Cash Tender Offers for Shares—A Reply to Chairman Cohen

In the past few years, the corporate takeover device of the cash tender offer has grown in frequency, and thus in importance. Concomitantly, legislation designed to sweep this relatively unregulated method of acquiring corporate control into the ambit of the SEC has been proffered. In response to the reasons which have been propounded in favor of such regulation, the author analyzes the pending legislation, appraises its likely consequences, and evaluates its objectives

Cash Tender Offers for Shares—A Reply to Chairman Cohen

In the past few years, the corporate takeover device of the cash tender offer has grown in frequency, and thus in importance. Concomitantly, legislation designed to sweep this relatively unregulated method of acquiring corporate control into the ambit of the SEC has been proffered. In response to the reasons which have been propounded in favor of such regulation, the author analyzes the pending legislation, appraises its likely consequences, and evaluates its objectives

Insider Trading: Hayek, Virtual Markets, and the Dog that Did Not Bark.

This Essay briefly reexamines the great debates on the role of insider trading in the corporate system from the perspectives of efficiency of capital markets, harm to individual investors, and executive compensation. The focus is on the mystery of why trading by all kinds of insiders as well as knowledgeable outsiders was studiously ignored by the business and investment communities before the advent of insider trading regulation. It is hardly conceivable that officers, directors, and controlling shareholders would have remained totally silent in the face of widespread insider trading if they had seen the practice as being harmful to the company, to themselves, or to investors. By analogy with the famous article by Friedrich Hayek, The Use of Knowledge in Society, this Essay considers the problem of obtaining necessary information for managers of large corporate enterprises. The suggested analytical framework views the share price, sensitively impacted by informed trading, as a mechanism for timely transmission of valuable information to top managers and large shareholders. Informed trading in the stock market is also compared to “prediction” or “virtual” markets currently used by corporations and policymakers.

Insider Trading: Hayek, Virtual Markets, and the Dog that Did Not Bark

This Essay briefly reexamines the great debates on the role of insider trading in the corporate system from the perspectives of efficiency of capital markets, harm to individual investors, and executive compensation. The focus is on the mystery of why trading by all kinds of insiders as well as knowledgeable outsiders was studiously ignored by the business and investment communities before the advent of insider trading regulation. It is hardly conceivable that officers, directors, and controlling shareholders would have remained totally silent in the face of widespread insider trading if they had seen the practice as being harmful to the company, to themselves, or to investors. By analogy with the famous article by Friedrich Hayek, The Use of Knowledge in Society, this Essay considers the problem of obtaining necessary information for managers of large corporate enterprises. The suggested analytical framework views the share price, sensitively impacted by informed trading, as a mechanism for timely transmission of valuable information to top managers and large shareholders. Informed trading in the stock market is also compared to “prediction” or “virtual” markets currently used by corporations and policymakers

Insider Trading: Hayek, Virtual Markets and the Dog that Did Not Bark

This Essay briefly reexamines the great debates on the role of insider trading in the corporate system from the perspectives of efficiency of capital markets, harm to individual investors, and executive compensation. The focus is on the mystery of why trading by all kinds of insiders as well as knowledgeable outsiders was studiously ignored by the business and investment communities before the advent of insider trading regulation. It is hardly conceivable that officers, directors, and controlling shareholders would have remained totally silent in the face of widespread insider trading if they had seen the practice as being harmful to the company, to themselves, or to investors. By analogy with the famous article by Friedrich Hayek, The Use of Knowledge in Society, this Essay considers the problem of obtaining necessary information for managers of large corporate enterprises. The suggested analytical framework views the share price, sensitively impacted by informed trading, as a mechanism for timely transmission of valuable information to top managers and large shareholders. Informed trading in the stock market is also compared to “prediction” or “virtual” markets currently used by corporations and policymakers

A Rejoinder To Mr. Ferber

No congressman would tell his constituents, you may be losing money by SEC regulation, but that is irrelevant, since the men down there are serving a higher moral order. The truth of the matter is that there need be no conflict between good economics and good morality. The confusion arises when the attempt is made to substitute superficial ideas of morality for fundamental economic doctrine. Clearly every decision has an economic impact just as it has moral implications. But how can one judge the moral content or desirability of an act of economic regulation without knowing the effects of it

Insider Trading and the Law Professors

When Insider Trading and the Stock Market\u27 appeared in November, 1966, I was fully prepared for a goodly amount of disagreement. I was not prepared however for the emotional, almost hostile response my book received from some members of the academic community. This is not to say that all the reviews by law professors were unsympathetic and emotional in tone. Indeed the majority of them were not, and while critical reviews outnumbered favorable ones, most were in some degree mixed, and the tone was generally scholarly, impersonal, and in many cases constructive But the response to my book in the academic community outside of law schools has been more gratifying personally. Unfortunately this response cannot be objectively measured in terms of the number of pro and con book reviews, but with a number of economists of high academic standing my book is taken as an original contribution to the analysis of an important but heretofore almost unexamined area