Evaluation BEPS: A Reconsideration of the Benefits Principle and Proposal for UN Oversight
Reuven S. Avi-Yonah & Haiyan Xu

The Financial Crisis of 2008 and Great Recession that followed have exacerbated income inequality within and between countries. In the aftermath, U.S. legislators enacted the Foreign Account Tax Compliance Act, leading to the United States signing Intergovernmental Agreements for the exchange of tax information. The Organization for Economic Co-operation and Development developed the Multilateral Agreement for Administrative Assistance in Tax Matters and initiated the Base Erosion and Profit Shifting project to reduce tax evasion and tax avoidance globally. Although these efforts were well-intended, this Article argues that the tax policy response to the Financial Crisis and Great Recession has ultimately been inadequate. The problem, which is discussed in the following sections, is the benefits principle.

Taming the Dragon: Drawing Lines — A Case Study of Foreign Hedge Fund Lending to U.S. Borrowers and Transacting in U.S. Debt Securities
Julie A.D. Manasfi

Legislators, judges, and administrative agencies often have to distinguish between similar transactions for tax purposes. To help, Congress has drawn some lines via certain categories. These categories raise “line drawing” issues of whether seemingly similar benefits qualify as taxable under specific categories. In the taxation of foreign persons lending money to U.S. borrowers and transacting in U.S. debt securities, the relevant category is whether persons are “engaged in a U.S. trade or business.” This Article analyzes the engaged in a U.S. trade or business cubbyhole in the context of foreign hedge fund lending to provide guidance to legislators who are faced with line drawing issues.

Bargaining Bankrupt: A Relational Theory of Contract in Bankruptcy
Jonathan C. Lipson

This Article studies the growing use of contract in bankruptcy. Sophisticated “distress” investors (for example, hedge funds and private equity funds) increasingly enter into contracts amongst themselves and corporate debtors during bankruptcy in order to evade “mandatory” rules on the priority of distribu- tions, thus preferring themselves at the expense of other stakeholders (for example, employees of the corporate debtor). Bankruptcy courts that supervise these cases struggle with these priority-shifting contracts. They are asked to approve them, but have little theoretical or doctrinal guidance on how to assess them. This Article develops a “relational” framework to explore this shift toward contract in bankruptcy.

Puffery on the Market: A Behavioral Economic Analysis of the Puffery Defense in the Securities Arena
Adi Osovsky

Puffery statements in the securities arena are statements that are so optimistic, general, broad, or vague that they are considered immaterial as a matter of law and, thus, shielded from liability. The courts’ underlying assumption is that investors disregard puffery statements and do not rely on them when making investment decisions. Following recent scholarly criticism of the puffery defense, this Article aims to test whether investors indeed disregard puffery statements when making investment decisions.



Age Before Equity? Federal Regulatory Agency Disgorgement Actions and the Statute of Limitations
Michael Columbo and Allison Davis

April 4, 2017

At what point may a person rest assured that the government will not confiscate her money due to a past alleged regulatory infraction? In Kokesh v. SEC, the Supreme Court is poised to resolve a three-way split among the federal circuit courts of appeals over whether the statute of limitations in 28 U.S.C. § 2462 applies to federal regulatory actions seeking disgorgement of a person’s funds for long-past alleged regulatory infractions. The Supreme Court should reverse the Tenth Circuit’s decision and hold that the statute of limitations categorically applies to actions seeking confiscation of funds for past regulatory infractions, regardless of whether the government seeks the funds through forfeiture or disgorgement.

A Federal Fiduciary Standard Under the Investment Advisers Act of 1940: A Refinement for the Protection of Private Funds
Tyler Kirk

December 6, 2016

The appropriate role of the fiduciary standard in the financial industry has garnered a lot of attention of late. However, what has gotten lost in the debate is the astonishing fact that Article III courts have barely begun to interpret one of the oldest federally established fiduciary relationships, that of the investment adviser and its client. This Article argues that an investment adviser’s liability under section 206–when acting as the agent for a private fund–should be determined under a federally established uniform framework, and should not be contingent upon the application of state fiduciary law.

Increased Antitrust Merger Enforcement: Considerations for Your Next Deal
Michael B. Bernstein, Justin P. Hedge, and Francesca Pisano

December 5, 2016

Antitrust merger enforcement has become increasingly aggressive in recent years with the Federal Trade Commission and Antitrust Division of the Department of Justice demonstrating that they are ready to litigate to block deals they believe will harm competition. While an increasing number of mergers have been challenged and blocked in federal court, some are prevailing at trial or managing to find a path to clearance without litigation. This Article reviews the trends that have emerged in federal merger enforcement and discusses some key differences between deals that have been cleared and those that have faced government opposition.

Bitcoin and Virtual Currencies: Welcome to Your Regulator
Matthew Kluchenek

December 3, 2016

Among all the U.S. regulators interested in regulating Bitcoin and virtual currencies, the Commodity Futures Trading Commission (CFTC) is determined to be at the forefront. Since late 2014, he CFTC has been aggressive in addressing not only wrongful conduct involving Bitcoin derivatives, but also wrongful conduct involving certain spot Bitcoin transactions. The CFTC’s actions are a clarion call for market participants to understand the broad breadth of the CFTC’s jurisdiction, and to take notice of the requirements that may apply both to derivatives and to certain physical transactions involving Bitcoin and other virtual currencies.