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INTRODUCTION The Great Depression is generally recognized as the greatest economic calamity in United States history.1 One of the Great Depression's many causes was reckless financial speculation driven in part by financial fraud.2 In response to the crisis, Congress passed the 1934 Securities Exchange Act (\"the Exchange Act\"), which courts have long held creates a private right of action for plaintiffs who experience an economic loss due to reliance on a material misstatement surrounding the purchase or sale of a security.3 A prima facie claim for securities fraud under the Exchange Act requires a showing of scienter, defined as \"a mental state embracing intent to deceive, manipulate, or defraud. \"4 Securities fraud claims under the Exchange Act provide an important remedy for investors who suffer losses due to fraudulent misstatements related to securities, and they serve a central regulatory function of ensuring accurate disclosure of information in financial markets.5 However, they have also provided fertile ground for frivolous lawsuits that lack merit and are intended solely to coerce defendants into settling to avoid costly discovery.6 In response to a proliferation of frivolous claims,7 Congress enacted the Private Securities Litigation Reform Act (\"PSLRA\") in 1995.8 Among other changes, the PSLRA elevated the pleading standards for the scienter element of securities fraud claims, requiring plaintiffs to plead facts giving rise to a \"strong inference\" of scienter to survive a motion to dismiss.9 The need to plead specific facts around this state-of-mind requirement presents an interpretive puzzle when dealing with corporate defendants because corporations lack their own discrete minds and \"think\" only through their employees, officers, and agents. In the 1990s, Congress became increasingly concerned with a proliferation of frivolous securities fraud claims designed to harass defendants into settling simply to avoid costly and protracted litigation.27 - Lawmakers heard testimony suggesting that, between compiling documents and preparing and deposing key witnesses, many of whom may be high-level executives with important responsibilities, \"discovery costs account for roughly 80% of total litigation costs in securities fraud cases.28 Plaintiffs' attorneys would initiate so-called \"strike suits\" and then use familiar and well-worn \"fishing expedition\" discovery tactics to win coercive settlements even where no fraud had truly occurred.29 In 1995, in an effort to limit this trend, Congress enacted the PSLRA over a presidential veto, elevating the pleading standards for plaintiffs bringing securities fraud claims.30 The PSLRA requires plaintiffs in securities fraud actions to \"state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind. \"32 In creating this heightened degree of factual particularity, Congress cited three central aims: \"(1) to encourage the voluntary disclosure of information by corporate issuers; (2) to empower investors so that they-not their lawyers-exercise primary control over private securities litigation; and (3)to encourage plaintiffs' lawyers to pursue valid claims and defendants to fight abusive claims.

I examine the ability of the U.S. investor protection regime to limit insider trading returns, absent Section 16(b) of the Securities Exchange Act of 1934 (the short-swing rule). I find that in this setting, U.S. insiders execute short-swing trades that i) beat the market by approximately 15 basis points per day and ii) systematically divest ahead of disappointing earnings announcements. These results indicate that the bright-line rule restricting short-horizon round-trip insider trading plays a substantial role in protecting outside investors from privately informed insiders in the United States.

Should Coca-Cola do more to protect abortion rights? Should Mastercard track gun purchases? Should Disney's workplace DEI trainings be more sensitive to conservative perspectives? Under Exchange Act Rule 14a-8 (the \"Rule\"), an activist holding only a nominal stake in a public corporation is able to force a shareholder vote on such proposals, focusing attention on whatever hot-button issue they wish to spotlight.

Capital markets dealmaking, like many kinds of business transactions, is built on a foundation of copied and recycled language--what many call boilerplate. Regulators and the bar periodically call for less reliance on boilerplate, but despite these pressures, boilerplate remains a fixture of ever-growing securities disclosures. This Article explores why boilerplate persists and how it affects investors, showing that boilerplate may have a more complex role than commonly recognized. This Article does so by developing a theory on the effect of boilerplate in securities disclosure--a context that is little studied despite a wealth of literature on boilerplate in other settings--and analyzes disclosure empirically using language processing techniques on a dataset of initial public offering disclosure spanning twenty years, from 1996 to 2015. The data shows that in the aggregate, the use of boilerplate is associated with some efficiency gains. For example, 10% more boilerplate in IPO disclosure is associated with a savings of $65,000 in legal fees, on average, controlling for other relevant factors. But the measurable gains are generally outweighed by boilerplate's information-related costs: greater use of boilerplate is associated with several indicia of information asymmetry that see issuing firms give up as much as $5 to $6 million in the market on average for each additional 10% of their disclosure that consists of rote recitations. Greater use of generic boilerplate language is also related to greater incidence of securities litigation and is associated with lower readability of already complex registration statements. The evidence points to the conclusion that, whether through its content or its signaling effect, boilerplate disclosure in the aggregate represents greater costs for IPO issuers and does little to advance the goal of better informing the investing public.

United States law, which requires financial institutions to retain customer data, conflicts with European Union law, which requires financial institutions to delete customer data on demand. A financial institution operating transnationally cannot comply with both U.S. and EU law. Financial institutions thus face the issue that they cannot possibly delete and retain the same data simultaneously. This Note will clarify the scope and nature of this conflict. First, it will clarify the conflict by examining (1) the relevant laws, which are Europe's General Data Protection Regulation (GDPR), the U.S. Bank Secrecy Act, and Securities and Exchange Commission (SEC) regulations, (2) GDPR's application to U.S. financial institutions, and (3) U.S. law's extraterritorial application to financial institutions operating in Europe, under the U.S. Supreme Court's Morrison-Kiobel two-step analysis. Second, it will propose a solution by examining international law and U.S. foreign relations law. United States law subjects financial institutions to multiple data-retention requirements. Securities regulations require broker-dealers to retain customer account and complaint records. The Bank Secrecy Act of 1970 requires financial institutions to retain customer data for at least five years. Sometimes, banks must permanently retain certain records. GDPR empowers individuals to demand that companies erase their data. Couched in the theory of a right to erasure, GDPR lets customers withdraw their consent for a financial institution to process or retain their data. Violators may face fines of 4 percent of their worldwide revenue. GDPR applies broadly to U.S. data-processors that either (1) are established in the European Union, or (2) monitor or offer to sell goods or services to individuals in the European Union. Establishment is broadly construed by European courts and may be met by \"a single representative in the European Union.\" In U.S. law, a two-step analysis determines whether and to what extent federal statutes govern conduct abroad. First, courts analyze whether the presumption against extraterritoriality has been rebutted. The presumption derives from the canon that a statute, \"unless a contrary intent appears, is meant to apply only within the territorial jurisdiction\" of the United States. If the presumption is not rebutted, the court proceeds to the second step, when the court considers the statute's \"focus\" and whether the case involves the statute's domestic application. United States law has domestic application to data stored domestically, and sometimes possibly to data stored internationally; such data operations may also fall under GPDR's jurisdiction. Then, if a customer asks a financial institution to delete data, the financial institution will face conflicting laws. This Note seeks to resolve the conflict, recommending that courts approach resolution from the framework of the Restatement (Third) of Foreign Relations Law.

.220 I. INTRODUCTION The Ninth Circuit Court of Appeals recently diverged from the decisions of five other federal circuit courts in Varjabedian v. Emulex Corp., when the court applied a negligence standard in assessing a claim for material misstatements or omissions in a tender offer under Section 14(e) of the Securities Exchange Act of 1934 (1934 SEA).1 This Note will begin by addressing the purpose of Section 14(e) and by providing a brief overview of the federal circuits' statutory interpretations of the Securities and Exchange Commission (SEC) Rule 10b-5. [...]Part IV will focus on why the application of a dual-standard of liability is more favorable than a scienter standard. \"13 Further, the Supreme Court decided the scienter mental state is required for Rule 10b-5 claims because the Rule incorporates language prohibiting manipulative and deceptive activity.14 The Court reasoned that the extent to which the SEC can regulate \"manipulative or deceptive device[s]\" under the rule-making power of Section 10(b) limits Rule 10b-5 to fraudulent acts entailing an intent to defraud.15 Since 1973, five federal circuits have held that a Section 14(e) antifraud violation in connection with a tender offer requires proof of scienter, as opposed to mere proof of negligence.16 In addressing the 14(e) claims, each circuit focused on the similar language in Rule 10b-5 and the Rule's accepted scienter standard.17 In 1973, the Second Circuit applied a scienter standard of liability to a Section 14(e) claim in Chris-Craft Indus. \"19 The Second Circuit also noted a negligence standard was not appropriate in claims arising under Sections 17(a) or 10(b) of the 1934 SEA.20 In making its decision to require scienter, the court focused on Congress' intent in enacting Section 14(e), which was to promote and ensure informed shareholder voting in the case of tender offers.21 In that case, in response to Chris-Craft issuing a tender offer to purchase Piper stock, Piper sent a letter to its shareholders discouraging the offer because it was not in the company's best interest.22 Piper then agreed to an exchange offer with Bangor Punta Corp. before issuing a press release outlining the exchange offer.23 Accordingly, Chris-Craft brought a private right of action against Piper and Bangor Punta Corp. under Section 14(e) and Rule 10b-5, claiming the letter to Piper stockholders and the press release contained material misstatements.24 The court held that both Piper and Bangor Punta Corp. violated Section 14(e) because the shareholders were entitled to accurate information adequate to make an informed decision regarding the Piper family's personal recommendations.25 In the following year, the Fifth Circuit also applied a scienter standard to a Section 14(e) claim in Smallwood v. Pearl Brewing Co26 In that case, the court stated a degree of culpability that exceeds mere negligence is required in cases alleging violations of Rule 10b-5.

On April 20, 2018, in Varjabedian v Emulex Corp., the United States Court of Appeals for the Ninth Circuit held that Section 14(e) of the Securities Exchange Act of 1934 requires only a showing of negligence, not scienter, to establish a violation. The Ninth Circuit derived that requirement from the fact that Section 14(e) resembles Section 17(a)(2) of the Securities Act of 1933. In reaching this conclusion, the Ninth Circuit split with all the other courts to consider this question. The Second, Third, Fifth, Sixth, and Eleventh Circuits had previously held that Section 14(e) shares more similarities with Rule 10b-5, itself promulgated under Section 10(b) of the Exchange Act. Under that line of reasoning, because Rule 10b-5 actions have a scienter requirement, so too do Section 14(e) actions. This Comment argues that the majority view, that Section 14(e) more closely resembles Rule 10b-5 and thus requires a showing of scienter, not mere negligence, is correct.

We find that firms with insider sales executed under Rule 10b5-1 plans exhibit a higher likelihood of meeting or beating analysts' earnings expectations (MBE). This relation between MBE and plan sales is more pronounced for the plan sales of chief executive officers (CEOs) and chief financial officers (CFOs) and is nonexistent for other key insiders. The market reactions to firms that successfully meet or beat expectations are relatively positive compared with their peers that fail to do so. One interpretation of our results is that CEOs and CFOs who sell under these plans may be more likely to engage in strategic behavior to meet or beat expectations in an effort to maximize their proceeds from plan sales. However, readers should exercise caution in making inferences, because the potential presence of limit order transactions makes it difficult to unambiguously determine the direction of causality of the relation we document. This paper was accepted by Mary Barth, accounting.

The Supreme Court has played a particularly prominent role in defining the crime of insider trading. Last term, in Salman v. US, the Supreme Court reaffirmed its longstanding \"personal benefit\" test for \"tippee\" liability -- tippees being traders acting on disclosures of material nonpublic information made by insiders. Though the decision was unsurprising given its alignment with clear precedent, the narrow resolution of the case represents a missed opportunity to clarify a murky doctrine. Bassam Salman's case began with his brother-in-law, Maher Kara, who worked at Citigroup as an investment banker focused on the healthcare industry. As a result of his position at the bank, Maher had access to confidential information regarding mergers and acquisitions in the industry and disclosed much of this information to his brother Michael, who was a friend of Salman.

On March 29, 2016, in Indiana Public Retirement Systems v. SAIC, Inc., the United States Court of Appeals for the Second Circuit reaffirmed its earlier conclusion that a violation of the duty to disclose imposed on publicly traded companies by Item 303 of Regulation S-K can constitute a violation of Section 10(b) of the Securities Exchange Act of 1934. In so doing, the Second Circuit directly conflicted with a decision from the United States Court of Appeals for the Ninth Circuit, Cohen v. NVIDIA Corp. (In re NVIDIA Corp. Securities Litigation), despite the fact that both courts relied upon the Third Circuit's Oran v. Stafford opinion in reaching their decisions. This Comment argues that a violation of Item 303 can constitute a violation of Section 10(b), and, further, that the Second Circuit adopted the correct approach because it faithfully construed the underlying regulation and statute, correctly followed earlier jurisprudence, and furthered, not frustrated, the principal goals of the federal securities laws.