{"id":4740,"date":"2019-11-20T14:09:28","date_gmt":"2019-11-20T19:09:28","guid":{"rendered":"https:\/\/journals.law.harvard.edu\/hblr\/?page_id=4740"},"modified":"2025-02-18T18:26:45","modified_gmt":"2025-02-18T23:26:45","slug":"volume-8-issue-2","status":"publish","type":"page","link":"https:\/\/journals.law.harvard.edu\/hblr\/volume-8-issue-2\/","title":{"rendered":"Volume 8, Issue 2 (2018)"},"content":{"rendered":"
SECURITIES & FINANCIAL REGULATION<\/h5>\n

INVESTOR-DRIVEN FINANCIAL INNOVATION<\/a><\/h3>\n
Kathryn Judge
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Financial regulations often encourage or require market participants to hold particular types of financial assets. One unintended consequence of this form of regulation is that it can spur innovation to increase the effective supply of favored assets. This Article examines when and how changes in the law prompt the spread of \u201cinvestor-driven financial innovations.\u201d Weaving together theory, recent empirical findings, and illustrations, this Article provides an overview of why investors prefer certain types of financial assets to others, how markets respond, and how the spread of investor-driven innovations can transform the structure of the financial system. This examination suggests that investor-driven innovations can enhance efficiency and provide other benefits, but they can also increase complexity, interconnectedness, and rigidity in ways that render the financial system as a whole more fragile.<\/p>\n

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SECURITIES & FINANCIAL REGULATION<\/h5>\n

THE CASE FOR INVESTOR ORDERING<\/a><\/h3>\n
Scott Hirst
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Whether corporate arrangements should be mandated by public law or \u201cprivately ordered\u201d by corporations themselves has been a foundational question in corporate law scholarship. State corporation laws are generally privately ordered. But a significant and growing number of arrangements are governed by \u201ccorporate regulations\u201d created by the U.S. Securities and Exchange Commission (SEC). SEC corporate regulations are invariably mandatory. Whether they should be is the focus of this Article.<\/p>\n

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CORPORATE LAW & GOVERNANCE<\/h5>\n

INDIVIDUAL AUTONOMY IN CORPORATE LAW<\/a><\/h3>\n
Elizabeth de Fontenay
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The field of corporate law is riven with competing visions of the corporation. This Article seeks to identify points of broad agreement by negative implication. It examines two developments in corporate law that have drawn widespread criticism from corporate law scholars: the Supreme Court\u2019s recognition of corporate religious rights in Burwell v. Hobby Lobby and the Nevada legislature\u2019s decision to eliminate mandatory fiduciary duties for corporate directors and officers. Despite their fundamental differences, both resulted in expanding individual rights or autonomy within the corporation\u2014for shareholders and managers, respectively.<\/p>\n

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CORPORATE LAW & GOVERNANCE<\/h5>\n

RETHINKING CORPORATE LAW DURING A FINANCIAL CRISIS<\/a><\/h3>\n
Yair J. Listokin and Inho Andrew Mun
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Since the Financial Crisis of 2008, most reform measures and discussions have asked how the law of financial regulation could be improved to prevent or mitigate future crises. These discussions give short shrift to the role played by corporate law during the Financial Crisis of 2008 and other financial crises. One critical regulatory tool during the crisis was \u201cregulation by deal,\u201d in which healthy financial firms (\u201cacquirers\u201d) would hastily acquire failing firms (\u201ctargets\u201d) to mitigate the crisis. The deals were governed by corporate law, so corporate law played an outsize role in the response to the crisis. But few observers have asked how corporate law\u2014in addition to financial regulation\u2014should govern dealmaking in financial crises. To fill in this gap, this Article focuses on the role played by corporate law during the Financial Crisis of 2008, and asks whether corporate law should be different during a financial crisis than in ordinary times. Using an externality framework\u2014the failure of a systemically important firm can harm the entire economy, and not just the shareholders of the failed firm\u2014this Article identifies a key problem with the current corporate law regime as applied in financial crises: the shareholder value maximization principle as applied to failing target companies. This principle, manifested in the form of shareholder voting rights on mergers and board fiduciary duties to shareholders, is inapplicable to systemically important target firms whose failure would have enormous negative externalities on the rest of the economy. This Article contends that corporate law as applied to systemically important, failing target firms during crises should change as follows: (1) replace shareholder merger voting rights with appraisal rights, and (2) alter fiduciary duties so that directors and officers of those failing target firms consider the interests of the broader economy.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

SECURITIES & FINANCIAL REGULATION INVESTOR-DRIVEN FINANCIAL INNOVATION Kathryn Judge Financial regulations often encourage or require market participants to hold particular […]<\/p>\n","protected":false},"author":109,"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-4740","page","type-page","status-publish","hentry"],"jetpack_shortlink":"https:\/\/wp.me\/PgKEUK-1es","jetpack-related-posts":[{"id":5259,"url":"https:\/\/journals.law.harvard.edu\/hblr\/securities-financial-regulation\/","url_meta":{"origin":4740,"position":0},"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":4233,"url":"https:\/\/journals.law.harvard.edu\/hblr\/hblr-online-volume-3\/","url_meta":{"origin":4740,"position":1},"title":"Volume 3 (2012\u20132013)","author":"ehansen","date":"July 31, 2016","format":false,"excerpt":"ENVIRONMENTAL, SOCIAL, & GOVERNANCE WHY ARE FOREIGN INVESTMENTS IN DOMESTIC ENERGY PROJECTS NOW UNDER CFIUS SCRUTINY? Stephen Heifetz and Michael Gershberg CFIUS now actively reviews and sometimes alters transactions that result in foreign control of U.S. energy companies. There are three primary drivers behind this recent scrutiny. SECURITIES & FINANCIAL\u2026","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":4234,"url":"https:\/\/journals.law.harvard.edu\/hblr\/hblr-online-volume-4\/","url_meta":{"origin":4740,"position":2},"title":"Volume 4 (2013\u20132014)","author":"ehansen","date":"July 31, 2016","format":false,"excerpt":"SECURITIES & FINANCIAL REGULATION AN EVALUATION OF THE U.S. REGULATORY RESPONSE TO SYSTEMIC RISK AND FAILURE POSED BY DERIVATIVES Kimberly Summe This Article will focus on Titles II and VII of the Dodd-Frank Act in order to examine how transacting in derivatives has changed in the aftermath of this legislation\u2026","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":4235,"url":"https:\/\/journals.law.harvard.edu\/hblr\/hblr-online-volume-2\/","url_meta":{"origin":4740,"position":3},"title":"Volume 2 (2011\u20132012)","author":"ehansen","date":"July 31, 2016","format":false,"excerpt":"BANKRUPTCY RESTRUCTURING SOVEREIGN DEBT UNDER LOCAL LAW: ARE RETROFIT COLLECTIVE ACTION CLAUSES EXPROPRIATORY? Melissa A. Boudreau The European sovereign debt crisis has generated a number of controversial restructuring proposals that would have seemed appropriate only for emerging markets just a few years ago, but now are among the few options\u2026","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":4892,"url":"https:\/\/journals.law.harvard.edu\/hblr\/volume-14-issue-1\/","url_meta":{"origin":4740,"position":4},"title":"Volume 14, Issue 1","author":"wgu","date":"December 17, 2021","format":false,"excerpt":"BUSINESS & CORPORATIONS RETHINKING COMMERCIAL LAW'S UNCERTAIN BOUNDARIES Steven L. Schwarcz Although it is an essential part of business law, commercial law has uncertain boundaries. That uncertainty creates significant legal ambiguities and inconsistencies, confusing lawyers and courts and causing misinterpretations that disrupt commerce and reduce efficiency. This Article hypothesizes and\u2026","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":2514,"url":"https:\/\/journals.law.harvard.edu\/hblr\/volume-2-issue-2\/","url_meta":{"origin":4740,"position":5},"title":"Volume 2, Issue 2 (2012)","author":"wpengine","date":"November 6, 2012","format":false,"excerpt":"SECURITIES & FINANCIAL REGULATION COMPLEXITY, INNOVATION, AND THE REGULATION OF MODERN FINANCIAL MARKETS Dan Awrey The intellectual origins of the global financial crisis (GFC) can be traced back to blind spots emanating from within conventional financial theory. These blind spots are distorted reflections of the perfect market assumptions underpinning the\u2026","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/journals.law.harvard.edu\/hblr\/wp-json\/wp\/v2\/pages\/4740","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/journals.law.harvard.edu\/hblr\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/journals.law.harvard.edu\/hblr\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/journals.law.harvard.edu\/hblr\/wp-json\/wp\/v2\/users\/109"}],"replies":[{"embeddable":true,"href":"https:\/\/journals.law.harvard.edu\/hblr\/wp-json\/wp\/v2\/comments?post=4740"}],"version-history":[{"count":0,"href":"https:\/\/journals.law.harvard.edu\/hblr\/wp-json\/wp\/v2\/pages\/4740\/revisions"}],"wp:attachment":[{"href":"https:\/\/journals.law.harvard.edu\/hblr\/wp-json\/wp\/v2\/media?parent=4740"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}