State Limited and Private Offering Exemptions: The Maryland Experience in a National Perspective

A limited or private offering of securities exempted from federal registration still may have to be registered in one or more states, because the state exemptions for these transactions are often different from the available federal exemptions. These differences, however, do not reflect a principled allocation of regulatory responsibilities between the Securities and Exchange Commission and the state securities administrators, but rather derive from historical, philosophical, and structural differences between the federal and state securities laws. Recent reforms of the federal exemptive system have produced new concern about the impact of these differences on the capital formation process, and have led to a reevaluation of the goals of state limited and private offering exemptions. Reevaluation of the exemptive scheme under the Maryland Securities Act in light of these developments has resulted in both statutory amendment and adoption of two new exemptive rules. The author, who was one of the draftsmen of these rules, explores their relation to the national and Maryland experience with state limited and private offering exemptions, and examines many of the novel questions of policy and practice generated by the new Maryland rules

Utility, The Good and Civic Happiness: A Catholic Critique of Law and Economics

This paper contrasts the value maximization norm of welfare economics that is central to law and economics in its prescriptive mode to the Aristotelian/Aquinian principles of Catholic social thought. The reluctance (or inability) of welfare economics and law and economics to make judgments about about utilities (or preferences) differs profoundly from the Catholic tradition (rooted in Aristotle as well as religious faith) of contemplation of the nature of the good. This paper also critiques the interesting argument by Stephen Bainbridge that homo economicus bears a certain affinity to fallen man, and that law and economics thus provides appropriate rules for a fallen world. From a Catholic perspective, the social vision of neo-classical economics and its progeny (welfare economics and law and economics) rests on a concept of human autonomy and a utilitarian concept of pleasure inconsistent with the Aristotelian and Aquinean concept of virtue and the conception of civic happiness articulated by Antonio Genovesi and other Catholic economists

Lawyers in the Perfect Storm

The multiple corporate collapses and scandals of recent years, for which Enron is a convenient shorthand, resulted from a perfect storm in which regulatory oversight, the law of fiduciary duty, gatekeepers, market discipline, and contractual incentives all failed to prevent gross self-dealing, conflicts of interest, and deception, or themselves produced perverse consequences. The story of this simultaneous failure of the structures in place since the New Deal and before, has received considerable attention in both the popular and scholarly literature, but is summarized here to provide a context for consideration of the contributions that lawyers made to the perfect storm. The contribution of lawyers has received less attention than that of gatekeepers such as auditors and research analysts, perhaps because their complex role as both advocates and gatekeepers does not lend itself to a relatively simple morality tale, as did the failures of the auditors and analysts. This article attempts to identify the various types of failures by lawyers in these cases, and argues that there is no single way to describe or explain them; lawyers contributed to the perfect storm in at least several different ways. This complexity suggests that the SEC\u27s new professional standards for lawyers, while perhaps helpful, do not provide a comprehensive solution to the problems that produced a significant contribution by lawyers to the perfect storm

State Limited and Private Offering Exemptions: The Maryland Experience in a National Perspective

A limited or private offering of securities exempted from federal registration still may have to be registered in one or more states, because the state exemptions for these transactions are often different from the available federal exemptions. These differences, however, do not reflect a principled allocation of regulatory responsibilities between the Securities and Exchange Commission and the state securities administrators, but rather derive from historical, philosophical, and structural differences between the federal and state securities laws. Recent reforms of the federal exemptive system have produced new concern about the impact of these differences on the capital formation process, and have led to a reevaluation of the goals of state limited and private offering exemptions. Reevaluation of the exemptive scheme under the Maryland Securities Act in light of these developments has resulted in both statutory amendment and adoption of two new exemptive rules. The author, who was one of the draftsmen of these rules, explores their relation to the national and Maryland experience with state limited and private offering exemptions, and examines many of the novel questions of policy and practice generated by the new Maryland rules