{"id":4452,"date":"2018-01-02T22:33:14","date_gmt":"2018-01-03T03:33:14","guid":{"rendered":"http:\/\/journals.law.harvard.edu\/hblr\/?page_id=4452"},"modified":"2025-08-19T12:54:58","modified_gmt":"2025-08-19T16:54:58","slug":"hblr-online-volume-8","status":"publish","type":"page","link":"https:\/\/journals.law.harvard.edu\/hblr\/hblr-online-volume-8\/","title":{"rendered":"Volume 8 (2017-2018)"},"content":{"rendered":"\n
SECURITIES & FINANCIAL REGULATION<\/h5>\n\n\n\n

BLURRING THE EDGES OF CORPORATE LAW: INSIDER TRADING AND THE MARTOMA <\/em>DECISION<\/a><\/strong><\/h3>\n\n\n\n
Azfer A. Khan<\/em><\/h6>\n\n\n\n

In its recent decision, the Second Circuit in United States v. Martoma overturned key aspects of its decision in United States v. Newman. Justifying this departure based on the Supreme Court\u2019s ruling in Salman v. United States, the majority in Martoma held that there is no requirement to prove a meaningfully close personal relationship in order to find liability for insider trading under Rule 10b-5. While Martoma ostensibly changed the test for tippee liability, this Article argues that the substantive outcome for most insider trading cases is likely to remain unaffected. However, because Martoma expanded the scope of tippee liability, more claims can now get into court. This expansion should be resisted under the traditional Santa Fe doctrine because it threatens to blur the distinction between corporate law and securities law. This Article first provides a quick roadmap to insider trading law, then dives into an analysis of Martoma and the decisions immediately preceding it, and concludes by offering perspectives on what the likely impact of the decision will be.<\/p>\n\n\n\n

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SECURITIES & FINANCIAL REGULATION \u2022 INVESTING & ASSET MANAGEMENT<\/h5>\n\n\n\n

SIDESTEPPING THE RAT HOLES: INVESTMENT RISK AND SECURITIES LAWS<\/strong><\/a><\/h3>\n\n\n\n
Thomas M. Selman<\/em><\/h6>\n\n\n\n

This Article presents a novel understanding of the purpose of federal securities laws as the management of investment risk. Those laws should be treated as a whole. When two rules, even under different statutes, address the same risk, they should be applied concomitantly. For example, broker-dealer regulation under the Securities Exchange Act of 1934 might justify relaxation of prospectus delivery requirements in the Securities Act of 1933.<\/p>\n\n\n\n

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ENTREPRENEURSHIP & STARTUPS \u2022 SECURITIES & FINANCIAL REGULATION<\/h5>\n\n\n\n

HOW DO I SELL MY CROWDFUNDED SHARES? DEVELOPING EXCHANGES AND MARKETS TO TRADE SECURITIES ISSUED BY START-UPS AND SMALL COMPANIES<\/strong><\/a><\/h3>\n\n\n\n
Janet Austin<\/em><\/h6>\n\n\n\n

Governments worldwide are increasingly recognizing that assisting the development of start-ups and small to medium enterprises may be critical to fostering job creation and economic growth. As such, there is a concerted effort to rework securities regulation to encourage the funding of these businesses through innovative approaches such as crowdfunding. However, one major problem with investing in securities issued through crowdfunding is that investors typically have limited-to-no ability to sell the securities. There are a number of over-the-counter, venture and small company markets trying to bridge that gap and proposals in some countries to develop new markets for these types of securities. However, such markets present significant regulatory challenges, as they have historically been plagued by fraud and \u201cpump and dump\u201d manipulation schemes. This Article considers these regulatory challenges and explores how regulators can work to improve the integrity of these markets as a way of encouraging their development.<\/p>\n\n\n\n

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TECHNOLOGY & INNOVATION \u2022 CORPORATE LAW & GOVERNANCE<\/h5>\n\n\n\n

BULLISH ON BLOCKCHAIN: EXAMINING DELAWARE’S APPROACH TO DISTRIBUTED LEDGER TECHNOLOGY IN CORPORATE GOVERNANCE LAW AND BEYOND<\/strong><\/a><\/h3>\n\n\n\n
Wonnie Song<\/em><\/h6>\n\n\n\n

The buzz around blockchain is getting ever louder. Mergers & Acquisitions (M&A) activity in the blockchain technology sector rose 33.3% between Q2 2016 and Q2 2017. Increased legislative response is perhaps the clearest signal yet that blockchain technology may be more than a passing fad. As of September 2017, several jurisdictions in the United States have amended their state laws to explicitly legitimize the use of blockchain technology in both commerce and corporate governance. With a focus on Delaware\u2019s embrace of blockchain technology, this Article examines the potential role of distributed ledgers in corporate governance and capital market transactions. The Article then considers the solutions such technology offers, as well as some barriers its advocates might face in pursuing its wide-scale adoption.<\/p>\n\n\n\n

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CORPORATE LAW & GOVERNANCE<\/h5>\n\n\n\n

THE HIGH COST OF FEWWER APPRAISAL CLAIMS IN 2017: PREMIA DOWN, AGENCY COSTS UP<\/a><\/strong>
<\/i><\/h3>\n\n\n\n
Ma<\/i>tthew Schoenfeld<\/em><\/h6>\n\n\n\n

This Article considers the preliminary results of an ongoing effort to discourage appraisal litigation. Since the August 2016 reforms to the Delaware appraisal statute, Chancery has issued a slew of at-or-below merger price appraisal opinions in cases such as Clearwire and PetSmart, while simultaneously pinioning fiduciary litigation by reiterating the principles of Corwin. The result\u2014as one would expect when costs are raised and benefits are reduced\u2014has been that fewer deals are being challenged via appraisal: In 1H 2017, the number of deals challenged fell by 33%. Those who successfully advocated for curbs on the practice had argued that appraisal claims lowered deal premia by incenting buyers to withhold top dollar, thereby hurting nonappraising shareholders. On their view, curtailment of appraisal should have sent premia upwards. But year-to-date the average U.S. target premium of 22.4% is the lowest of any year in recent history. The average target premium in 2Q 2017 of 19.3% was the single-lowest of the fifty prior quarterly observations; thus far, 3Q 2017, at 19.6%, is tracking as the second-lowest. Amid the pronounced decline in merger premia, change-in-control payouts have expanded as a percentage of transaction value. When analyzed in concert with other measures indicative of agent rent-seeking\u2014such as target premium to 52-week high over varying periods\u2014the evidence points to a substantial transfer of value from target shareholders to selling chief executive officers (CEOs), who have adapted to an environment rendered more permissive by the weakening of the shareholder litigation \u201ccheck\u201d that had formerly restrained such behavior.<\/p>\n","protected":false},"excerpt":{"rendered":"

SECURITIES & FINANCIAL REGULATION BLURRING THE EDGES OF CORPORATE LAW: INSIDER TRADING AND THE MARTOMA DECISION Azfer A. Khan In its […]<\/p>\n","protected":false},"author":6,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"jetpack_post_was_ever_published":false,"footnotes":""},"class_list":["post-4452","page","type-page","status-publish","hentry"],"jetpack_shortlink":"https:\/\/wp.me\/PgKEUK-19O","jetpack-related-posts":[{"id":4298,"url":"https:\/\/journals.law.harvard.edu\/hblr\/hblr-online-volume-7\/","url_meta":{"origin":4452,"position":0},"title":"Volume 7 (2016\u20132017)","author":"ehansen","date":"November 26, 2016","format":false,"excerpt":"TAXATION WHEN THE IRS PREFERS NOT TO: WHY DISPARATE REGULATORY APPROACHES TO SIMILAR DERIVATIVE TRANSACTIONS HURTS TAX LAW Leon Dalezman and Philip Lenertz This Article examines decisions made by the Internal Revenue Service on whether to promulgate regulations pursuant to three different but related provisions of the Internal Revenue Code:\u2026","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":3487,"url":"https:\/\/journals.law.harvard.edu\/hblr\/volume-3-issue-2\/","url_meta":{"origin":4452,"position":1},"title":"Volume 3, Issue 2 (2013)","author":"wpengine","date":"October 15, 2013","format":false,"excerpt":"SECURITIES & FINANCIAL REGULATION \u2022 LEGAL & REGULATORY COMPLIANCE PRIVATE REGULATION OF INSIDER TRADING IN THE SHADOW OF LAX PUBLIC ENFORCEMENT: EVIDENCE FROM CANADIAN FIRMS Laura Nyantung Beny and Anita Anand Like firms in the United States, many Canadian firms voluntarily restrict trading by corporate insiders beyond the requirements of\u2026","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":5259,"url":"https:\/\/journals.law.harvard.edu\/hblr\/securities-financial-regulation\/","url_meta":{"origin":4452,"position":2},"title":"Securities & Financial Regulation","author":"wgu","date":"February 15, 2025","format":false,"excerpt":"VOLUME 15 \u2022 COLUMNS THE DUAL CLASS DILEMMA AND THE SUNSET-CLAUSE SOLUTION\u00a0 Adrian Brown The desirability of dual-class stock has been a source of substantial controversy. Some scholars, commentators, and industry participants are wholly in favor of such arrangements. Others are wholly opposed. While neither of these diametrically opposed views\u2026","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":5073,"url":"https:\/\/journals.law.harvard.edu\/hblr\/volume-13-issue-2\/","url_meta":{"origin":4452,"position":3},"title":"Volume 13, Issue 2","author":"wgu","date":"March 27, 2024","format":false,"excerpt":"BANKING BANKING ON A CURVE: HOW TO RESTORE THE COMMUNITY REINVESTMENT ACT Peter Conti-Brown and Brian D. Feinstein\u00a0 This Article suggests that the federal government\u2019s primary financial-regulatory tool for combating wealth inequality is broken. Intended to push banks towards deeper engagement with lower-income and minority communities, the Community Reinvestment Act\u2026","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":5347,"url":"https:\/\/journals.law.harvard.edu\/hblr\/volume-15-issue-1\/","url_meta":{"origin":4452,"position":4},"title":"Volume 15, Issue 1","author":"wgu","date":"March 4, 2025","format":false,"excerpt":"SECURITIES & FINANCIAL REGULATION CAN SECTION 11 BE SAVED?: \u201cTRACING\u201d A PATH TO ITS SURVIVAL John C. Coffee, Jr. & Joshua Mitts Last term, a unanimous Supreme Court held in Slack Techs. v Pirani that purchasers of securities must \u201ctrace\u201d their shares to the registration statement that contains the alleged\u2026","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1214,"url":"https:\/\/journals.law.harvard.edu\/hblr\/volume-1-issue-1\/","url_meta":{"origin":4452,"position":5},"title":"Volume 1, Issue 1 (2011)","author":"wpengine","date":"June 24, 2011","format":false,"excerpt":"FOREWORD Lucian A. Bebchuk SECURITIES & FINANCIAL REGULATION ON THE DODD-FRANK ACT Edolphus \"Ed\" Towns SECURITIES & FINANCIAL REGULATION ON THE DODD-FRANK ACT Bobby L. Rush SECURITIES & FINANCIAL REGULATION DERIVATIVES AND THE LEGAL ORIGIN OF THE 2008 CREDIT CRISIS Lynn A. 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