How do Consumers Respond to Corporate Bankruptcy?

Firms rely extensively on debt financing. While debt has many benefits, value can be destroyed when lenders worry they will not be repaid. For example, a firm at risk of liquidating may lose customers who derive utility from future interactions with a stable business. Likewise, a firm may be perceived by consumers as having low […]

A Critical Analysis of the SEC’s Reaction to Crypto Lending 

For the past several years, investors around the world who are interested in owning and holding certain cryptoassets for the long term have had the opportunity to deposit their assets with various companies and protocols and earn interest. One such company is CoinLoan, based in Europe and regulated under applicable EU financial law. It offers […]

The End of the War or the Commencement of Battle?  

Cryptocurrency Regulation in China  In September 2021, China’s central bank, its highest court and procuracy, as well as seven other national government departments and agencies jointly enacted a legally binding Notice on Further Preventing and Disposing of the Risks of Speculative Trading in Virtual Currencies (“Notice”), marking the culmination of China’s yearslong war against cryptocurrencies. […]

Capital Markets and Corporate Governance Standards

Corporate governance has over time moved from being a peripheral to a central issue for capital markets regulation. Our recent research focuses on how that transformation has occurred in the UK and how it has adjusted the default provisions of UK corporate law.   We begin with the observation that corporate governance was not a significant […]

“Clickbait” Compliance and ISO Standard-Setting 

A curious development has emerged in the world of corporate compliance. In recent years, the International Organization for Standardization (ISO), the world’s leading private standard-setter, has been developing a flurry of new compliance-related international standards. These standards range from specific risk areas, such as anti-bribery (ISO 37001) and whistleblowing (ISO 37002), to broader concerns, such […]

Third-Party Litigation Finance and Public Capital Markets: The Case of the Muddy Waters Short Attack on Burford Capital

Imagine a company that invests in a portfolio of long-term financial assets. This company’s asset portfolio is, relative to the asset management industry, highly concentrated—a circumstance which naturally heightens the appetite of the company’s own investors to know more details of the assets in the portfolio. The company operates in an adolescent industry, and neither […]

Non-Intermediate Clearing of Crypto Derivatives on Margin is a Bad Idea

The following is an edited comment letter that was submitted to the Commodity Futures Trading Commission (CFTC, or Commission) on May 11th in regards to the Commission’s request for comment on FTX’s request to amend their derivatives clearing organization order to permit it to clear non-intermediated, margined products. All submitted comments can be viewed here. We are law professors […]

Policy Uncertainty, Earnings Management, and the Role of Political Connections 

Political decisions shape the operating environment for the economy as well as the individual firm. Political and regulatory reactions to the Global Financial Crisis, government shutdowns, or major tax reforms number prominently among them. As reactions from political actors are rarely clear-cut ex ante, grave crises give rise to political uncertainty.  Political uncertainty affects economic […]

Secondary markets and the power of the enforcement of insider trading laws

To facilitate small and high growth firms in need of finance, the London Stock Exchange (LSE) introduced a secondary market, the Alternative Investment Market (AIM), in 1995. The AIM is a lightly regulated market, with minimum eligibility criteria and ongoing obligations, which was initially considered to be a stepping-stone to the traditionally regulated Main Market […]

The Media Goes Where They’re Needed: The Relation between Firms’ Investor Base and Media Coverage

The financial media provides information to investors by monitoring firms for malfeasance, such as fraud and excessive CEO pay (Miller, 2006; Core, Guay, and Larcker, 2008). The media also helps investors monitor more mundane corporate activities, such as periodic earnings announcements. However, it is unclear why certain firms get extensive media coverage, along with the resulting benefits, […]