BLPB readers, the deadline (Oct 18, 2019) is fast approaching for what looks to be a very interesting conference on Fintech Startups and Incumbent Players: Policy Challenges and Opportunities, organized by the Oxford Business Law Blog and the Law, Finance & Technology project at the University of Hamburg. 

A brief description is below. Call for papers is here: Download Call-for-Papers-Fintech-Workshop-in-Oxford-27-03-2020

The potential of financial technology for innovation and growth is well-established by now. Yet startups often face many regulatory challenges in the early years, obstructing market access. Technology firms and incumbent financial institutions are experimenting with new solutions to this problem, often establishing co-operative linkages one with the other. At the same time, governments and regulators have introduced special frameworks that may facilitate the newcomers’ market entry. Among these are regulatory ‘sandboxes’, which provide for a safe experimentation space allowing new market participants to test their services in the real market with a reduced regulatory burden, but under close scrutiny of the supervisor. Governments are continuing to experiment with other formats to help new market entrants with the regulatory complexity, including through incubators and mentorship programmes.

The 4th Oxford Business Law Blog Conference, co-organized by the University of Oxford, the …

When the news came out that Volkswagen had used defeat devices in order to fool regulators into thinking that its cars complied with environmental standards, massive amounts of litigation followed, eventually consolidated into an MDL so sprawling that it literally took me over an hour – plus two calls to Bloomberg – just to get the docket sheet loaded on my computer.

One set of claimants are the bondholders who purchased in an unregistered 144A offering just before the scandal broke.  These bondholders contend that the offering memoranda failed to disclose critical information about the regulatory risks Volkswagen faced, in violation of Rule 10b-5.  They’ve just got one problem: They’d like to bring their claims as a class, but because the bonds did not trade in anything like an efficient market, they cannot make use of the fraud-on-the-market presumption of reliance.  Instead, they’ve turned to Affiliated Ute Citizens v. United States, 406 U.S. 128 (1972), which holds that when a fraud consists of omissions rather than misstatements, reliance may be presumed.

Now, the first issue is, what counts as an omissions-based fraud?  The fraud here included affirmative misstatements, and usually that would be enough prevent the use of Affiliated…

Wrapping up the Mass Tort Deals series, we have suggestions for possible reforms.  (If you want links to the prior reviews, the Mass Torts Litigation Blog has a consolidated list here.)

Burch recognizes that getting real reforms here will be a challenge and that we are not likely to simply scrap the existing structure and start with something new for these cases.  In light of that, she focuses on empowering current and potential stakeholders who will have appropriate incentives to improve how the system functions.

Let’s start with financiers.  Burch’s scholarship has suggested empowering financiers to serve as monitors in this kind of litigation.  She continues that thread here and proposes a system where “plaintiffs could assign a financier a stake in their lawsuit as the contingent fee does now.  In exchange the financier funds the suit on a nonrecourse basis and pays attorneys a billable-hour rate plus some small percentage of the recovery as a bonus.”  In my view, this seems likely to generate much more effective and sophisticated oversight of attorney conduct.  A financier without in-house expertise in the area could simply hire sophisticated counsel to oversee the litigation.  Corporate defendants do this all the time and…