The SEC and the Failure of Federal Takeover Regulation

59 Pages Posted: 1 Sep 2006 Last revised: 16 Nov 2007

See all articles by Steven Davidoff Solomon

Steven Davidoff Solomon

University of California, Berkeley - School of Law; European Corporate Governance Institute (ECGI)


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.

Keywords: Williams Act, Takeovers, SEC, Mergers and Acquisitions, Delaware

JEL Classification: K22, G34

Suggested Citation

Davidoff Solomon, Steven, The SEC and the Failure of Federal Takeover Regulation. Florida State University Law Review, Vol. 34, p. 211, 2007, Wayne State University Law School Research Paper No. 07-11, Available at SSRN:

Steven Davidoff Solomon (Contact Author)

University of California, Berkeley - School of Law ( email )

215 Boalt Hall
Berkeley, CA 94720-7200
United States

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels

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