Physics of non-Gaussian fields and the cosmological genus statistic

We report a technique to calculate the impact of distinct physical processes inducing non-Gaussianity on the cosmological density field. A natural decomposition of the cosmic genus statistic into an orthogonal polynomial sequence allows complete expression of the scale-dependent evolution of the morphology of large-scale structure, in which effects including galaxy bias, nonlinear gravitational evolution and primordial non-Gaussianity may be delineated. The relationship of this decomposition to previous methods for analysing the genus statistic is briefly considered and the following applications are made: i) the expression of certain systematics affecting topological measurements; ii) the quantification of broad deformations from Gaussianity that appear in the genus statistic as measured in the Horizon Run simulation; iii) the study of the evolution of the genus curve for simulations with primordial non-Gaussianity. These advances improve the treatment of flux-limited galaxy catalogues for use with this measurement and further the use of the genus statistic as a tool for exploring non-Gaussianity.Comment: AASTeX preprint, 24 pages, 8 figures, includes several improvements suggested by anonymous reviewe

Karmel’s Dissent: The SEC’s Use and Occasional Misuse of Section 21(a) Reports of Investigation

Section 21(a) of the Securities Exchange Act gives the SEC the option of publishing a report of its findings after conducting an investigation. Typically, the SEC issues such reports about once a year to highlight major compliance and enforcement issues. This Article examines the SEC’s use of Section 21(a) investigative reports with special attention to its 1979 report in Spartek, where Commissioner Roberta Karmel filed a famous dissent. In that opinion, she argued that the report effectively sanctioned conduct over which the SEC did not have jurisdiction and that Spartek did not have sufficient notice of its regulatory obligations. While such concerns have not been at issue in most Section 21(a) reports of investigation, they were recently raised by the SEC’s report in DAO, which analyzed whether a digital token was a security under the Howey test. While the SEC’s conclusion was reasonable, it was a close call, and the report did little to clarify the scope of the SEC’s jurisdiction over tokens. The SEC should be cautious in using reports of investigation to define its own jurisdiction and should actively seek adjudication to confirm the scope of its authority

Securities Class Actions and Bankrupt Companies

Securities class actions are often criticized as wasteful strike suits that target temporary fluctuations in the stock prices of otherwise healthy companies. The securities class actions brought by investors of Enron and WorldCom, companies that fell into bankruptcy in the wake of fraud, resulted in the recovery of billions of dollars in permanent shareholder losses and provide a powerful counterexample to this critique. An issuer\u27s bankruptcy may affect how judges and parties perceive securities class actions and their merits, yet little is known about the subset of cases where the company is bankrupt. This is the first extensive empirical study of securities class actions and bankrupt companies. It examines 1,466 securities class actions filed from 1996 to 2004, of which 234 (16 percent) involved companies that were in bankruptcy proceedings while the class action was pending. The study tests two hypotheses. First, securities class actions involving bankrupt companies ( bankruptcy cases ) are more likely to have actual merit than securities class actions involving companies not in bankruptcy ( nonbankruptcy cases ). Second, bankruptcy cases are more likely to be perceived as having merit than nonbankruptcy cases, regardless of their actual merit. The study finds stronger support for the second hypothesis than for the first, suggesting that judges and parties use bankruptcy as a heuristic for merit. Even when controlling for various indicia of merit, bankruptcy cases are more likely to be successful in terms of dismissal rates, significant settlements, and third-party settlements than nonbankruptcy cases. These results are evidence that judges use heuristics not only to dismiss cases but also to avoid dismissing cases. Securities class actions cannot be adequately understood without examining the subset of cases with a bankrupt issuer. The perception that securities class actions merely harass healthy companies should be revised in light of the significant number of bankruptcy cases in which shareholders have a greater need for a securities fraud remedy

Do the Securities Laws Promote Short-Termism?

Since 1970, the Securities and Exchange Commission (SEC) has required public companies to file reports summarizing their financial performance on a quarterly basis. Such mandatory quarterly disclosure has recently been criticized as incentivizing corporations to deliver short-term results rather than developing sustainable, long-term strategies. This Article examines the origins of the quarterly reporting system to assess whether the SEC should reduce the frequency of periodic filings. It concludes that much of the pressure on public companies to deliver short-term results emerged as the market increasingly focused on earnings projections issued by research analysts. The pressure to meet such projections can distort the behavior of public companies, but such distortions will only be significant in certain circumstances. Because it is unclear that the quarterly reporting system substantially impacts company incentives, the SEC should pursue modest reforms rather than take the radical step of eliminating quarterly disclosure. Quarterly disclosure is one example of how securities law tends to promote the short-term interests of transacting investors. In contrast, corporate law, which mediates the interests of shareholders, often gives managers the discretion to consider long-term interests. Strong securities law can be balanced by weak corporate law