​Papers and Reports

Regulatory Entrepreneurship

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Co-Authors: Elizabeth Pollman and Jordan Barry. Named one of the top ten corporate and securities law articles of 2017.

This Article examines what we term “regulatory entrepreneurship” — pursuing a line of business in which changing the law is a significant part of the business plan. Regulatory entrepreneurship is not new, but it has become increasingly salient in recent years as companies from Airbnb to Tesla, and from DraftKings to Uber, have become agents of legal change. We document the tactics that companies have employed, including operating in legal gray areas, growing “too big to ban,” and mobilizing users for political support. Further, we theorize the business and law-related factors that foster regulatory entrepreneurship. Well-funded, scalable, and highly connected startup businesses with mass appeal have advantages, especially when they target state and local laws and litigate them in the political sphere instead of in court.

Finally, we predict that regulatory entrepreneurship will increase, driven by significant state and local policy issues, strong institutional support for startup companies, and continued technological progress that facilitates political mobilization. We explore how this could catalyze new coalitions, lower the cost of political participation, and improve policymaking. However, it could also lead to negative consequences when companies’ interests diverge from the public interest.

How Reputations are Won and Lost in Modern Information Markets

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Contributors include Twitter co-founder Biz Stone; senior executives from global companies eni, Experian and Millennium Management; prominent journalists from Reuters, the New York Times and CNBC; and professors from the Universities of San Diego, Stanford, Oxford and MIT.

Democratization of online information, always-on media and the proliferation of audiences creates distorting effects that are not well understood. This white paper seeks to identify the key challenges and opportunities for businesses and policy-makers in dealing with online information networks. Based on a conference co-hosted in San Diego by the Center for Corporate and Securities Law at the University of San Diego School of Law and the Oxford University Centre for Corporate Reputation at Saїd Business School.

Comments by Forty-Two Law Professors:
SEC Study on Extraterritorial Private Rights of Action

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Prepared by Frank Partnoy, and 41 other law professors.

In the aftermath of the financial crisis, one crucial question has been whether investors can recover for securities fraud if they are induced to trade by fraudulent activity in the U.S. but their trades do not take place on a U.S. exchange. Simply put, can investors who are defrauded in the U.S. recover if they trade securities outside the U.S.? In 2010, the Supreme Court said no, and Congress directed the Securities and Exchange Commission to study whether the Supreme Court was wrong. On February 18, 2011, Professor Frank Partnoy submitted an 18-page response to the SEC on behalf of himself and 41 other law professors.

Call for Evidence – Auditors:
Market Concentration and Their Role

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Prepared by Mary Hartman Morris, Investment Officer, Global Equity, CalPERS, and by Cynthia L. Richson, Co-director of the Center for Corporate and Securities Law at USD School of Law

A comment for the Clerk to the Economic Affairs Committee of the United Kingdom House of Lords on a call for evidence on the concentration of auditors and the critical role they play in maintaining the integrity of financial reporting.

Rethinking Regulation of Credit Rating Agencies:
An Institutional Investor Perspective

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Prepared by Frank Partnoy, George E. Barrett Professor of Law and Finance, Director of the Center on Corporate and Securities Law, University of San Diego School of Law

White paper commissioned by the Council of Institutional Investors for the purpose of educating its members, policymakers, and the general public about important credit rating agency regulation proposals and their potential impact on investors.

Bring Transparency to Off-Balance Sheet Accounting

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Prepared by Frank Partnoy and Lynn E. Turner

Abusive off-balance sheet accounting was a major cause of the financial crisis. These abuses triggered a daisy chain of dysfunctional decision-making by removing transparency from investors, markets, and regulators. Off-balance sheet accounting facilitated the spread of the bad loans, securitizations, and derivative transactions that brought the financial system to the brink of collapse.