Insider Trading: A Clash Between Law and Economics

2020 ◽  
Author(s):  
Stephen F. Diamond
Keyword(s):  
Economic Analysis ◽  
Insider Trading ◽  
First Principles ◽  
Law And Economics ◽  
Securities And Exchange Commission ◽  
The Core ◽  
Core Principle ◽  
Consistent Basis ◽  
Successive Generations ◽  
Over Time

Insider trading is not widely understood. Insiders of corporations can, in fact, buy and sell shares of those corporations. But, over time, Congress, the courts and the Securities and Exchange Commission (SEC) have imposed significant limits on such trading. The limits are not always clearly marked and the principles underlying them not always consistent. The core principle is that it is illegal to trade if one is in the possession of material, nonpublic information. But the rationality of this principle has been challenged by successive generations of law and economics scholars, most notably Manne, Easterbrook, Epstein, and Bainbridge. Their “economic” analysis of this contested area of the law provides, arguably, at least a more consistent basis upon which to decide when trades by insiders should, in fact, be disallowed. A return to genuine “first principles” generated by the nature of capitalism, however, allows for more powerful insights into the phenomenon and could lead to more effective regulation.

Behavioral Law and Economics

2018 ◽  
Author(s):  
Eyal Zamir ◽  
Doron Teichman
Keyword(s):  
Economic Analysis ◽  
Bounded Rationality ◽  
Law And Economics ◽  
Empirical Studies ◽  
Securities Regulation ◽  
Critical Examination ◽  
Entire Body ◽  
Economic Analysis Of Law ◽  
Behavioral Law And Economics ◽  
The Impact

In the past few decades, economic analysis of law has been challenged by a growing body of experimental and empirical studies that attest to prevalent and systematic deviations from the assumptions of economic rationality. While the findings on bounded rationality and heuristics and biases were initially perceived as antithetical to standard economic and legal-economic analysis, over time they have been largely integrated into mainstream economic analysis, including economic analysis of law. Moreover, the impact of behavioral insights has long since transcended purely economic analysis of law: in recent years, the behavioral movement has become one of the most influential developments in legal scholarship in general. Behavioral Law and Economics offers a state-of-the-art overview of the field. The book surveys the entire body of psychological research underpinning behavioral analysis of law, and critically evaluates the core methodological questions of this area of research. The book then discusses the fundamental normative questions stemming from the psychological findings on bounded rationality, and explores their implications for establishing the aims of legislation, and the means of attaining them. This is followed by a systematic and critical examination of the contributions of behavioral studies to all major fields of law—property, contracts, consumer protection, torts, corporate, securities regulation, antitrust, administrative, constitutional, international, criminal, and evidence law—as well as to the behavior of key players in the legal arena: litigants and judicial decision-makers.

Unresolved Business: Federal Corporate Governance Enhancements

2018 ◽  
Author(s):  
Marc I. Steinberg
Keyword(s):  
Corporate Governance ◽  
Insider Trading ◽  
Securities And Exchange Commission ◽  
Federal Courts ◽  
Professional Conduct ◽  
State Law ◽  
Federal Law ◽  
Tender Offers ◽  
Federal Level ◽  
Federal Statute

This chapter analyzes and recommends federal corporate governance enhancements that should be implemented. These enhancements, which should be adopted in a measured and directed manner, are necessary to remediate certain deficiencies that currently exist. Consistent therewith, this chapter focuses on several important matters that merit attention, including the undue deference by federal courts to state law, the appropriate application of federal law to tactics undertaken in tender offers, the need for a federal statute encompassing insider trading, and the propriety of more vigorous oversight by the Securities and Exchange Commission (such as with respect to the “current” disclosure regime, the SEC’s Standards of Professional Conduct for Attorneys, and the Commission’s neglecting at times to invoke its statutory resources). Thus, the analysis set forth in this chapter identifies significant deficiencies that currently exist and recommends measures that should be implemented on the federal level to enhance corporate governance standards.

The SEC’s Impact on the Federalization of Corporate Governance—A Traditional Perspective

2018 ◽  
Author(s):  
Marc I. Steinberg
Keyword(s):  
Corporate Governance ◽  
Mergers And Acquisitions ◽  
Insider Trading ◽  
Securities And Exchange Commission ◽  
Outside Directors ◽  
Tender Offers ◽  
Going Private ◽  
Rule Making

This chapter examines, from a traditional perspective, several areas where the Securities and Exchange Commission (SEC) has impacted corporate governance in a meaningful way. By way of example, these subjects include insider trading, qualitative materiality, the role of gatekeepers (such as outside directors, attorneys, and accountants), the Commission’s use of disclosure to influence conduct, the implementation by subject companies of undertakings pursuant to SEC enforcement proceedings, and mergers and acquisitions (including tender offers and going-private transactions). This chapter’s focus is on the manner in which the SEC for well over 50 years has impacted corporate governance by means of exercising its rule-making and oversight authority.

Law and Economics

2020 ◽  
pp. 84-102
Author(s):  
Daniel B. Kelly
Keyword(s):  
Economic Analysis ◽  
First Generation ◽  
Law And Economics ◽  
Private Law ◽  
Foreseeable Future ◽  
Business Associations ◽  
The Third ◽  
Starting Point ◽  
The Law ◽  
The Impact

This chapter analyzes how law and economics influences private law and how (new) private law is influencing law and economics. It focuses on three generation or “waves” within law and economics and how they approach private law. In the first generation, many scholars took the law as a starting point and attempted to use economic insights to explain, justify, or reform legal doctrines, institutions, and structures. In the second generation, the “law” at times became secondary, with more focus on theory and less focus on doctrines, institutions, and structures. But this generation also relied increasingly on empirical analysis. In the third generation, which includes scholars in the New Private Law (NPL), there has been a resurgence of interest in the law and legal institutions. To be sure, NPL scholars analyze the law using various approaches, with some more and some less predisposed to economic analysis. However, economic analysis will continue to be a major force on private law, including the New Private Law, for the foreseeable future. The chapter considers three foundational private law areas: property, contracts, and torts. For each area, it discusses the major ideas that economic analysis has contributed to private law, and surveys contributions of the NPL. The chapter also looks at the impact of law and economics on advanced private law areas, such as business associations, trusts and estates, and intellectual property.

Equality and Equity in Chinese Higher Education in the Post-massification Era: An Analysis Based on Chinese Scholarly Literature

2021 ◽  
pp. 1-22
Author(s):  
Qiang Zha
Keyword(s):  
Higher Education ◽  
Literature Review ◽  
Bibliometric Analysis ◽  
Chinese Higher Education ◽  
Scholarly Literature ◽  
The Core ◽  
Research Questions ◽  
Changes Over Time ◽  
Core Issues ◽  
Over Time

Abstract This paper examines several research questions relating to equality and equity in Chinese higher education via an extended literature review, which in turn sheds light on evolving scholarly explorations into this theme. First, in the post-massification era, has the Chinese situation of equality and equity in higher education improved or deteriorated since the late 1990s? Second, what are the core issues with respect to equality and equity in Chinese higher education? Third, how have those core issues evolved or changed over time and what does the evolution indicate and entail? Methodologically, this paper uses a bibliometric analysis to detect the topical hotspots in scholarly literature and their changes over time. The study then investigates each of those topical terrains against their temporal contexts in order to gain insights into the core issues.

scholarly journals What is special about L3 processing?

2013 ◽  
Vol 18 (2) ◽  
pp. 130-144 ◽  
Author(s):  
KEES DE BOT ◽  
CAROL JAENSCH
Keyword(s):  
Second Language ◽  
Language Processing ◽  
Language Use ◽  
Fundamental Question ◽  
Third Language ◽  
The Core ◽  
Dynamic Perspective ◽  
Core Issue ◽  
The Brain ◽  
Over Time

While research on third language (L3) and multilingualism has recently shown remarkable growth, the fundamental question of what makes trilingualism special compared to bilingualism, and indeed monolingualism, continues to be evaded. In this contribution we consider whether there is such a thing as a true monolingual, and if there is a difference between dialects, styles, registers and languages. While linguistic and psycholinguistic studies suggest differences in the processing of a third, compared to the first or second language, neurolinguistic research has shown that generally the same areas of the brain are activated during language use in proficient multilinguals. It is concluded that while from traditional linguistic and psycholinguistic perspectives there are grounds to differentiate monolingual, bilingual and multilingual processing, a more dynamic perspective on language processing in which development over time is the core issue, leads to a questioning of the notion of languages as separate entities in the brain.

Parameters or cues?

2004 ◽  
Vol 7 (1) ◽  
pp. 35-36 ◽  
Author(s):  
BRIAN MACWHINNEY
Keyword(s):  
Second Language ◽  
Second Language Acquisition ◽  
Language Acquisition ◽  
Hebbian Learning ◽  
Universal Grammar ◽  
Back Propagation ◽  
Parameter Setting ◽  
Functional Categories ◽  
The Core ◽  
Over Time

Truscott and Sharwood Smith (henceforth T&SS) attempt to show how second language acquisition can occur without any learning. In their APT model, change depends only on the tuning of innate principles through the normal course of processing of L2. There are some features of their model that I find attractive. Specifically, their acceptance of the concepts of competition and activation strength brings them in line with standard processing accounts like the Competition Model (Bates and MacWhinney, 1982; MacWhinney, 1987, in press). At the same time, their reliance on parameters as the core constructs guiding learning leaves this model squarely within the framework of Chomsky's theory of Principles and Parameters (P&P). As such, it stipulates that the specific functional categories of Universal Grammar serve as the fundamental guide to both first and second language acquisition. Like other accounts in the P&P framework, this model attempts to view second language acquisition as involving no real learning beyond the deductive process of parameter-setting based on the detection of certain triggers. The specific innovation of the APT model is that changes in activation strength during processing function as the trigger to the setting of parameters. Unlike other P&P models, APT does not set parameters in an absolute fashion, allowing their activation weight to change by the processing of new input over time. The use of the concept of activation in APT is far more restricted than its use in connectionist models that allow for Hebbian learning, self-organizing features maps, or back-propagation.

Solar-flare exposure and thermoluminescence of Luna 24 core material

1980 ◽  
Vol 297 (1428) ◽  
pp. 41-50 ◽  
Keyword(s):  
Solar Flare ◽  
Core Material ◽  
Substantial Fraction ◽  
Natural Radiation ◽  
Mixing Properties ◽  
Local Component ◽  
The Core ◽  
Radiation History ◽  
Solar Flare Tracks ◽  
Over Time

Mineral grains from three depths within the Luna 24 drill core ( ca . 90, 125 and 196 cm) have been examined for solar-flare tracks. Large proportions (55-100%) of grains from all three levels are found to be track-rich (with central track densities p e > 10 8 cm -2 ), and a substantial fraction ( ca . 25-50%) of all grains display trackdensity gradients. These observations indicate that most of the mineral grains have been cycled through the top ca . 1 mm of the lunar surface at some time in their history. Some degree of submaturity is observed towards the bottom of the core. The most likely depositional model envisages rapid infall of highly irradiated material into a less mature local component with rather little subsequent reworking. Thermoluminescence (t.l.) studies indicate a lower natural radiation dose in samples from the 196 cm level compared with those from the two upper levels. This can result either from random variations in the local internal radioactivity or from mixing properties of the pre-irradiated material over time scales of less than ca . 100 ka. Radiation sensitization of samples suggests a possible use of t.l. sensitivity for the interpretation of lunar radiation history.

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