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More on Business Roundtable v. SEC



Despite the D.C. Circuit's devastating slapdown of Rule 14a-11, the SEC continues to refuse to consider the costs of its regulations. More: Ribstein; Bainbridge; Bainbridge roundup.

Meanwhile, the extensive new Dodd-Frank regulation of hedge funds that passed with the help of various Soros organizations is causing George Soros to go Galt with his own hedge fund rather than comply. As Ira Stoll points out, Soros had his problems with French regulators.

Does this regulation really help investors? A recent empirical study (via Bainbridge) casts doubt:

This study of initial public offerings (IPOs) carried out on the Berlin and London stock exchanges between 1900 and 1913 casts doubt on the received "law and finance" wisdom that legally mandated investor protection is pivotal to the development of capital markets. IPOs that resulted in official quotations on the London Stock Exchange performed as well as Berlin IPOs despite the Berlin market being more extensively regulated than the laissez faire London market. Moreover, the IPO failure rate on these two stock markets was lower than it was with better regulated US IPOs later in the 20th century.

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Isaac Gorodetski
Project Manager,
Center for Legal Policy at the
Manhattan Institute
igorodetski@manhattan-institute.org

Katherine Lazarski
Press Officer,
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.