The Logic of Securities Law
Cambridge University Press, 5/4/2017
EAN 9781107158504, ISBN10: 1107158508
Hardcover, 225 pages, 22.9 x 15.2 x 1.4 cm
Language: English
This book opens with a simple introduction to financial markets, attempting to understand the action and the players of Wall Street by comparing them to the action and the players of main street. Firstly, it explores the definition of a security by its function, the departure from the buyer beware environment of corporate law and the entrance into the seller disclose environment of securities law. Secondly, it shows that the cost of disclosure rules is justified by their capacity to combat irrationalities, fads, and panics. The third section explains how the structure of class actions is designed to improve deterrence. Next it explores the economic harm from insider trading and how the law fights it. In sum, the book shows how all these parts of securities law serve the virtuous cycle from liquidity to accurate prices and more trading and how the great recession showed that our securities regulation reacted mostly adequately to the crisis.
Foreword Richard Posner
1. Introduction. Real markets and financial markets
Part I. Definition of a Security
When to Leave Buyer Beware for Seller Disclose?
2. Toward defining a security
3. The vacuous definition of a security
4. The function of investment contract
5. Pricing mechanisms
6. From the sale of business doctrine to Gustafson
7. Gustafson works!
8. Definition conclusion
Part II. Disclosure
Why Subsidize Informed Traders?
9. Introduction
10. An overview of disclosure theories
11. The failure of the corporate disclosure decision
Part III. Deterrence of Securities Fraud
12. Introduction to deterrence intensity
13. Comparing the economic function of deceit to that of securities fraud
14. Reliance in deceit and securities fraud
15. Conclusion of deterrence intensity
Part IV. Insider Trading
16. Introduction to insider trading
17. Insider trading law
18. Defining insiders
19. Concluding the insider trading analysis
Part V. The Virtuous Cycle of Liquid Markets, Accurate Prices and Cheap Trading
20. The virtuous cycle
21. Closing note
financial crises and securities law.