Volume 5.2

Summer

2026

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.”

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.

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.

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.

Modern corporate theory treats the corporation as the product of private ordering as rational parties bargain over risk, control, and returns, while corporate law supplies enabling defaults that track what those parties would have chosen anyway. This Comment considers that view by examining the medieval Venetian commenda, a commercially sophisticated investment form that emerged centuries before the modern corporation. The commenda was, and organized, a nexus of contracts, taking shape as investors and traveling merchants repeatedly structured ventures, standardizing governance, risk allocations, and agency. But the commenda’s ultimate collapse exposes a central weakness in contractarian theory. When Venice’s post-Serrata political settlement altered the institutional environment, the commenda unraveled not because its contractual architecture failed or the market shifted, but because the state withdrew the conditions that made those bargains viable. By tracing both the construction and the destruction of the commenda, this Comment argues that private ordering can explain the internal design of corporate forms but cannot explain their persistence or lack thereof. Corporate organization, even at its most contractarian, depends on an ongoing state concession, marking a boundary condition for the applicability of contractarianism.

Loyalty discounts can wear different hats: they may function as ordinary price competition or as de facto exclusivity. Courts generally apply cost-based screens under the predatory pricing doctrine when the alleged competitive harm comes from low prices. Loyalty discounts can also become de facto exclusive dealing when they impose switching penalties, lock up demand, or deny rivals the scale necessary to compete. Two-sided transaction platforms after Ohio v. American Express Co. further complicate the loyalty discount doctrine because output is produced only through simultaneous participation on both sides of a platform, and foreclosure on one side may also reduce rivals’ access to the matched transactions necessary to compete on the other side.

This Comment argues that the loyalty discount doctrine is not cleanly applicable in two-sided transaction platforms because traditional price-cost tests may not sufficiently capture exclusionary effects caused by single-homing, routing restraints, and “chicken-and-egg” barriers to entry. Additionally, the Comment proposes a three-step framework that combines cost-based screens, non-price exclusion, and Amex’s instruction that competitive effects in transaction platforms should be evaluated as a whole. Courts should first consider whether the defendant has sufficient market power to make foreclosure plausible. They should then identify the mechanism of exclusion. Specifically, if price is clearly the predominant mechanism, a price-cost screen should be applied; if the challenged arrangement instead functions as de facto exclusivity, a foreclosure-based exclusive-dealing framework would be the more appropriate test. Finally, once exclusion is established, courts should assess competitive effects at the platform level under Amex. This three-step approach upholds the error-cost logic of cost-based rules while allowing courts to identify profitable, above-cost exclusion in two-sided transaction platforms in which denial of scale and matched transactions, rather than profit sacrifice, is the core competitive harm.

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.