The Untold Story of Underwriting Compensation Regulation

27 Pages Posted: 31 Mar 2010 Last revised: 23 Dec 2010

William K. Sjostrom Jr.

University of Arizona - James E. Rogers College of Law

Date Written: December 21, 2010

Abstract

The Article examines the regulation of underwriting compensation by the Financial Industry Regulation Authority. Although the regulation dates back almost 50 years and impacts virtually every U.S. public offering of securities, its propriety has received zero attention from legal scholars. The Article fills the gap in the literature. In that regard, it provides a history and overview of the regulation and critiques its policy justifications. The Article finds the justifications deficient and the regulation’s costs conceivably quite large. Consequently, it contends that the regulation should be abolished.

Keywords: Underwriting Compensation, Corporate Financing Rule, FINRA

JEL Classification: K2, K22

Suggested Citation

Sjostrom, William K., The Untold Story of Underwriting Compensation Regulation (December 21, 2010). UC Davis Law Review, Vol. 44, p. 625, 2010; Arizona Legal Studies Discussion Paper No. 10-13. Available at SSRN: https://ssrn.com/abstract=1582498

William K. Sjostrom Jr. (Contact Author)

University of Arizona - James E. Rogers College of Law ( email )

P.O. Box 210176
Tucson, AZ 85721-0176
United States

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