The majority shareholder in a closely held corporation may use its control of the corporate machinery to appropriate wealth from the minority, and it is difficult for the majority to make a binding commitment not to do so. This paper models the interaction between majority and minority...

Economists have documented pervasive correlations between legal origins, modern regulation, and economic outcomes around the world. Where legal origin is exogenous, however, it is almost perfectly correlated with another set of potentially relevant background variables: the colonial policies of...

Between 1911 and 1931, 47 of the 48 states adopted state securities, or "blue sky," laws. This paper employs an event history analysis to analyze public interest, public choice, and ideological explanations for the enactment of blue sky laws. The data suggest that the decision to adopt a blue...

In the 1920s and 1930s, many public utilities in the United States were controlled by holding companies organized in pyramid form. This structure can add value to subsidiaries but can also facilitate extraction of wealth from the subsidiaries' public shareholders. I examine the effects of the...

Given the existence of contract, property, fraud, and company law, what is the purpose of securities laws? Broadly speaking, they can serve either of two functions, or some mix of both. The first is to facilitate contracting among entrepreneurs, managers, shareholders, and financial...

This paper reviews the academic literature that analyzes securities regulation from an economic perspective. It begins by describing the institutional foundations of securities law in the U.S. and distinguishing securities regulation from the private law of contracts, property, and fraud....

The Securities Act of 1933 is typically described as a "full disclosure" statute, yet many of its detailed provisions forbid disclosure about pending offerings during specified periods or using specified media. These features provided governmental enforcement of retail selling restrictions that...

Over the past half century, the SEC's regulations have become key determinants of the way in which stocks trade and the fees that exchanges charge for their services. The current equity market structure rules are contained primarily in the SEC's Regulation NMS. The theory behind Regulation NMS...

Both the Great Depression and the Great Recession followed systemic banking crises and preceded unusually weak and slow recoveries. The prior literature has identified monetary, household demand, and credit effects as contributors to the severe and prolonged downturns. This paper studies a...