Corporate Law and Financial Regulation

This course analyzes the structure of complex transactions and contracts—deals—from both a positive and normative perspective. We investigate the contracting patterns that have emerged with respect to different types of transactions (e.g., mergers and acquisitions, joint ventures, and financings) and consider whether more effective contracting arrangements could be achieved.

This course analyzes key issues under the U.S. federal securities laws, principally the Securities Act of 1933 and the Securities Exchange Act of 1934, with respect to the domestic and international offer and sale of securities. It includes a study of what constitutes a security, the public offering process, mandatory disclosure requirements for public companies, exemptions from registration (including exempt global offerings), and potential liabilities and sanctions.

An introduction to the regulatory structures, as well as some of the economic, technological and other factors, that pattern the conduct of financial intermediation in the U.S. The principal focus will be upon commercial banks, investment companies (mainly mutual funds), insurance companies, pension funds and securities firms in so far as these institutions discharge a common set of economic functions and give rise to a common cluster of counterparty and third party (“systemic”) risks. Legal topics to be covered accordingly include entry-, functional and geographical restrictions; consumer-protection (including disclosure requirements) and competition-promotion; capital adequacy-, solvency- and related forms of risk-regulation (including deposit insurance); community-reinvestment; and “self-regulation.” We shall also devote some attention to “alternative” financial service providers such as check-cashing services, community development financial institutions and micro-credit providers; and we shall take occasional note both of divergent (generally, non-American) jurisdictions’ dominant modes of financial intermediation and of the “globalization” of finance, in order both to place what is distinctive about the dominant American forms into bolder relief and better to understand the forces operating behind recent and still unfolding changes to the American (and global) financial and finance-regulatory environments. No prior background in financial law or economics is required, but it is helpful.

The conventional law school curriculum implicitly emphasizes appellate litigation, teaching students to read, argue and distinguish cases, and to predict what a judge will do. A transactional practice demands additional skills. A full understanding requires years of experience—not something that can be bottled into a one-credit course. Transactional Lawyering provides students with an initial intro­duc­tion to how a deal is structured and what a deal lawyer does—familiarizing them with some common problems and the tools used to address them. In exploring these problems, the course draws on moral hazard, adverse selection, and other economic theories and applies them to real deal issues.

The course will culminate in the Transactional Lawyering Competition, to be held in October or November (before Thanksgiving Break). Students will be paired off into two-person teams, representing opposing sides in a transaction. Using tools from the course, each team will mark-up a simple transaction document to reflect their client’s interests, to be submitted before the competition. Those mark-ups will then be used as the basis for team-to-team negotiations at the competition. The mark-ups and the negotiations will be reviewed, scored, and judged by adjunct instructors who are themselves experienced transactional attorneys, assessing—and providing feedback on—how students perform.