On Saturday, Cathy Hwang, Carliss Chatman, and I released a draft statement on race/racism in business law.  Thus far, we have 242 law professors publicly joining this statement:

We are law professors, and many of us write and teach about business law.

 

We think race and racism are important to the study of business law, just as they are important to the study of any area of law. From slavery and redlining to lack of opportunity in the workplace and limited access to capital, race and racism have always been part of business and business law.

 

To our colleagues and our students: we welcome the opportunity to engage in these discussions and commit to thinking hard about how to incorporate them into our research and our teaching.

Thank you to all of our colleagues who join us in recognizing that issues of race and racism are important to the study and teaching of business law.  Jessica Erickson has also helped compile resources here, which were gathered by soliciting the AALS Business Law Section list-serve.  She will continue to update it as additional resources come in.  If you would like to join the statement, you

I’m delighted to share that former UVA law school classmate and friend, Professor John Anderson, is joining us as a guest blogger at the Business Law Prof Blog on Tuesdays over the next month. 

Professor Anderson teaches Business Associations, Contracts, White Collar Criminal Law, Securities Law, Human Rights, and Law and Philosophy. His recent scholarship focuses on securities enforcement, white collar crime, and intersections of law and philosophy (e.g., business ethics, constitutionalism, problems of pluralism, and human rights). Professor Anderson has been published in leading peer-reviewed journals and top law journals. He recently published a book with Cambridge University Press, Insider Trading: Law, Ethics, and Reform (2018). Professor Anderson has received numerous teaching awards, and he was named the Mississippi College Distinguished Professor of the Year for 2018-2019.  

We’re looking forward to Professor Anderson’s posts, and hope that BLPB readers enjoy them too!

The “expungement” process stockbrokers use to delete complaints from their records has been drawing more and more attention.  Colleen Honigsburg and Mathew Jacob found that brokers who win “expungements are 3.3 times as likely to engage in new misconduct as the average broker.”  As I wrote before, this result may indicate that the process suppresses the investor protection signals sent by customer complaints.  In a paper forthcoming in the Washington and Lee Law Review, I dug into why the purportedly adversarial process for expungements generates these results.  (Shameless plugs: the paper has also been covered by the Business Scholarship Podcast and Ipse Dixit.)  In essence, many of the arbitrations underlying expungements cannot be fairly characterized as approaching adversarial.  A report from the PIABA Foundation found that about 98% of the time, the brokerage firm respondents in these cases did not oppose the request.  This raises real questions about whether we have any reason to believe that the expungement hearings reliably surface information relevant to deciding whether to recommend that a customer complaint be expunged.

Many of these expungement proceedings follow a similar pattern now.  A stockbroker will sue a current or former employer alleging that a customer (who is…

Submissions and nominations of articles are being accepted for the eleventh annual Fred C. Zacharias Memorial Prize for Scholarship in Professional Responsibility.  To honor Fred’s memory, the committee will select from among articles in the field of Professional Responsibility with a publication date of 2020.  The prize will be awarded at the 2021 AALS Annual Meeting.  Please send submissions and nominations to Professor Samuel Levine at Touro Law Center: slevine@tourolaw.edu.  The deadline for submissions and nominations is September 1, 2020.

Kevin Haeberle has a new paper entitled Marginal Benefits of the Core Securities Laws.  He argues that for long-term, diversified investors, additional disclosure-oriented, insider-trading-related, or anti-fraud protections are not likely to provide substantial benefits to these investors.  The paper is worth reading simply for its clear explanations of nuanced market dynamics, as animated by principles from market microstructure economics.  It lucidly explains how bid-ask spreads and trade “footprint” costs arise, and the role information asymmetry plays in each. He argues that these measures of information asymmetry costs for long-term, diversified investors are now extremely limited. He also argues that a number of market mechanisms allow these investors to avoid these costs more generally. With, for example, bid-ask spreads for most large public corporations now literally at their legal minimum size, we will most likely not generate any real investor protection benefits by trying to protect investors by further reducing information asymmetry in secondary market trades. Interestingly, as he explains, this dictates that there is little to gain from using the core securities laws to reduce information asymmetry even if the law and economics thinking on how price discounts protect these same investors is wrong. Investor protection efforts should therefore…