Copyright (c) 2009 All rights reserved. http://works.bepress.com/ribstein Recent documents in Larry E. Ribstein en-us Sun, 31 May 2009 10:45:26 PDT 3600 http://works.bepress.com/ribstein/21 http://works.bepress.com/ribstein/21 Tue, 15 May 2007 16:21:49 PDT Larry E. Ribstein Law and Economics http://works.bepress.com/ribstein/19 http://works.bepress.com/ribstein/19 Tue, 15 May 2007 16:21:48 PDT This article reports on the experience with the Sarbanes-Oxley Act of 2002 in the three years since its passage. In general, the costs have been significant and the benefits elusive. This suggests some lessons for future regulation. Larry E. Ribstein Corporate and Securities http://works.bepress.com/ribstein/20 http://works.bepress.com/ribstein/20 Tue, 15 May 2007 16:21:48 PDT The proliferation of partnership-based business organizations raises questions concerning the law's role in shaping firms. Although many scholars have focused on business organization statutes, at least in the U.S. this law may be trivial in the sense that it simply reflects underlying business concerns. That is because firms easily can choose the applicable governance law, and therefore can avoid bad or unsuitable laws. I show that non-organization law may have a greater effect than organization law on the structure of firms because firms cannot easily avoid this law. Federal and state non-organization laws might significantly reduce the usefulness of business organization standard forms where transaction cost and legal considerations conflict. The efficiency of non-organization laws therefore depends on whether their interference with organization law can be reduced without unduly compromising their policy goals. Larry E. Ribstein Corporations http://works.bepress.com/ribstein/17 http://works.bepress.com/ribstein/17 Tue, 15 May 2007 16:21:47 PDT Jonathan Klick Law and Economics http://works.bepress.com/ribstein/18 http://works.bepress.com/ribstein/18 Tue, 15 May 2007 16:21:47 PDT This is the introductory essay for the Economics of Federalism, a book edited by the authors and forthcoming in Edward Elgar Publishing's ECONOMIC APPROACHES TO LAW series. This essay discusses the major issues and theories concerning federal political systems, which we define as systems that have a hierarchy of at least two distinct "state" and "central" levels, each with a well-defined scope of authority. The essay discusses two branches the economics literature. The first branch, on competitive federalism, stems from Tiebout's 1956 article. It focuses on the horizontal structure of federalism and examines jurisdictional competition between state governments for mobile individuals and resources. The second branch of the literature, on fiscal federalism, examines the vertical structure of federalism, or the division of public services and taxing power between the central and state governments. The essay also examines applications of the economic analysis of federalism to specific areas of the law, including corporate law, antitrust law, environmental law, choice of law rules, contractual choice of law, and public choice theory. Larry E. Ribstein Law and Economics http://works.bepress.com/ribstein/16 http://works.bepress.com/ribstein/16 Tue, 15 May 2007 16:21:47 PDT Behavioral finance raises questions about market efficiency, suggesting that noise, and not just information, moves securities prices. This creates a conundrum for the fraud on the market theory. While some fraud remedy is arguably necessary to ensure adequate disclosure, behavioral finance raises doubt about the efficiency of fraud remedies in noisy markets. These issues are particularly important in the wake of the Supreme Court's opinion in Dura v. Broudo Pharmaceuticals, Inc., which tightens proof of loss causation in fraud on the market cases and creates uncertainty about the future of the fraud on the market theory. This paper argues for interpreting Dura to sharply constrain the fraud on the market theory. It also proposes dealing with the need to deter fraud by allowing state courts and legislatures to supplement federal liability. More broadly, this paper suggests that, contrary to the assertions of many of its proponents, the indeterminacy of behavioral economics generally, and behavioral finance in particular, may support reducing rather than increasing legal paternalism. Larry E. Ribstein Corporate and Securities http://works.bepress.com/ribstein/14 http://works.bepress.com/ribstein/14 Tue, 15 May 2007 16:21:46 PDT Versions of this article were prepared for conferences in 2001 and 2006 in Europe dealing with the reform of private company law. The basic point is that recent U.S. law holds important lessons for Europe as it embarks on private company reform and confronts the jurisdictional competition regime enabled by Centros and other cases. The article shows that this competition is preferable to a single set of business association rules issued by a central planner. U.S. law has evolved through a bottom-up process of experimentation, in which firms can pick suitable rules by making both "horizontal" choices among the various jurisdictions and "vertical" choices among business forms available within jurisdictions. New and more efficient legal structures have evolved that regulators could not have envisioned only a few years ago. The article describes partnership type firms, contrasting both the traditional and new varieties and the partnership form with the corporate form. It then discusses the forces that have shaped partnership in the United States, the evolution in partnership terms wrought by these competitive forces, and implications of this process for European law. Larry E. Ribstein Corporations http://works.bepress.com/ribstein/15 http://works.bepress.com/ribstein/15 Tue, 15 May 2007 16:21:46 PDT Bruce H. Kobayashi Corporate and Securities http://works.bepress.com/ribstein/13 http://works.bepress.com/ribstein/13 Tue, 15 May 2007 16:21:46 PDT The 1987 film Wall Street is one of the most popular films dealing with business, and for many people provides an enduring image of capitalism. The film is therefore a good illustration of filmmakers' portrayal of business, and how this portrayal can influence public perceptions and misconceptions. This is important as public misconceptions of business, in turn, can contribute to the regulatory environment. This article discusses the view of business presented in the film, contrasts this view with an alternative, and more realistic, narrative, and shows how the film may have influenced subsequent regulation. Larry E. Ribstein Political Structure and Behavior (including Constitutional Law) http://works.bepress.com/ribstein/12 http://works.bepress.com/ribstein/12 Tue, 15 May 2007 16:21:45 PDT The Supreme Court's decision in Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Dabit, involves the reconciliation of three significant policy goals - controlling abusive litigation, deterring securities fraud, and preserving our federal system by limiting the federal government's power. These goals seem to conflict in that controlling litigation involves expanding federal power, thereby foreclosing potential state approaches to controlling fraud. In Dabit, the Court opted to broadly interpret the federal government's preemption of state securities remedies, thereby giving momentum to the federalization of corporate law. This article shows that forcing Congress to attend more closely to the role of state law might have encouraged a better reconciliation of the three policy goals. Specifically, Congress can control abusive litigation without sacrificing the states' role in remedying fraud by preserving fraud remedies imposed under state corporation laws. Letting firms choose the applicable state law would motivate states to develop reasonable remedies rather than to invite abusive litigation. A viable state fraud remedy would, in turn, free Congress and the courts to examine the appropriate extent of federal fraud remedies. Larry E. Ribstein Corporate and Securities