Featured Articles From Our Most Recent Print Issue
I am pleased to be in Chicago to discuss the current state of our capital markets, both public and private, and I want to thank the University of Chicago Business Law Review for inviting me to be a part of this important and timely symposium. I must note at the outset that my remarks are my own and do not necessarily represent the views of the Public Company Accounting Oversight Board, my fellow Board members, or the staff of the PCAOB.
Financial innovation in the past has occasionally outpaced its regulators. But velocity today is increasingly becoming a tool of regulatory arbitrage. This essay argues that the central challenge of contemporary securities regulation is not merely a temporal lag — law trailing behind markets — but inundation: a flood of capital formation that overwhelms and thereby evades prudent and effective regulation. Whereas earlier generations of innovators cultivated legitimacy through regulatory engagement, today's most aggressive participants can embrace speed as a shield, racing to achieve scale and indispensability before thoughtful oversight can arrive. The result leaves regulators with only two unsatisfying tools: deliberate rulemaking that risks functional irrelevance, or precipitous enforcement that risks penalizing genuine novelty. Inundation can threaten regulatory legitimacy itself, not merely to individual investors, as each episode in which speed beats law teaches the next generation of entrepreneurs that it can. The essay concludes by considering adaptive mechanisms — sandboxes, principles-based frameworks, and algorithmic surveillance — and encourages greater deliberation in regulatory design rather than awaiting moments of crisis.
For the last quarter-century, IPOs have been declining. SEC officials usually attribute the decline to startups’ choices to stay private. But that explanation is incomplete. As startups grow, they face a three-way choice between going public, staying private, and being acquired, and they have increasingly chosen the third option. In this Essay, we show how securities regulation pushes startups towards acquisitions by increasing the cost of raising capital and accessing liquidity in both public and private markets. We consider how the trend towards acquisitions could reduce competition, innovation, opportunities for diversification, and transparency. And we offer suggestions for how the SEC could create conditions for independent companies to thrive while preserving safeguards that protect investors.
Special purpose acquisition companies (SPACs) are public companies organized to die. Unlike ordinary corporations, which enjoy perpetual existence by default, SPACs are legally required to consummate a merger within a fixed period—usually two years, never more than three—or else liquidate and return investors’ cash.
This Article takes that clock seriously and argues that limited life is foundational to the SPAC form: it disciplines sponsors by preventing indefinite warehousing of capital, reassures investors by guaranteeing liquidity, and makes the form marketable in the first place. A perpetual SPAC would be good for nobody.
At the same time, the SPAC clock distorts incentives, creating end-period pressures to close “any deal before no deal.” Delaware fiduciary duty law, SEC disclosure reforms, and reputational markets—all operating in the shadow of the deadline—mediate these countervailing forces.
SPACs are one member of the broader class of organizations intentionally endowed with a fixed lifespan. Other examples include private equity funds, spend-down foundations, and government agencies subject to sunset laws. Situating SPACs within the author’s broader Temporal Governance framework reveals duration as a central lever of organizational design. Perpetuity is not destiny. Time can serve as the fulcrum of governance—and for SPACs, it is the variable without which the form could not exist.
Private company directors face a complex and high-stakes environment when a liquidity event approaches. This article analyzes the fiduciary duties that guide directors through this process, from the foundational principles of care and loyalty to the challenges posed by a range of exit paths. Drawing on key Delaware case law, we deconstruct the potential conflicts faced by “dual fiduciaries” on venture-backed boards and scrutinize the legal and financial dynamics of company sales, public market entries, and distress. We conclude by offering a modern governance playbook for Delaware corporations, emphasizing the importance of a carefully documented process in mitigating litigation risk and fulfilling the board’s fiduciary duties.
Major U.S. companies increasingly raise capital and achieve massive scale in the private market, but not everyone is allowed to buy private company shares. A fundamental question arises from this shift to private capital-raising: to what extent should retail investors have access to growing private markets? This symposium essay examines one aspect of this question through a case study of litigation challenging the Securities and Exchange Commission’s (SEC) “accredited investor” definition. This definition limits who can access prevalent private offerings. The litigation is sparse but suggestive. It reflects some plaintiffs’ willingness to reopen seemingly settled questions of administrative and constitutional law, often as part of a broader policy agenda.
This essay is part of the University of Chicago Business Law Review’s Symposium on “Rethinking Going Public: Innovation, Access, and Accountability in Modern Capital Markets.”
Featured Articles From The Online Edition
View AllThis article examines the fairness of new money financing in corporate restructuring through a comparative lens. It focuses on recent developments in the United Kingdom, where the Court of Appeal has incrementally adopted the American approach of benchmarking returns on exit financing to the financial markets. This is a welcome development, and promotes distributional fairness in the United Kingdom’s corporate restructuring regime. However, this article strikes a note of caution, arguing that robust judicial review is essential to prevent gamesmanship and manipulation of the process by sophisticated players.
This article examines Judge Mehta's remedies order in United States v. Google LLC and its implications for the future of Section 2 enforcement. It traces the evolution of antitrust remedies from the structural dissolutions of the early twentieth century through Microsoft, and argues that Google completes the transition elevating behavioral supervision from a second-best fallback into the dominant mode of market correction. The piece analyzes the court's decisions to decline structural relief, approve narrowly tailored data-sharing and syndication obligations, establish a Technical Committee, and extend remedial coverage to generative AI. It then evaluates the institutional consequences of this "behavioral antitrust realism," weighing its advantages in flexibility, consumer welfare preservation, and remedial fit against the risks of judicial drift into an open-ended regulatory role that antitrust law has historically sought to avoid.
This article examines the Sixth Circuit’s decision in NLRB v. Starbucks and its implications for the NLRB’s authority to award expanded “make-whole” remedies under Thryv. It explains how the court upheld the unfair labor practice finding but rejected broader compensation for “direct or foreseeable pecuniary harms,” deepening a circuit split over whether those remedies are valid equitable relief or impermissible consequential damages. The piece argues that, despite the Sixth Circuit’s narrower reading of Section 10(c), there is still room for carefully tailored Thryv-style remedies that restore workers without exceeding statutory or constitutional limits.
Private equity (PE) funds control over $9 trillion in assets and thousands of companies, yet their leverage-driven model often amplifies financial fragility and social harm. This article argues that the core tools of PE value creation—high leverage, cash extraction, and short-term exit incentives—externalize predictable risks to third parties including workers, healthcare patients, consumers, unsecured creditors, communities and the environment. Drawing on empirical studies, it identifies how debt-amplified fragility and profit-pressure dynamics can degrade quality, safety, and resilience particularly in sensitive sectors such as healthcare, energy, education, childcare and corrections. This article proposes a targeted regulatory framework to internalize these costs, including leverage-indexed insurance and bonding, minimum staffing and quality standards, and ownership-linked disclosure reforms focused on these sensitive sectors. These limited, pragmatic measures would preserve the benefits of the PE investment model while realigning incentives toward long-term stability and social welfare.