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Introduction to Hidden Fallacies in Corporate Law and Financial Regulation: Reframing the Mainstream Narratives
No full textArtificial Intelligence & Machine Learning in Law Libraries
No full textProfs. Sarah Ryan (UNT) and Cas Laskowski (Arizona) will present on their forthcoming chapter Artificial Intelligence & Machine Learning in Law Libraries. The chapter provides foundational knowledge about these systems and practical information about where these systems might be leveraged to provide new services or enhance existing ones
FTX’d: Conflicting Public and Private Interests in Chapter 11
Full text linkChapter 11 of the Bankruptcy Code is often justified by vague assertions that reorganizing troubled companies is in the “public interest.” There has, however, been surprisingly little effort to consider seriously what this public interest is, how it should be operationalized, or who should pay for it. Based on a case study of the controversial bankruptcy of crypto complex FTX, this Article develops a three-part typology of public interests at stake in chapter 11 and shows how they can conflict with one another and with private interests: (1) the paramount public interest in the integrity of the judicial process; (2) bankruptcy-specific public interests in maximizing value through efficient, consolidated proceedings; and (3) “other” public interests, such as the prosecution and defense of serious crimes. We place FTX’s counsel, Sullivan & Cromwell (S&C), at the center of this triptych. We present evidence indicating that S&C had undisclosed potential conflicts of interest due to apparent errors, omissions, and deceptions in their work for the company and its founder, Sam Bankman-Fried, before, at, and during the bankruptcy, thereby undermining the first-order public interest in procedural integrity. S&C’s role as debtor’s counsel has cast a troubling shadow over puzzling and costly decisions in the case, thereby undermining a second, bankruptcy-specific form of the public interest: maximizing an estate’s value. S&C often justified its actions by reference to the third, “other” facet of the public interest. Namely, S&C touted that it supported the prosecution of disfavored insiders such as Bankman-Fried. But that pricey task—for which S&C billed millions of dollars—may have distorted the prosecutions without producing observable economic benefit to the bankruptcy estate. FTX is a cautionary tale about the power that lawyers have to frame, control, and profit from claims about the public interest in chapter 11. An examiner appointed late in the case largely exonerated S&C, although he engaged little of the evidence we present. This is not surprising because S&C’s resistance to that intervention left a narrow scope and little time for his investigation. We situate our findings in a nascent body of literature exploring the public interest in bankruptcy. We suggest that the experience with S&C in FTX may reflect larger patterns in reorganization reminiscent of historical concerns about distorted incentives in restructuring processes. To ameliorate these concerns, we offer guidance to improve the functioning of the principal custodians of the public interest in chapter 11. Courts should more carefully police prebankruptcy connections of estate professionals and should use preliminary examinations more frequently. We further believe that the United States Trustee should have greater independence from other government actors so it can fulfill its watchdog mandate without compromise
Election Administration Harms and Ballot Design: A Study of Florida\u27s 2018 United States Senate Race
No full textWe introduce a typology of election administration harms and apply it to empirically study the consequences of ballot design. Our typology distinguishes between individual, electoral, and systemic harms. Together, it clarifies why ballot design can be a particular vulnerability in election administration. Using both ballot-level and precinct-level data, we revisit Florida\u27s 2018 United States Senate race, in which Broward County\u27s ballot design flouted federal guidelines and, according to critics, was pivotal to the outcome. We estimate that Broward\u27s ballot design induced roughly 25,000 voters to undervote in a race determined by about 10,000 votes and that these excess undervotes were concentrated among low-information voters. Broward\u27s ballot did not, however, affect the outcome of the election. Nonetheless, flawed ballot designs are still concerning in an age of voter distrust. Given the risk that flawed ballots can cause systemic harm, we offer a roadmap for procedural reforms to improve ballot design
The Ideal Shareholder: Competing Norms on the Appropriate Characteristics of Public Company Shareholders
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History and Fetishism in the New Separation of Powers Formalism
No full textIn the last few years, the Supreme Court has embraced a formalist approach to separation of powers law, allegedly justified by the Constitution’s “original meaning.” It is revolutionary, rapidly remaking the constitutional law of administration. But the Court’s engagement with history is selective and idiosyncratic. In particular, it has largely ignored what we know of governmental practice in the early republic.
This Essay attacks the Court’s use of history. It uses Jack Balkin’s analysis of legal discourse in Memory and Authority to unpack the Court’s reliance on historical arguments and to suggest avenues for critique. It draws on recent scholarship on Founding Era practice to show that eighteenth-century understandings of separation of powers were not formalist. And it argues for the restoration of Montesquieu to our constitutional memory. A key figure in the development of the Constitution, Montesquieu’s understanding of separation of powers closely tracked early republic practice. He thus points the way towards an alternative interpretation of our constitutional tradition and a more pragmatic and historically accurate structural constitutionalism in place of the Court’s growing formalist fetish
Overseeing Private Rulemaking: Evidence from SEC Review of SRO Rules
No full textSecurities markets rely heavily on private rulemaking by self-regulatory organizations (SROs) such as FINRA and the stock exchanges, supervised by the Securities and Exchange Commission. The SRO-centric model is marred by problems with democratic accountability and inherent conflicts of interest, where insiders might prioritize private benefits over public needs. For these and related reasons, the SRO model is in a moment of transition— with increasing judicial scrutiny of SROs’ roles and powers within separation-of-powers and administrative-law frameworks. Scholars, meanwhile, know little about how the SROs and SEC jointly produce rules for capital markets. Previous securities regulation scholarship has focused on specific aspects of SRO rulemaking, such as the stock exchanges’ corporate governance rules, largely without addressing systemic issues in the production and SEC oversight of SRO rules. Yet SRO rulemaking practices have important consequences for the regulation of securities markets, including the role of procedural reform on regulatory effectiveness and public participation.
This article’s approach uses a comprehensive new dataset drawn from every issue of the Federal Register from 2000 to 2023, providing a unique macro perspective that reveals significant inefficiencies and oversight challenges in the current system. By employing a political economy lens, this study focuses on procedural inadequacies while aligning them with policy concerns about accountability, oversight, and democratic control over regulation. This article argues that the SRO rulemaking system is not functioning well, producing a firehose of securities law that is at once a massive drain on agency resources, as well as an impediment to robust public participation in the rules governing capital markets. After the Dodd-Frank Act, most rule change proposals go effective immediately upon filing unless the SEC takes action to halt effectiveness and need not require preapproval. The dominance of this mode of SRO rulemaking, I suggest, alters both the incentives as well as opportunities the SEC has to engage in robust oversight. I also find evidence that the SEC’s oversight responds to a judicial-review shock. I assess the Dodd-Frank reforms under a framework that recognizes the tradeoff between the costs of deciding and the costs of making wrong decisions, and connect this tradeoff to deeper debates about the role of SROs in our constitutional structure. This project contributes to our understanding of the political economy of capital markets regulation, as well as our understanding of federal oversight of SRO rulemaking
Mass Data Search Warrants and the Constitution
No full textIn our data-saturated times, the key evidence in a criminal case often is digital. As investigators deploy new tools such as keyword and geofence warrants to follow technological trails, courts and commentators are split over the constitutionality of such tactics. A keyword warrant asks search engine companies to reveal users who searched incriminating keywords before a crime. A geofence warrant asks technology companies to search vast troves of user location data for persons present around the time and place of a crime. Penned in an era before electrical power, much less vast privately held digital databanks, the Constitution’s text is hard-stretched to apply to modern mass data searches. Courts vary dramatically. Some courts hold that the Fourth Amendment does not apply at all to data that we reveal to a third party, such as Google. Other courts hold that geofence and keyword warrants are modern-day general warrants prohibited by the Fourth Amendment. Some courts avoid the thorny constitutional question by ruling that in any event, good-faith reliance on a warrant signed by a magistrate judge precludes exclusion of evidence. This article forges a middle path between the extremes to evaluate the sufficiency of modern-day mass data search warrants.
The article frames the concepts of digital probable cause and particularization, updating the Fourth Amendment for data searches. Digital probable cause is based on a fair probability that evidence of a discrete known crime will be found using data search parameters. Digital particularization refers to particularization via parameters such as the time, place, and circumstances of a crime, including likely keywords a perpetrator would use to plan it. Modern data searches must be specifically tailored to uncover evidence of a discrete known crime with time, place, and geographical or likely keyword parameters to limit roving searches. In contrast, roving digital hunts for a crime, such as searching for people who googled keywords like “abortion” in a state that criminalizes abortions, would fail to satisfy probable cause and particularization requirements. Any such modern-day general warrant authorizing digital rummaging untethered to the specific details of a known offense would patently violate the Fourth Amendment
