By Michael Pflueger Introduction After the collapse of the Bahamas-based cryptocurrency exchange, FTX, Congress has been under immense public pressure to pass legislation that regulates the digital asset industries.[1] As of right now, there is no specific agency designated to regulate digital assets. This led several departments to supervise the digital asset industries. With that in…
Tag: SEC
Robinhood: Success, Legal Battles, and Outlook
This blog post examines Robinhood’s successful business model, two of its legal battles, and its outlook. A New and Successful Investing Model Launched on Apple’s App Store in December 2014, Robinhood makes it easy for its investors to trade.1 Signing up for a Robinhood account on its simple app takes five minutes or less.2 Moreover,…
Blockchain and Cryptocurrency in Murky Regulatory Waters
Blockchain, cryptocurrency, NFTs—what is it all? It all starts with distributed ledger.1 The distributed ledger is a virtual ledger (in common parlance, a record) that is shared across a network of computers. A copy of the ledger is on every computer across the network. Each block in a distributed ledger contains data that must be…
Crossing the Rubicon: The Consequences of National Securities Exchanges Suing the SEC
In 2019, the three largest American stock exchange groups, New York Stock Exchange (NYSE), Nasdaq, and Cboe (formerly known as the Chicago Board Options Exchange) sued their regulator, the Securities and Exchange Commission (SEC).1 The lawsuit was over the SEC’s Transaction Fee Pilot.2 The novelty of suing one’s own regulator was not lost on the…
A Primer on the (Not So) Special Purpose Acquisition Company Boom
Despite the unprecedented nature of 2020 and the challenges brought by the COVID-19 pandemic, Special Purpose Acquisition Companies (“SPACs”) cemented their place in, and return to, the world of finance. SPAC initial public offerings (“IPOs”) erupted in 2020, with greater average size and overall frequency. In 2020, SPAC IPOs raised over US$89 billion in gross…
Modern Anti-Manipulation Laws in a World of Social Media and Increased Retail Trading
In January and February of 2021, as the world continued to struggle through the COVID-19 pandemic, the United States’ stock market experienced its own unprecedented event. A group of retail investors who were active participants on r/wallstreetbets, a thread on the social networking website Reddit, became aware that several large hedge funds held extreme short…
Escaping Shareholder Primacy – Without Waiting for Congress
Introduction In a statement with the Business Roundtable (BRT), 181 major American CEOs recently proclaimed their desire to serve a variety of stakeholder interests beyond merely those of shareholders.1 However, stakeholder maximization is nearly impossible today for public corporations due to the rise of activist hedge funds; such funds, which exercise unprecedented control over public…