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After The Fraud on the Market Doctrine: What Should Replace It?

Like children on Christmas Eve, securities defense attorneys and corporate executives are waiting in hopeful anticipation for the Supreme Court’s coming decision in Halliburton Co. v. Erica P. John Fund, Inc. (“Halliburton II”), which may overrule the “fraud on the market” doctrine (“FOTM”) that was announced over a quarter century ago in Basic v. Levinson.[1] Academics are divided, with probably the majority fearing the loss of general deterrence if the securities class action is substantially undercut. Conversely, a minority (including this author) believe it is remarkable that FOTM has survived as long as it has because it is extraordinarily ill-suited to the real world of securities fraud (as hereafter explained). A third more nervous group of spectators are the managing partners of litigation-oriented law firms, who know that FOTM’s potential abolition would likely imply a steep decline in securities litigation, which is the staple of their practice. Ironically, some of the securities defense attorneys eagerly awaiting FOTM’s demise may next year be learning how to litigate patent cases. Be careful then what you wish for, as you may get it. Read more

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Editor's Tweet: Professor John Coffee on Columbia Law: After The Fraud on the Market Doctrine: What Should Replace It?
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SEC Enforcement: Talking the Talk, But Walking the Walk?

Almost everyone has an opinion about securities enforcement.  Many are disappointed (and even angry) that “few high level executives” have been prosecuted (criminally or even civilly) in connection with the 2008 financial crisis.[1]  Deep in their bunker, the SEC … Read more

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Editor's Tweet: John C. Coffee Jr. of Columbia Law School on SEC Enforcement: Talking the Talk, But Walking the Walk?
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The Institute for the Fiduciary Standard Awards Its First “Oscar”

The Institute for the Fiduciary Standard, a non-profit organization dedicated to the advancement of fiduciary principles, has awarded its first ever Tamar Frankel Fiduciary Prize to Robert A.G. Monks, the corporate governance activist and scholar. The Frankel Fiduciary Prize is … Read more

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‘Neither Admit Nor Deny': Practical Implications of SEC’s New Policy

In a move that appears at once to be shrewd, savvy and largely symbolic, the SEC has modified its longstanding policy that it will not require a defendant to admit or deny liability, or facts that might establish its liability,

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Editor's Tweet: Prof. John C. Coffee, Jr. of Columbia Law School discusses 'Neither Admit Nor Deny': Practical Implications of SEC's New Policy
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Securities Enforcement: 2013 Report Card

This is the season for report cards and grades.  The securities laws are enforced by the plaintiff’s bar and the SEC.  How well are they doing?  What grades do they deserve?

I.  Private Enforcement

In terms of private litigation, 2012 … Read more

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Editor's Tweet: Professor John C. Coffee, Jr. of Columbia Law School discusses Securities Enforcement: 2013 Report Card
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Nominations Invited for First Annual Fiduciary Award Created to Honor Tamar Frankel

The Institute For The Fiduciary Standard, a non-profit organization based in Washington, D.C., has created a prize—to be known as the Tamar Frankel Fiduciary Prize—which will be awarded annually to a person who has made a “significant contribution to the … Read more

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Editor's Tweet: Annual Fiduciary Award Created Honoring Tamar Frankel
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Shareholder Activism and Ethics: Are Shareholder Bonuses Incentives or Bribes?

This is the heyday of institutional investor activism in proxy contests.  Insurgents are running more slates and targeting larger companies.  They are also enjoying a higher rate of success:  66% of proxy contexts this year have been at least partially … Read more

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Editor's Tweet: Professor John C. Coffee Jr. of Columbia Law School discusses whether bonuses from shareholder activists are incentives or bribes?