Today I’m plugging my colleague Elisabeth de Fontenay’s new article, despite the existential threat it poses to my specialty. 

InDo the Securities Laws Matter?, de Fontenay compares the market for syndicated loans, which are not treated as securities, to the market for bonds, which are.  She finds that the market for syndicated loans is as deep and as liquid as the market for bonds, suggesting that the mandatory disclosure regime that governs bonds, but not loans, is unnecessary.

As she puts it in her abstract:

One of the enduring principles of federal securities regulation is the
mantra that bonds are securities, while commercial loans are not. Yet the
corporate bond and loan markets in the U.S. are rapidly converging,
putting significant pressure on the disparity in their regulatory treatment.
As securities, corporate bonds are subject to onerous public disclosure
obligations and liability regimes, which corporate loans avoid entirely. This
longstanding regulatory distinction between loans and bonds is based on
the traditional conception of a commercial loan as a long-term relationship
between the borrowing company and a single bank, in contrast to bonds,
which may be issued to widely dispersed retail investors and are traded in a
liquid market.

…

Elizabeth Pollman at the Loyola Law School Los Angeles, recently posted her paper, A Corporate Right to Privacy, on SSRN (forthcoming in the Minnesota Law Review 2014).  This paper timely weighs in on the corporate personhood debate by addressing one aspect of that question:  privacy.

 Abstract: The debate over the scope of constitutional protections for corporations has exploded with commentary on recent or pending Supreme Court cases, but scholars have left unexplored some of the hardest questions for the future, and the ones that offer the greatest potential for better understanding the nature of corporate rights. This Article analyzes one of those questions — whether corporations have, or should have, a constitutional right to privacy. First, the Article examines the contours of the question in Supreme Court jurisprudence and provides the first scholarly treatment of the growing body of conflicting law in the lower courts on this unresolved issue. Second, the Article examines approaches to determining the scope of corporate constitutional rights and argues that corporate privacy rights should be evaluated not by reference to the corporate form itself or a notion of corporate personhood, but rather by reference to the privacy interests of the various people involved…

Well, it’s almost exam time at most law schools, and by the end of this week, I have to turn in my first exam to the registrar.  I’m teaching Securities Litigation, and it’s mostly a lecture course – the first time I’ve ever taught.  I knew writing an exam would be difficult, but I didn’t anticipate all of the types of issues I would experience. 

Mostly, I’m trying to develop one or two solid issue-spotter-type questions for them to examine. 

The first and most obvious concern is making sure that it has varying levels of difficulty, so that it distinguishes between students who are better and less-well prepared.

Additionally, since I haven’t done this before, I need to make sure that it takes the right amount of time to complete – it’s an 8 hour take home; I’m guessing that erring on the shorter side is preferable to longer, since I’m likely to underestimate the difficulty of the material.

I also find, as I develop the fact pattern, that it really forces me to confront which areas we did not cover extensively, and which areas we did (thus perhaps offering a guide for edits to the syllabus in the future)…

My co-bloggers Haskell Murray and Anne Tucker recently posted their views on FOMO (“fear of missing out”) and family. See here and here. As an old guy, I didn’t know what FOMO meant until Haskell defined it, but I think the issues Haskell and Anne raise about balancing work and personal time are important.

My youngest child is almost 24 years old, so it’s been a while since I had to face the conflict between my professional life and raising a family. But it was a tough struggle. I decided to leave my job as a corporate litigator and enter legal education after I missed two consecutive Easters with my children due to hostile takeover cases. I loved the work, but I loved the time with my family more.

When I began teaching, I had three young children (4 months to 4 years old), and a fourth child was born three years later. I decided to pack as much work as I could into an 8:00-5:00 workday, and spend as much of the the rest of my time as I could with my kids.

It wasn’t always easy. I sometimes had to remind myself that my job was just…

As I write this on Friday night (to be posted automatically on Saturday morning, during which time I will be in transit), ILEP’s latest symposium, Business Litigation and Regulatory Agency Review in the Era of the Roberts Court, is just concluding (you can see a list of the papers presented here, which I believe will all eventually be published in the Arizona Law review).

The biggest subject for discussion was basically the future of the securities class action – or any kind of business litigation, really – given not only the potential of Halliburton to eliminate or severely restrict securities class actions, but given recent decisions like this one upholding a mandatory arbitration provision unilaterally adopted into a REIT’s bylaw. 

The final panel, and thus the one freshest in my mind, explored whether states have the ability under the Federal Arbitration Act to limit the power of corporations to impose mandatory arbitration to resolve shareholder disputes.  I think that’s a really interesting question – whether either states can, as a function of their ability to regulate corporations, flatly forbid the adoption of mandatory arbitration agreements in corporate charters and bylaws, in the same way they otherwise regulate corporate…

Tyler Cowen has more on the value of high-frequency trading here.

By the way, if you’re not familiar with Tyler Cowen’s blog, Marginal Revolution, you should check it out. Cowen is an economist at George Mason University and he always has interesting things to say on issues of public policy. I don’t always agree with him, but his comments are always thought-provoking.

On Monday, I posted links to books and articles on high-speed, computerized trading and its effect on securities markets.  A reader has made me aware of another recent law review article on the phenomenon. It’s The New Financial Industry, by Tom C. W. Lin, available here.