May 14, 2020

First Amendment

First Amendment

The First Amendment and Restrictions on Advertising of Securities Under the Securities Act of 1933
      Michael E. Schoeman, 41(2): 377–92 (Feb. 1986)
Under the commercial speech doctrine, restrictions on advertising can be no more extensive than necessary to serve a substantial government interest. This Article analyzes under that test the restrictions on advertising of securities contained in the Securities Act. The restrictions are found not to satisfy the test because other, less burdensome means of achieving the Act's objectives are available.

The Effects of Lowe on the Application of the Investment Advisers Act of 1940 to Impersonal Investment Advisory Publications
      Lani M. Lee, 42(2): 507–51 (Feb. 1987)
This Article examines the 1985 Supreme Court decision in Lowe v. SEC, 472 U.S. 181 (1985), and the resulting expansion of the bona fide newspaper exclusion from the definition of investment adviser under the Investment Advisers Act of 1940. The Article also discusses potential problems in interpreting and applying the decision to impersonal investment advisory publications, First Amendment implications of the decision, and the SEC's recent legislative proposal designed to modify the result reached in Lowe.

SEC Enforcement Actions and Issuer Litigation in the Context of a "Short Attack"
     Charles F. Walker and Colin D. Forbes; 68(3): 687-738 (July 2013)
Issuers faced with a short attack—short selling of the issuer’s stock combined with the spread of negative rumors—may contemplate defensive strategies such as litigation and contacting government regulators, in addition to the investor and public relations efforts that are typically utilized in the wake of negative media coverage. Precedent calls for caution in these circumstances, as the record shows that the results of such strategies are mixed, with the SEC often turning its investigative focus to the issuer, and with costly litigation frequently resulting in compromise. This article begins with a discussion of the recent history of regulatory and legislative efforts to address concerns around short attacks and “naked” short selling. It then turns to a discussion of the SEC enforcement cases and private litigation relating to short attacks, and concludes that the SEC has appropriately brought enforcement cases only in clear-cut instances of fraud, while policing the margins through enforcement of the technical requirements of Regulation SHO. The article shows that the SEC enforcement record in this area, and the proof issues generally attendant to these cases, present important considerations for issuers who perceive themselves under siege in a short attack.

What Injures a Corporation? Toward Better Understanding Corporate Personality
     J.B. Heaton, 73(4) 1031-1050 (Fall 2018)
Understanding what injures a corporation can help us better understand corporate personality. Traditional corporate injury is injury to corporate assets or profits. This makes sense, because without defining impairment to corporate assets and profits as corporate injury, most of what we think of as “essential” about a corporation—locking assets into a protected partition—would be impossible: (1) protecting the going concern value of the corporation; (2) maintaining creditor priority; and (3) contracting through the corporate form. More recent expansions of what constitutes corporate injury, including injuries to a corporation’s right to political speech (Citizens United) and religious freedom (Hobby Lobby), seem at first to fit poorly with existing corporate theory. But corporations can “lock in” and “partition” more than assets; they can partition beliefs and virtues as well. Viewed this way, existing corporate theory (and the idea of corporate injury as harm to whatever is partitioned by the corporate form) may provide more help in understanding corporate constitutional rights than previously recognized.