) United States. Bebchuk (1999a, 1999b) develops a model which predicts that the proportion of a country's publicly listed firms having a controlling shareholder depends on the size of private benefits of control in the corporate sector. Bebchuk extends his model to explain differences in ownership structure among companies in the same country. The model indicates that a company is more likely to have a large blockholder when the private benefits of control potentially available to a blockholder at that company are comparatively large. This paper examines the factors associated with ownership structure among publicly listed Australian companies. The results indicate that private benefits of control help explain the differences in ownership structure among Australian companies.","PeriodicalId":47357,"journal":{"name":"Corporate Communications","volume":"97 1","pages":""},"PeriodicalIF":2.0,"publicationDate":"2001-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86374320","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}
There is general misperception that the large trading volume in initial public offerings (IPOs) in the aftermarket is mostly due to "flippers" that are allocated shares in the offering and immediately resell them in the aftermarket when the stock starts trading. We find that on average flipping accounts for only 19 percent of trading volume (median of 17 percent) and 15 percent of shares offered (median of 7 percent) during the first two days of trading; institutions do more flipping than retail customers; and hot IPOs are flipped much more than cold IPOs. It has been argued that institutions are strong hands that do not flip shares and are therefore allocated large proportions of an offering. However, we find that institutions consistently flip a larger proportion of their allocation than retail customers and that the hypothesis that institutions are smart investors that quickly flip cold IPOs while the underwriter is still providing price support is not true. Investment banks closely monitor flipping activity because excessive flipping can put downward pressure on the stock price, particularly of weak offerings. They have devised mechanisms, such as penalty bids, to restrict flipping activity. In our sample, explicit penalty bids are directly assessed only in a few IPOs and the total dollar penalties are small.
{"title":"Allocation of Initial Public Offerings and Flipping Activity","authors":"Reena Aggarwal","doi":"10.2139/ssrn.274851","DOIUrl":"https://doi.org/10.2139/ssrn.274851","url":null,"abstract":"There is general misperception that the large trading volume in initial public offerings (IPOs) in the aftermarket is mostly due to \"flippers\" that are allocated shares in the offering and immediately resell them in the aftermarket when the stock starts trading. We find that on average flipping accounts for only 19 percent of trading volume (median of 17 percent) and 15 percent of shares offered (median of 7 percent) during the first two days of trading; institutions do more flipping than retail customers; and hot IPOs are flipped much more than cold IPOs. It has been argued that institutions are strong hands that do not flip shares and are therefore allocated large proportions of an offering. However, we find that institutions consistently flip a larger proportion of their allocation than retail customers and that the hypothesis that institutions are smart investors that quickly flip cold IPOs while the underwriter is still providing price support is not true. Investment banks closely monitor flipping activity because excessive flipping can put downward pressure on the stock price, particularly of weak offerings. They have devised mechanisms, such as penalty bids, to restrict flipping activity. In our sample, explicit penalty bids are directly assessed only in a few IPOs and the total dollar penalties are small.","PeriodicalId":47357,"journal":{"name":"Corporate Communications","volume":"1 1","pages":""},"PeriodicalIF":2.0,"publicationDate":"2001-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89271762","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 past few years academic authors such as Roberta Romano, Stephen Choi, Andrew T. Guzman, Merritt B. Fox, Paul Mahoney and Alan R. Palmiter have proposed significant reform of securities regulation in the United States. This article reviews these proposals, which have in common the objective of increasing the range of issuer choice as to the applicable legal regime. This article concludes that although these proposals are not formulated with sufficient specificity to make them ready for implementation, they reflect a spreading disbelief on the part of academic critics that U.S. securities regulation does, or even can, successfully protect investors. Although proposals to give the issuer control over the applicable fraud regime are likely to be controversial, a narrower range of choice focused on the required procedures for offering and trading stocks could provide beneficial competition among regulators. The proposals evidence the fact that there are a significant number of academic writers who hold the view that increasing the opportunities for competition among regulatory regimes in the area of securities regulation would lead to improvements in social welfare over time.
在过去几年中，Roberta Romano, Stephen Choi, Andrew T. Guzman, Merritt B. Fox, Paul Mahoney和Alan R. Palmiter等学术作者提出了美国证券监管的重大改革。本文回顾了这些提案，它们的共同目标是增加发行人在适用法律制度方面的选择范围。本文的结论是，尽管这些建议的制定没有足够的特殊性，不足以使它们为实施做好准备，但它们反映了学术界批评人士普遍不相信美国证券监管确实或甚至能够成功地保护投资者。尽管让发行人控制适用的欺诈制度的提议可能会引起争议，但将选择范围缩小，集中在股票发行和交易所需的程序上，可能会在监管机构之间提供有益的竞争。这些建议证明了这样一个事实，即有相当多的学术作家认为，随着时间的推移，增加证券监管领域监管制度之间竞争的机会将导致社会福利的改善。
{"title":"Proposals for Reform of Securities Regulation: An Overview","authors":"E. Kitch","doi":"10.2139/SSRN.269126","DOIUrl":"https://doi.org/10.2139/SSRN.269126","url":null,"abstract":"In the past few years academic authors such as Roberta Romano, Stephen Choi, Andrew T. Guzman, Merritt B. Fox, Paul Mahoney and Alan R. Palmiter have proposed significant reform of securities regulation in the United States. This article reviews these proposals, which have in common the objective of increasing the range of issuer choice as to the applicable legal regime. This article concludes that although these proposals are not formulated with sufficient specificity to make them ready for implementation, they reflect a spreading disbelief on the part of academic critics that U.S. securities regulation does, or even can, successfully protect investors. Although proposals to give the issuer control over the applicable fraud regime are likely to be controversial, a narrower range of choice focused on the required procedures for offering and trading stocks could provide beneficial competition among regulators. The proposals evidence the fact that there are a significant number of academic writers who hold the view that increasing the opportunities for competition among regulatory regimes in the area of securities regulation would lead to improvements in social welfare over time.","PeriodicalId":47357,"journal":{"name":"Corporate Communications","volume":"1 1","pages":""},"PeriodicalIF":2.0,"publicationDate":"2001-05-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88853933","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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