The SEC and the Failure of Federal Takeover Regulation
Steven M. Davidoff
Ohio State University (OSU) - Michael E. Moritz College of Law; Ohio State University (OSU) - Department of Finance
Florida State University Law Review, Vol. 34, p. 211, 2007
Wayne State University Law School Research Paper No. 07-11
In this Article, I argue that the current federal takeover law is a failure. I do this by first exploding the commonly accepted academic myth of the federal government as an active regulator of takeovers. Rather, since the twilight of the 1980s, the SEC has abandoned its earlier presence as the nation's primary takeover regulator. The consequence of this abstention is that the federal takeover code has become obsolete. It oftentimes regulates incongruously, does not regulate important areas, or regulates in a manner inconsistent with the welfare of its relevant parties. Moreover, in the SEC absence the Delaware courts have emerged as the nation's takeover regulator. Yet, Delaware's interests are narrower and more manager-oriented than the federal government's. The consequence is that today's Delaware-erected takeover code is suboptimal and contrary to national interests. This Article exposes these deficits and argues that they can be cured through an SEC-initiated review and update of the federal takeover law and a going-forward active, reengaged SEC as a principal regulator of takeovers.
Number of Pages in PDF File: 59
Keywords: Williams Act, Takeovers, SEC, Mergers and Acquisitions, Delaware
JEL Classification: K22, G34Accepted Paper Series
Date posted: September 1, 2006 ; Last revised: November 16, 2007
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