Small Businesses and Investors Give New SEC Regulation an A+

By: Jordan Sayfie, 2L, Journal Staff Member

In 2012 Congress passed the “Jumpstart Our Business Startups” or JOBS Act, which is intended to encourage funding of small businesses by easing securities regulations. On March 25, 2015, the SEC adopted what is being referred to as “Regulation A+.” The new regulation expands the archaic restriction of Regulation A, and offers small businesses a way to raise millions through investment without going public.

Morrison Standards: What Truly Constitutes Domestic Activity?

By: Sheila Murugan, 2L, Journal Staff Member

Sheila Murugan

The 2010 Morrison v. National Australia Bank Ltd., 561 U.S. 247, decision has taken center stage on cases occurring as recently as last month. In Morrison, the Supreme Court created a test for circumstances under which plaintiff-investors can claim fraud in violation of Rule 10b-5 within Section 10(b) of the Securities and Exchange Act of 1934. This test requires fraud to occur under one of two circumstances: involvement with securities in a U.S. exchange, or involvement with domestic transactions in securities not registered on U.S. exchanges. Morrison at 262, 273-74. One issue of concern that has come to light regarding this test is how the court defines “domestic transactions.”

Trading Around the World: the Morrison precedent

By: Gregory VanderWoude, 2L, Journal Staff Member

Gregory VanderWoude

After electing its new prime minister, Greece was able to negotiate a four-month extension in its bailout, buying time to repay its creditors. See Greece Bailout: EU ‘mediating Greek Row with Spain and Portugal, In today’s globally connected economy, it is unremarkable for a sovereign nation—Greece—to approach other countries (that is, the Eurozone) for assistance. As sensible as that sounds, the remedies in the United States for plaintiff-investors who have been defrauded appear not to recognize this global state of affairs. As John Birkenheier and George Vasios explain, the Supreme Court has held that Section 10(b) of the Securities Exchange Act only applies to transactions involving securities registered in the U.S. or to domestic transactions in securities that are not registered on a U.S. exchange. See generally, Morrison v. National Australia Bank Ltd., 561 U.S. 247 (2010). Thus, even though foreign securities may also be listed on a domestic exchange, if the securities were purchased outside the United States, they do not meet the Morrison criteria. See e.g., In Re Royal Bank of Scotland Grp. PLC Sec. Litig., 765 F.Supp.2d  327 (S.D.N.Y. 2011).


By: Jewell Briggs, 2L, Journal Staff Member

Jewell Briggs

Mark Klock, in his article entitled Do Class Action Filings Affect Stock Prices? The Stock Market Reaction to Securities Class Actions Post PSLRA, which is set to be published in Volume 15, Issue 2 of the Michigan State University Journal of Business & Securities Law, quantifies the statistical impact of court filings on stock prices using a larger data set than ever previously used. Klock shows that filings in the Ninth Circuit have a greater negative impact on stock price than do similar filing in other circuits, even the comparable second circuit. Why is there this difference? Why do Ninth Circuit filings have such a seemingly abnormal impact on stock prices? 

New Basis for Section 10(b) Liability: Controversial Circuit Split

By: Hillary Szawala, 3L, Journal Staff Member

Hillary Szawala

In his article, Do Class Action Filings Affect Stock Prices? The Stock Market Reaction to Securities Class Actions Post PSLRA, Mark Klock examines the impact of securities class action filings on the stock market in recent years. While Klock finds that all securities class actions negatively impact stock market prices, he concludes that firms facing Section 10(b) securities fraud claims experience the greatest decline in stock value. In Stratte-McClure v. Morgan Stanley, 2015 WL 136312 (2d Cir. Jan. 12, 2015), the Second Circuit issued a controversial decision with the potential to significantly increase the number of publicly traded U.S. companies exposed to Section 10(b) liability. 

Being the boss: It’s more complicated than you might think.

By: Courtney Schoch, 2L, Journal Staff Member

Courtney Schoch

We’ve all done it − thought about what we’d do differently if we were the boss. Thinking and doing, however, are not synonymous.  What would you really do if given the opportunity, and what’s more – the responsibility, of being in charge?   What are your first steps on the job? Communicating expectations clearly should be the starting point.  Take it one step further and consider the day-to-day obligations.  Are you providing structure and ending meetings on the right note

Importance of Compliance in the International Financial Services Market

By: Daniel Brick, 3L, Journal Staff Member

Daniel Brick

Regulation in foreign securities trading has been increasingly scrutinized in the past several years due in large part to what can be best characterized as the “global financial crisis.” Many countries, including the United States with its Dodd-Frank Act, enacted legislation to combat the potential for another financial collapse. Furthermore, financial institutions are equally more scrutinized in their management and compliance with new regulations.

The Decline in Securities Class Action Filings: All Due to the 2014 Bull Market?

By: Erin Frazer, 3L, Journal Staff Member

Erin Frazer

At the beginning of this year, a commentator for the Wall Street Journal LawBlog remarked that 2014 was a “subdued year for securities class actions.” The number of class action filings was stagnant, and the size of settlements sharply declined.

The Growth of Shareholder Activism: A Blessing and A Curse that is Here to Stay

By: Alan Williams, Journal Staff Member

Alan Williams

You might not be able to recognize him if you were to bump into him in a crowded, but the mere mention of his name causes fear in corporate boardrooms up and down the Dow, Nasdaq, and S&P 500. His name, Carl Ichan: activist shareholder extraordinaire. (Carl Icahn Says “Jump” And The Market Asks “How High?”,

Sunsets Are Not Always Pretty

By: Jordan Sayfie, 2L, Journal Staff Member

Sunset provisions in legislation can serve a legitimate function in narrowing laws in a way that ensures they serve their intended purpose. Additionally, sunset provisions force legislators to determine specific goals before enacting laws, and can make a piece of unfavorable legislation more palatable. Because sunset provisions force legislators to set priorities and outline concrete goals, many voters see sunset provisions as preferable when it comes to tax legislation.


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