The Untold Story of Underwriting Compensation Regulation
William K. Sjostrom Jr.
University of Arizona - James E. Rogers College of Law
December 21, 2010
UC Davis Law Review, Vol. 44, p. 625, 2010
Arizona Legal Studies Discussion Paper No. 10-13
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.
Number of Pages in PDF File: 27
Keywords: Underwriting Compensation, Corporate Financing Rule, FINRA
JEL Classification: K2, K22
Date posted: March 31, 2010 ; Last revised: December 23, 2010