Catholic University second-year law student Emily Rubino tackled the complexities of securities law regulation as the focus of her Student Scholars Series lecture, given before a mixed audience of faculty, staff, and fellow students on March 14.
Bolstered with a slide presentation, Rubino discussed “A New Standard for Reliance in Inefficient Primary Markets.”
Her address traced the history of remedies available to investors who have been defrauded by securities issuers. There has always been a mechanism to police public offerings, but not a similar system for private securities offerings, which is how the majority of capital is raised today. Both courts and federal regulators have struggled with fashioning remedies standards and tests that address the gap, offering approaches that have been criticized in some quarters as unworkable.
Courts have delved into the problem over the years, making the argument that only if the fraud covering the sale resulted in “worthless” securities would there be a basis for finding a cause of action. The problem is that securities are never completely worthless.
Rubino’s paper suggests that courts and securities regulators adopt a different approach, one that centers on the intent of the defrauder, rather than the ultimate impact that any fraudulent activity had on the value of the security.
The Columbus School of Law Student Scholars Series was instituted in 2009 both to recognize notable legal scholarship produced by members of the student body during the academic year and to foster the skills associated with presenting and defending that scholarship in a professional conference–style setting. Rubino was the unanimous choice of the reviewers among this year's entrants.
The Student Scholars Series format provides for a respondent. Michael J. Ryan, Jr., a former senior vice president and managing director of board services for the New York Stock Exchange, served as Rubino’s. Ryan is a 1991 alumnus of the law school and also an adjunct professor in its securities law program, teaching a securities markets regulation seminar.