The Yale Law Journal

Securities Law


On “Confetti Regulation”: The Wrong Way to Regulate Gamified Investing

Kyle Langvardt & James Fallows Tierney

Robinhood and similar investment apps bear a disturbing resemblance to video slot machines. This kind of “gamified” product design drives investors to lose money by overtrading. But if regulators try to cure the problem by de-gamifying the software, they will pick a First Amendment fight that securi…


A Cooperative Federalism Approach to Shareholder Arbitration

Zachary D. Clopton & Verity Winship

Arbitration has begun to take a new form: mandatory arbitration provisions built into corporate charters and bylaws. The debate about the merits of arbitration is well worn, but its application to shareholder claims opens the door to a different set of responses. This Essay provides one, explaining …


Unlocking the Potential of Art Investment Vehicles

Alice Xiang

Fine art is increasingly not only purchased for aesthetic pleasure, but also as a financial asset, expanding the art investment market. However, the structure of art investment means that access to the market is restricted. This Comment offers solutions to democratize and leverage the potential of t…


Their Bark Is Bigger Than Their Bite: An Essay on Who Bleeds When the Wolves Bite

Jonathan Macey

Delaware Chief Justice Leo Strine is of the view that America is in terrible shape. Specifically, he identifies deep problems in the fabric of American society, which include “growing income inequality, inflated executive pay, job losses, [and] wage stagnation.” Having noted these problems, Strine l…


Hedge Fund Activism, Short-Termism, and a New Paradigm of Corporate Governance

Steven A. Rosenblum

Chief Justice Strine’s important article, Who Bleeds When the Wolves Bite?, brings a much-needed perspective to the modern corporate governance debate. Chief Justice Strine looks at the corporate governance world through the lens of what he calls the “human investors,” i.e., the ordinary individuals…


Shareholder Proposal Settlements and the Private Ordering of Public Elections

Sarah C. Haan

Reform of campaign finance disclosure has stalled in Congress and at various federal agencies, but it is steadily unfolding in a firm-by-firm program of private ordering. Today, much of what is publicly known about how individual public companies spend money to influence federal, s…


Securities Settlements in the Shadows

Urska Velikonja

The Dodd-Frank Act authorized the Securities and Exchange Commission (“SEC”) to bring almost any enforcement action in an administrative proceeding. Before Dodd-Frank, the SEC could secure civil fines against registered broker-dealers and investment advisers in administrative proceedings, but had to…


The Rise of Bank Prosecutions

Brandon L. Garrett

Before 2008, prosecutions of banks had been quite rare in the federal courts, and the criminal liability of banks and bankers was not a topic that received much public or scholarly attention. In the wake of the last financial crisis, however, critics have begun to ask whether prosecutors adequately …


Returning to Common-Law Principles of Insider Trading After United States v. Newman

Richard A. Epstein

Spurred on by the recent Second Circuit decision in United States v. Newman, this Feature examines the proper scope of the prohibition against insider trading under the securities laws. It argues that in some instances the law does not reach far enough, while in other instances t…


Unpacking Wolf Packs

Carmen X.W. Lu

Wolf-pack activism has surged in the past three years. A wolf pack is composed of a group of activist investors working in unison to gain control of corporate boards.1 These activist investors collectively buy stock in a public company and then leverage their aggregate stake to influence …


Bounds in Bank Regulation

Sung Eun (Summer) Kim

Introduction In his recent essay, Bounded Institutions,1 Yair Listokin examines bounded and unbounded structures as two alternative designs for principals to delegate regulatory authority to their agents.2 Bounds refer to numerical or quantifiable limitations that are set by the principa…


Locked In: The Competitive Disadvantage of Citizen Shareholders

Anne M. Tucker

Introduction Indirect investors—especially mutual fund investors—are often low-dollar, low-incentive, rationally apathetic investors facing enormous information asymmetries and collective action problems. These traits raise difficult corporate governance questions about how indirect i…


The Casualty of Investor Protection in Times of Economic Crisis

Kathleen Claussen

118 Yale L.J. 1545 (2009).


Protecting a Business Entity Client from Itself Through Loyal Disclosure

Paula Schaefer

Many attorneys are unaware of or misunderstand an important tool they can use to protect their business organization clients: the ability to disclose the client’s confidences. In jurisdictions with “loyal disclosure” rules—rules adopted by the Securities and Exchange Commission and the Ameri…


We Don’t Want To Conquer You; We Have Enough To Worry About: The Russian Sovereign Wealth Fund

Arina V. Popova

Recently, few economic topics have received more political attention than the potential impact of Sovereign Wealth Funds (SWFs). Until recently, scholarly and political attention to SWFs was almost exclusively focused on the impact these funds may have on Western countries. The little attention paid…


Foreign Direct Investment by Sovereign Wealth Funds

Mark E. Plotkin

Sovereign Wealth Funds (SWFs) recently have captured America’s attention. Much of that attention has been critical, with a particular focus on whether the U.S. economy is becoming vulnerable to the policy whims of foreign states. Yet SWFs face significant domestic commercial and political pressure…


Should We Tax Sovereign Wealth Funds?

Victor Fleischer

Important characteristics distinguish sovereign wealth fund investment, which is often troubling, from private foreign investment, which is generally beneficial. Allowing sovereign wealth funds to own equity stakes in American companies encroaches on the autonomy of U.S. industrial and foreign polic…


Taxing the Bandit Kings

Mihir A. Desai & Dhammika Dharmapala

The rise of significant inbound capital flows originating from sovereign wealth funds (SWFs) has occasioned a debate over the appropriate regulatory and tax treatment of these funds. In particular, it has been argued that the tax exemption currently enjoyed by SWFs confers an advantage on these enti…


Fixing Freezeouts

Guhan Subramanian

115 Yale L.J. 2 (2005)

Freezeout transactions, in which a controlling shareholder buys out the minority shareholders, have occurred more frequently since the stock market downturn of 2000 and the Sarbanes-Oxley Act of 2002. While freezeouts were historically executed as statutory mergers, recent Dela…


Bargaining in the Shadow of Takeover Defenses

Guhan Subramanian

113 Yale L.J. 621 (2003)

For decades, practitioners and academic commentators who believe that target boards should have broad discretion to resist hostile takeover attempts have put forward the "bargaining power hypothesis" to support their view. This hypothesis states that a target with strong tak…


How To Fix Wall Street: A Voucher Financing Proposal for Securities Intermediaries

Stephen J. Choi & Jill E. Fisch

113 Yale L.J. 269 (2003)

Securities market intermediaries reduce the collective action problem facing investors in the capital markets. Analysts provide securities research. Proxy advisory firms assist investors in determining how to vote their shares. Even shareholders bringing proxy contests can be…


Insider Abstention

Jesse M. Fried

113 Yale L.J. 455 (2003)

Scholars writing on insider trading have long believed that insiders can beat the market simply by using nonpublic information to decide when not to trade. Using a simple model, this Essay has shown that the conventional wisdom is wrong. Insiders prevented from trading while …


A Dilution Mechanism for Valuing Corporations in Bankruptcy

Barry E. Adler & Ian Ayres

111 Yale L.J. 83 (2001)

This Article proposes a new mechanism for valuing firms in bankruptcy. Under the "senior dilution" mechanism, a court would dilute the reorganized stock issued to senior claimants by issuing additional shares to junior claimants until there was no excess demand for the stock a…


The Rise of Dispersed Ownership The Roles of Law and the State in the Separation of Ownership and Control

John C. Coffee Jr.

111 Yale L.J. 1 (2001)

Deep and liquid securities markets appear to be an exception to a worldwide pattern in which concentrated ownership dominates dispersed ownership. Recent commentary has argued that a dispersed shareholder base is unlikely to develop in civil-law countries and transitional econo…


Once in Doubt

Robert Kry

110 Yale L.J. 725 (2001)