Rethinking securities law / Marc I. Steinberg.

Format:

Book

Author/Creator:

Steinberg, Marc I., author.

Contributor:

Rosengarten Family Fund.

Language:

English

Subjects (All):

United States. Securities Act of 1933.

United States.

United States. Securities Exchange Act of 1934.

Securities--United States.

Securities.

Law reform--United States.

Law reform.

Physical Description:

xviii, 339 pages ; 25 cm

Place of Publication:

New York, NY : Oxford University Press, [2021]

Summary:

"This book focuses on a very timely and important subject that merit s comprehensive analysis: "rethinking" the securities laws, with particular emphasis on the Securities Act and Securities Exchange Act. The system of securities regulation that prevails today in the United States is one that has been formed through piecemeal federal legislation, Securities and Exchange Commission (SEC) in vocation of its administrative authority, and self-regulatory episodic action. As a consequence, the presence of consistent and logical regulation all too often is lacking. In both transactional and litigation settings, with frequency, mandates apply that are erratic and antithetical to sound public policy. Over four decades ago, the American Law Institute (ALI) adopted the ALI Federal Securities Code. The Code has not been enacted by Congress and its prospects are dim. Since that time, no treatise, monograph, or other source comprehensively has focused on this meritorious subject. The objective of this book is to identify the deficiencies that exist under the current regimen, address their failings, provide recommendations for rectifying these deficiencies, and set forth a thorough analysis for remediation in order to prescribe a consistent and sound securities law framework. By undertaking this challenge, the book provides an original and valuable resource for effectuating necessary law reform that should prove beneficial to the integrity of the U.S. capital markets, effective and fair government and private enforcement, and the enhancement of investor protection"-- Provided by publisher.

Contents:

Machine generated contents note: 1. Rethinking Securities Law

Laying the Groundwork

I. Introduction

II. The Preeminence of the U.S. Securities Law Framework

III. The Need for Rethinking the Securities Laws

IV. Conclusion

2. The Disclosure Regimen of the Federal Securities Laws

II. Focus on Disclosure

Not Substantive Fairness

A. Rejection of a Federal Fairness Approach

B. Episodic Application of Fairness Approach

C. Enhancing Fairness through the Guise of Disclosure

D. Propriety of Federal Law Regulating Substantive Conduct

III. The Concept of Materiality

A. Meaning of Materiality

B. Qualitative Economic Materiality

C. Application of Different Materiality Thresholds

D. Materiality Analysis

Management Integrity

E. Flexible Standards of Materiality

IV. The Mandatory Disclosure Framework

A. Established Presence of a Mandatory Disclosure System

B. Effectiveness of the Mandatory Disclosure Framework

C. Incorporation by Reference

Informational Disparities

D. Proposed Adoption of a Mandatory "Summary" Section in SEC Filings

E. Partial Dismantling of the Mandatory Disclosure Framework

F. Requirement to Disclose All Material Information

G. Proposed Mandate to Disclose All Material Information

V. Conclusion

3. Exemptions from Securities Act Registration

II. Primary Exemptions from Securities Act Registration

A. The Traditional Rule 506 Exemption

B. The JOBS Act Rule 506 Exemption

C. The Regulation A, Tier 2 Exemption

D. Integration of Securities Offerings

III. A Proposed Framework for Primary Securities Act Exemptions

A. Private Offerings

B. Limited and Exempt Public Offerings

1. Rule 504

2. Regulation A

3. Intrastate Offerings

4. Summation

C. Integration of Primary Exempt Offerings

IV. A Proposed Framework for Resales of Securities

A. The Unacceptable Current Resale Exemption Framework

B. A Proposed Framework for Resale Exemptions

1. Public Resales of Securities

2. Private Resales of Securities

3. Resales to Qualified Institutional Buyers

4. The Securities Act Registration Framework

II. Fundamental Principles

The Need for Revision

A. Mandatory Disclosure of Material Information

B. Uniform Standards of Materiality

C. Incorporation by Reference Based on Efficient Markets

D. Mandatory Inclusion of Summary Section

E. Summation

III. Multi-faceted Issues Implicated in the Registration Statement Process

A. Well-Known Seasoned Issuers

B. Testing the Waters

C. Unduly Broad Definition of Accredited Institutional Investor

D. Individual Investors

Registered Offerings Compared to Rule 506 Offerings

E. Certainty of Rules, Conditioning the Market Concerns

F. "Scaled" Disclosure and Smaller Reporting Companies

G. The SEC's Undue Emphasis on Capital Formation

IV. Due Diligence in Registered Offerings

A. Due Diligence and the Integrated Disclosure System

B. Due Diligence

Outside Directors

C. Due Diligence

Underwriters

5. Federalization of Corporate Governance

II. The Federalization of Corporate Governance

Historical Overview

A. Congressional and Judicial Overview

B. The SEC's Role in the Federalization of Corporate Governance

C. More Recent Legislation Federalizing Corporate Governance

D. Federalization of Corporate Governance Benefitting Corporate Interests

III. Recommended Federal Corporate Governance Standards

A. Composition of Boards of Directors and Board Committees

B. Shareholder Say-on-Pay and Related Issues

C. Undue Reliance on State Law

6. Private Securities Litigation

II. The Current Federal Securities Law Framework

Needed Revisions

A. Publicly-Traded Companies

Registered Offerings versus Secondary Market Trading

B. Uniform Level of Mental Culpability

C. Pleading Requirements in Private Securities Litigation

D. The Propriety of Secondary Liability in Private Securities Actions

E. The Unduly Expansive Protection Given to Puffery, Statements of Belief, and Forward-Looking Statements

F. Federal Preemption of Securities Class Actions

G. Broker-Dealers and Investment Advisers

H. Summation

III. Replacement of the Current Private Securities Litigation Framework

A. Recommended Provisions for the Revised Framework

1. A Near Uniform Mental Culpability Standard of Negligence

2. Primary Liability Principles

3. Secondary Liability Principles

4. Elimination of the Reliance Requirement

5. Cap on Damages

B. Summation

7. Insider Trading

II. The Unacceptable Current Insider Trading Framework

A. Setting the Stage

B. Supreme Court Decisions

C. The SEC's Responses to Court Decisions

1. Insider Trading in the Tender Offer Context

Adoption of Rule 14e-3

2. The Misappropriation Theory

Adoption of Rule 10b5-2

3. Selective Disclosure

Adoption of Regulation FD

D. The Elimination of the Improper Benefit Test in Criminal Cases

E. Loopholes Created by the SEC

1. Relaxation oflnsider Liability under Section 16(b)

2. Insider Trading Plans under Rule 10b5-l

F. Conclusion

III. Recommendations for Improved Insider Trading Regulation

A. Requiring Company Disclosure of All Material Information

B. Advance Notice of Insider Trades, Revision of In sider Trading Plans, Repeal of Section 16(b)

C. Adoption of a Comprehensive Access Approach

8. Mergers and Acquisitions

II. Critique of the Current M&A Framework

III. Necessary Revisions for Implementation in the M&A Setting

A. Recommendations for Reform

1. Disclosure of Beneficial Ownership

2. Golden Parachutes

3. Greenmail

4. The Acquirer's Shareholders

5. Repeal of State Takeover Statutes

6. Shareholder Ownership Threshold Requiring Takeover Bid for All Outstanding Voting Shares

7. Measures in Response to Takeover Bids

9. The Securities and Exchange Commission

II. The SEC's Unacceptable Focus

A. Adoption of a Current Reporting System

B. Insulating Liability Exposure for Companies and Their Insiders

C. Enforcement Policies, Practices, and Priorities

D. Declining to Implement Statutory Directives

E. Lack of Enforcement against Insiders of Large Enterprises

F. Summation

III. Reconstituting the Securities and Exchange Commission

A. The Revolving Door Challenge

B. Reconstituting the Composition of SEC Commissioners

10. Summary of Recommendations for Adoption

II. Recommendations for Adoption

A. The Disclosure Regimen of the Federal Securities Laws

1. Propriety of Federal Law Regulating Substantive Fairness

2. The Concept of Materiality

3. The Mandatory Disclosure Framework

B. Issuer Exemptions from Securities Act Registration

1. Regulation D

2. Enhanced Funding of State Securities Regulatory Agencies

3. Regulation A

4. Intrastate Offerings

5. Integration of Primary Exempt Offerings

C. Exemptions for Resales of Securities

D. The Securities Act Registration Framework

1. Disclosure

Securities Act Registration Statements

2. The Registration Process

Time Periods

3. The SEC's Misapplication of Section 28 of the Securities Act

E. Due Diligence in Registered Offerings

1. Outside Directors

2. Underwriters

F. Federalization of Corporate Governance

1. Composition of Boards of Directors and Board Committees

2. Shareholder Say-on-Payand Related Issues

3. Undue Reliance on State Law Principles

G. Private Securities

Litigation

1. Publicly-Traded Companies

2. Uniform Level of Mental Culpability

3. Pleading Requirements in Private Securities Litigation

4. Primary Liability Principles

5. Elimination of the Reliance Requirement

6. Secondary Liability in Private Securities Actions

7. Puffery, Statements of Belief, and Forward-Looking Statements

8. Federal Preemption of Securities Class Actions

9. Broker-Dealers and Investment Advisers

10. Cap on Damages

H. Insider Trading

1. Requiring Company Disclosure of All Material Information

2. Advance Notice of Insider Trades

3. Revision of Insider Trading Plans

4. Repeal of Section 16(b) of the Securities Exchange Act

5. Adoption of the Access Approach

I. Mergers and Acquisitions

1. Federal Law Should Govern Substantive Issues in the M&A Setting

2. Disclosure of Beneficial Ownership

3. Golden Parachute Arrangements

4. Greenmail

5. The Acquirer's Shareholders

6. Repeal of State Takeover Statutes

7. Shareholder Ownership Threshold Requiring Takeover Bid for All Outstanding Shares

8. Measures in Response to Takeover Bids

J. The Securities and Exchange Commission

1. Failure to Adopt an Acceptable Continuous Disclosure Framework

2. Unduly Insulating Liability Exposure for Companies and Their Insiders

Contents note continued: 3. Enforcement Policies, Practices, and Priorities

4. Declining to Implement Statutory Directives

5. Reconstituting the Securities and Exchange Commission

III. Conclusion.

Notes:

Includes bibliographical references and index.

Local Notes:

Acquired for the Penn Libraries with assistance from the Rosengarten Family Fund.

Other Format:

Online version: Steinberg, Marc I. Rethinking securities law.

ISBN:

9780197583142

0197583148

OCLC:

1232012991