Vol. 103 Issue 2

Part I of this Note discusses the original rationale for the mass action
provisions, as well as their statutory mechanics. It also provides an account of
how the “proposal for joint trial” language has been interpreted since its
passage, with a focus on how plaintiffs have—or have not—been successful in
avoiding removal jurisdiction under CAFA. Part II argues that the proposal
requirement is subject to manipulation. It highlights the reality that settlement,
rather than trial, is often the objective in civil litigation and explains how
modern alternatives to the class action can achieve this goal without proposing a
joint trial. Part III addresses the implications of these issues, attempting to
determine what role the mass action provisions will play in the future litigation
of mass disputes.

The prohibition against insider trading is becoming increasingly anachronistic
in markets where derivatives like credit default swaps (CDSs) operate.
Lenders use these instruments to trade the credit risk of the loans they extend.
By design, CDSs appear to subvert insider trading laws, insofar as lenders rely
on what looks like insider information to transfer or externalize the risk of a
loan to another institution. At the same time, the harm caused by using insider
information in CDS markets can depart radically from the harms envisioned
under existing case law. In the traditional account of insider trading, shareholders
systematically lose against informed insiders. However, with CDS trading,
shareholders of the debtor company can emerge as winners where this company
enjoys access to cheaper credit and lower funding costs.
A thorough rethinking of traditional theory is thus required, as well as a more
robust, theoretical account of the efficiency and welfare implications of insider
trading in a world animated by complex derivatives markets. This Article shows
that trading on insider information in CDSs can improve at least the informational,
if not also the allocative efficiency of financial markets in ways traditional
accounts have scarcely anticipated. However, in doing so, CDS markets
reveal that this informational gain can render markets “too” efficient where
they impound new information selectively and with such force that market
stability itself can suffer. Collectively, these observations suggest a need to
revisit the insider trading prohibition itself—and to explore whether consistency
can (and should) factor into supervisory approaches in U.S. equity and derivatives
markets.

Jurisprudence and legisprudence have had their days in the sun. Yet so much
of law in its daily working—authoritative decisions by government officials
with binding public policymaking functions—remains immune from systematic
analysis. Of course, what scholars and lawyers call “administrative law” shines much light into the labyrinthine regulatory state. The subject has long explored ways that many governmental decisions neither judicial nor legislative can be thought of as law and need to be controlled through procedural and substantive oversight, often by judges and sometimes through structural design. There remain, however, significant domains of lawmaking in the administrative state that continue to be hidden from view. Leveraging recent work on the role of precedent in the Federal Executive Branch, we focus on the Office of Information and Regulatory Affairs (OIRA) nestled within the Office of Management and Budget (OMB) that oversees federal regulatory activity, to introduce and explore some foundational questions of what we call “regleprudence”: the systematic analysis of regulation refracted through accounts of the role and nature of law.

In June of 2013, U.S. Securities and Exchange Commission (SEC) Chair
Mary Jo White announced one of the most significant reforms to the agency’s
settlement policies in its eighty-year history of regulating the financial markets.
In certain cases of “egregious” conduct, the Commission would require from
defendants an explicit admission of wrongdoing as a non-negotiable condition
of settlement. In these cases, the agency’s time-honored policy of allowing
defendants to neither admit nor deny the SEC’s factual allegations—while
disgorging their ill-gotten gains and paying penalties—would not apply. Chair
White has championed this asterisk to its “no admit, no deny” policy as a
common-sense move towards greater public accountability, but the liability
ramifications for defendants could be sweeping and grave.

This Note provides an analytical framework for evaluating or controlling the
likelihood of collateral estoppel effects of a given settlement containing an
admission. Part I recounts the history and development of the agency’s admissions
policy, with particular emphasis on events since the Financial Crisis of
2007–2008. Practitioners with a firm understanding of the policy and its origins
are advised to skip directly to Part II. Part II unpacks the collateral estoppel
doctrine in the context of SEC settlements containing admissions of fraudulent
corporate misconduct by assessing the viability of estoppel in subsequent
criminal prosecutions, the viability of estoppel in subsequent private actions,
and the scope of issues precluded where the doctrine does apply. This Part also
provides a short survey of other potential consequences of admissions. Part III
examines as case studies the first eight SEC settlements containing admissions
of wrongdoing, extracted in the first year of the new regime, and makes general
observations about the agency’s implementation of the new policy.

Concerns about cyberwar, cyberespionage, and cybercrime have burst into focus in recent years. The United States and China have traded accusations about cyber intrusions, and a December 2012 U.N. conference broke down over disagreements about cyberspace governance. These events show the increased risk of cyberconflict and the corresponding need for basic agreement between states about governing cyberspace.

States agree that something must be done, but they disagree about almost everything else. Two competing visions of cyberspace have emerged so far: Russia and China advocate a sovereignty-based model of cyber governance that prioritizes state control, while the United States, United Kingdom, and their allies argue that cyberspace should not be governed by states alone.

Prior academic writing has focused on cyber issues related to states’ regula- tion of their citizens, but this Article addresses the now-pressing state-to-state issues. A limited analogy to existing legal regimes for the high seas, outer space, and Antarctica shows that global governance of cyberspace is possible. Moreover, these existing regimes provide a menu of options for governance and establish a baseline against which cyber governance can be assessed.

The Article examines three fundamental questions that states have answered for the other domains and must now answer for cyber: (1) what role, if any, private parties should play in governance; (2) how the domain should be governed (no governance system, treaty, or norms); and (3) whether and how to regulate military activities in the domain. The answers for the old domains were similar—multilateral governance, governance by treaty, and some level of demilitarization. But cyber differs from the old domains in important ways that suggest the answers for cyber should be different. This Article argues for multistakeholder governance, governance through norms, and regulated militarization.