Disclosure, Firm Growth, and the JOBS Act

Financing investment in future growth is an important motivation for firms to go public. Newly public firms fund investments mainly through public equity, and facilitate growth by building new capacity through capital expenditure(capex) and innovation, as well as by acquiring the assets of other firms. There is a longstanding policy debate on whether lowering the disclosure burden on public firms through regulation can facilitate such […]

SPAC of Everything: Challenging Financial Regulation in Times of Crisis

By the end of 2020, more than 240 special-purpose acquisition companies (SPACs) listed in the U.S. (on NASDAQ or the NYSE), raising a record $83 billion, according to SPAC Research. SPACs have already surged past last year’s record in the first quarter of 2021, raising $98.1 billion. These numbers are eye-catching. In 2007, the average […]

Hedge Fund Trading and Funding During the March 2020 US Treasury Market Dislocation

The role of hedge funds in U.S. Treasury (UST) markets is thought to have increased in importance since the global financial crisis (GFC) as bank-affiliated broker-dealers ceded some of their traditional activities in UST market arbitrage and liquidity provision to non-bank financial institutions. While UST securities play a vital role in the global financial system, […]

Personnel is Policy: Financial Agency Leadership under the Biden-Harris Administration Six Months After the Inauguration

In a prior post I discussed potential changes to the leadership of Federal financial regulatory and supervisory agencies as a result of the 2020 Presidential election. This post reviews progress on that front through the first six months of the Biden-Harris Administration.  An updated scorecard is attached to this post for ease of reference.   In general, the Administration […]

M&A Role in the VC Ecosystem: A View on Possible Antitrust Implications

Several proposals in the House and Senate are aimed at substantially curbing M&A (Mergers and Acquisitions) activity as part of changes focused on antitrust. In a recent study, titled “Mergers, Antitrust, and the Interplay of Entrepreneurial Activity and the Investments That Fund it”, we shed light on the possible implications to startup-driven innovation, in general, […]

A TALE OF TWO AGENCIES: THE TRAVAILS OF THE CFPB AND FHFA — CHAPTER 4: THE SUPREME COURT DECISION IN COLLINS v YELLEN (nee MNUCHIN)

 In three prior posts (here and here and here) I analyzed two Supreme Court cases that challenged the constitutional legitimacy of the Consumer Financial Protection Bureau (CFPB) and Federal Housing Finance Agency (FHFA). In Seila Law v CFPB[1] the Court held that the agency’s Director is an executive officer of United States and is, accordingly, removable at will by the President. In Collins v Yellen and […]

Mutual Fund Liquidity Management, Stock Liquidity, and Corporate Disclosure

“Lessons from COVID-19: Liquidity Risk Management is Central to Open-Ended Funds.” —BlackRock (2020) “Liquidity risk management programs (LRMPs) will be a focus area for the Division.” —SEC (2021) Mutual fund liquidity management has become increasingly important since the financial crisis of 2007–2009, during which regulators and practitioners raised concerns about whether mutual fund portfolios had […]

Cruel and Unusual Circumstances: The Fed’s Use and Misuse of Penalty Rates

After a political and legislative showdown at the end of 2020, Congress closed the Fed’s most novel Section 13(3) emergency lending facilities—the ones aimed most directly at Main Street. These facilities—supported by Treasury funds allocated by the Coronavirus Aid, Relief, and Economic Security (CARES) Act—lent only a fraction of their stated maximum lending limits, leaving many criticizing the programs’ overly punitive […]

How Policymakers Can Defuse a Major ESG Threat to Shareholder Rights

Since 2004, when the term “ESG” was first used in a report published by the United Nations Global Compact, there has been an explosion of interest in the concept, including in corporate boardrooms. The Global Compact, in a follow-up report the next year, described the emergence of ESG corporate policies as a “powerful and historic convergence … between the objectives […]

The Government Agenda and the Effects of Regulatory Dispersion

            The federal government is arguably the most influential actor in the United States economy. Its agenda includes a wide range of activities, such as, rule drafting, enforcement actions, and tariff determinations. These activities are carried out daily by hundreds of agencies. In our new paper, we develop a measure of the entire agenda of the federal […]