Lying and Getting Caught: An Empirical Study of the Effect of Securities Class Action Settlements on Targeted Firms
Paying for Long-Term Performance
In the aftermath of the financial crisis, regulators, firms, and investors are seeking to put in place executive pay arrangements that avoid rewarding executives for short-term gains that do not reflect long-term performance. This Article seeks to contribute to these efforts by analyzing how pay arrangements can and should best be tied to long-term performance. Our analysis focuses on equity-based compensation, the most important component of executive pay arrangements.
Rethinking the Regulation of Securities Intermediaries
Do Class Action Lawyers Make Too Little?
Credit Default Swap Spreads as Viable Substitutes for Credit Ratings
In response to the recent financial crisis, commentators have criticized certain credit rating agencies, known as Nationally Recognized Statistical Rating Organizations (NRSROs), and credit default swaps (CDSs). Regulators have proposed a range of reforms in both areas but have not considered the links between them. This Article considers one potential link: whether CDS markets could play a role in financial reform related to NRSROs.
More specifically, one set of proposals suggests that legislators and regulators reduce the dysfunctional incentives associated with overreliance on NRSRO credit ratings. Although there is support for this proposal in theory, one objection forestalling reform has been that, notwithstanding the problems associated with credit rating agencies, there do not appear to be viable substitutes for credit ratings. Indeed, ongoing skepticism and criticism about CDS markets has reinforced the objection. In simple terms, the objection is that regulators and investors should not replace one broken system (credit ratings) with another broken system (CDSs).