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Abstract:
What role does equality play in a conception of justice? The principle of equality begs the question of which people affected by a law should have equal status or rights. Even if a regime presumes that all persons are naturally entitled to equal protection of the laws, important judgments about which cases should be treated alike still cannot be resolved without legal, moral, or political standards independent of equality.

As American courts reach such judgments based on standards other than equality, the language of equality becomes useful only as a rhetorical device. The rhetoric of equality can be manipulated to cloud judicial decisions which are actually based on independent values. Phatic appeals to equality are particularly evident in the Supreme Court's significant decisions addressing race-conscious and gender-conscious educational programs. In all of its meaningful opinions regarding race-conscious and gender-conscious educational programs, the Supreme Court appeals to the rhetoric of equality. That rhetoric may appear compelling, but it is as vacuous as the equality principle on which it is based. The rhetoric of equality typically masks substantive, political, or moral judgments unrelated to equality itself.

The Supreme Court's decisions in the arena of education may well be based on substantive judgments about the importance of educational opportunity. Although the Court thus far has rejected the existence of a fundamental constitutional right to educational opportunity, it nonetheless seems to have quietly recognized the substantive value of educational opportunity in its equal protection decisions.

racial discrimination, equality and justice, rhetoric of equality, educational opportunity, equal protection

Abstract:
In his article, The Corporate/Securities Attorney as a Moving Target - Client Fraud Dilemmas, Marc Steinberg does an outstanding job of identifying the complex and significant ethical issues currently confronting securities lawyers. In this article, I attempt to explore the important legal and political implications of Professor Steinberg's salient points. First, the article places the absence of an independent obligation of an attorney to blow-the-whistle on a client in the context of evolving federal securities law precedent. Although the Seventh Circuit was unwilling to create a federal common law obligation to blow the whistle, other circuits have come close to doing so, creating a patchwork of judicial authority on ethical questions. Second, the article argues that the Sarbanes-Oxley Act, and the SEC Rules promulgated pursuant to its authority, may indeed impose upon attorneys a federal duty to disclose client confidences in certain situations. Third, the article observes that the creation of such a federal duty is consistent with a broader trend in securities law jurisprudence toward the creation of national standards. Finally, the article also suggests that an attorney's breach of the newly-created federal duty to blow-the-whistle on the client could itself give rise to a viable private right of action for securities fraud.

sarbanes oxley act, SEC, fiduciary responsibilities, confidentiality, whistle blowing, securities fraud

Abstract:
An event study is a statistical regression analysis that merely provides one method of examining the effect of an event, such as a disclosure of information on the market price of a security. Yet, the law governing event studies has become inseparable from the substantive law governing securities fraud litigation. Courts have effectively collapsed securities fraud actions into a single question: Whether the defendant’s misrepresentation or omission created a disparity between the transaction price of a security and its true value measured by the precise reaction of the market price to the disclosure of the concealed information. A misrepresentation or omission that creates that disparity is material. Plaintiffs who invest at a market price that communicates that disparity have shown reliance by the fraud on that market price. The disclosure of the previously concealed information alters the market price to create economic loss, so plaintiffs can establish loss causation. The measure of damages then is the quantification of that precise alteration or correction in the market price.

The interrelated questions of materiality, reliance, loss causation, and damages all require an event study for their resolution. As such, an investor who fails to offer an event study performed by a qualified expert has little chance of prevailing. The dispositive role now played by event studies, however, is inconsistent with the Seventh Amendment and the federal securities laws. Rather, an event study requirement poses an unconstitutional and unwarranted barrier to meritorious securities fraud suits.

securities, fraud, securities fraud, event studies, regression analysis

Abstract:
The Supreme Court's presumption that race-conscious educational decisions violate the Equal Protection Clause is based on its premise that white students and nonwhite students are alike in their educational opportunities. The evidence to the contrary is overwhelming. This article first shows that race-conscious educational decision-making should satisfy even the Supreme Court's current, strict equal protection scrutiny. The Supreme Court has recognized that states have a compelling interest in encouraging their educational institutions to provide educational benefits to their citizens. This article demonstrates that a school district's use of student assignment to produce a meaningful number of diverse students within a school, or classroom, is narrowly tailored to achieve the compelling governmental interest in teaching racial literacy. This article proceeds to demonstrate that the Court's current template for analyzing race-conscious decisions by public school officials should be modified. That template is the product of judicial precedent detached from any authentic understanding of the principle of equality undergirding the Equal Protection Clause. An analysis tethered to an authentic principle of equality would begin by scrutinizing whether the state educational administrators are reasonable in their assessment of the practical educational differences in persons that justify differential educational treatment. Where teaching racial literacy depends on understanding the existence of at least some racial differences, a program that is conscious of those differences in meeting its goal of teaching about them cannot be inconsistent with an authentic understanding of equality.

race-conscious educational strategies, racial discrimination, equal protection, racial literacy

Abstract:
The class action device is vital to deterring securities fraud and remedying its victims. Nonetheless, the federal courts have begun to convert the class certification process into a premature trial on the merits, thereby precluding victims of securities fraud from pursuing otherwise valid claims of financial wrongdoing. In particular, in a series of important decisions, the federal courts have required plaintiffs to prove the essential elements of their securities fraud claims at the preliminary class certification stage.

This article demonstrates why this trend should end. The judicial creation of class certification merits trials in securities fraud cases is inconsistent with the federal securities laws and Supreme Court precedent. Moreover, as this article also shows, the judicial resolution of the merits of a securities fraud claim at the class certification threshold infringes on the Seventh Amendment right to trial by jury. Nor can class certification merits trials be excused by any legitimate policy concerns. The harm purportedly averted by such trials is illusory. The supposed risk that the threat of class certification and post-certification discovery costs will produce in terrorem settlements is unfounded and even illogical. Finally, this article concludes that the harm caused by class certification merits trials is substantial. This new procedure will over-deter the very type of private securities fraud claims that both supplement Securities and Exchange Commission enforcement actions and compensate victims for losses caused by securities fraud.

Abstract:
Confidential sources are critical to preventing financial harm and prosecuting corporate misconduct. In order to overcome the Private Securities Fraud Litigation Act's heightened pleading requirements, victims of securities fraud often have to rely on confidential sources for particularized facts regarding fraud. In its most recent decision regarding those pleading requirements, the United States Supreme Court held that plaintiffs must allege a strong inference of scienter; meaning the inference of culpability must be at least as likely as nonculpable competing inferences. The question left unanswered by the Court in Tellabs, however, is whether securities fraud victims can satisfy this pleading standard through the use of confidential sources.

This article will show that Tellabs cannot fairly be construed to preclude plaintiffs from relying on confidential sources to satisfy the PSLRA's securities fraud pleading requirements. Section II of this article will examine the federal courts' pre-Tellabs treatment of confidential sources for securities fraud cases based on the particularity provision of the PSLRA. This section also will discuss the Tellabs decision and its emergent rule. Section III of this article will analyze the circuits' post-Tellabs treatment of confidential sources. The lower federal courts thus far are split on the place of confidential sources in securities fraud pleading. A recent Seventh Circuit decision invoking Tellabs requires courts to discount allegations from confidential witnesses. This Section will show that the Tellabs rule does not justify such a discounting of confidential sources. Finally, this article will conclude that, while the federal courts previously assessed confidential informants from a particularity viewpoint, some federal courts after Tellabs are beginning to treat confidential sources under an erroneous strong inference standard. The continuation of that trend will disserve the Supreme Court's precedents, the will of Congress and the victims of securities fraud.

Securities Fraud, Confidential Source, Confidential Witness, Scienter