Abstract

http://ssrn.com/abstract=2426661
 


 



The Virtues of Private Securities Litigation: An Historic and Macroeconomic Perspective


Steven A. Ramirez


Loyola University of Chicago School of Law

April 18, 2014

Loyola University Chicago Law Journal, Vol. 45, No. 3, 2014
Loyola University Chicago School of Law Research Paper No. 2014-04/18

Abstract:     
In the wake of the Great Depression, the federal securities laws operated to mandate disclosure of material facts to investors and extend broad private remedies to victims of securities fraudfeasors. The revelation of massive securities fraud underlying the Great Depression animated the federal securities laws as investment plunged after 1929 and failed to recover for years. For over sixty years after the enactment of the federal securities laws, no episode of massive securities fraud with significant macroeconomic harm occurred. The federal securities laws thereby operated to facilitate financial stability and prosperity, in addition to a superior allocation of capital. Unfortunately, as memories faded and inequality soared, corporate and financial elites (with the active aid of lawmakers) launched a sustained attack upon private enforcement of the securities laws. Soon thereafter the horrors of the Great Depression returned and massive securities fraud triggered the Great Recession of 2008 as economists would predict. This Article argues for a rollback of the war on private securities litigation to at least the 1980s based upon history and economic science. This would at least restore sensible pleading standards, impose liability on all participants in securities frauds (including aiders and abettors) and allow the states to impose more demanding standards of liability on wrongdoers in financial markets.

Number of Pages in PDF File: 70

Keywords: securities fraud, securities litigation, financial stability, corporate governance

JEL Classification: A12, E32, G28, K22, L51, N12, N22

Accepted Paper Series





Download This Paper

Date posted: April 20, 2014 ; Last revised: May 27, 2014

Suggested Citation

Ramirez, Steven A., The Virtues of Private Securities Litigation: An Historic and Macroeconomic Perspective (April 18, 2014). Loyola University Chicago Law Journal, Vol. 45, No. 3, 2014; Loyola University Chicago School of Law Research Paper No. 2014-04/18. Available at SSRN: http://ssrn.com/abstract=2426661

Contact Information

Steven A. Ramirez (Contact Author)
Loyola University of Chicago School of Law ( email )
25 E. Pearson
Chicago, IL 60611
United States

Feedback to SSRN


Paper statistics
Abstract Views: 307
Downloads: 83
Download Rank: 184,085

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo2 in 0.281 seconds