Author Archive


It has been a great week co-guest blogging here, and thanks to Walter Olson for making it happen and to my co-guest blogger James Maxeiner.  And if I can intra-cross-post, James’s piece on self funding legal aid might be useful for those commenting on my opossum piece; perhaps some form of Germany’s plan for cases against municipalities?  In particular, judges could assess at an early stage meritorious but low-damages cases and assign fees accordingly, and non-meritorious cases can be dealt with earlier.

Anyway, my last post for the week covers the SEC’s proposed new rule reversing the general prohibition on advertising for certain unregistered offerings, such as those under Rule 506.  This was required by the new JOBS act, but it will be interesting to see if it has the effect of allowing more “accredited investors” (basically, people able to afford the risk of buying offerings that are not registered) into this market.  Because over the last couple of years, FINRA, the self-regulating organization that regulates the brokerage industry, has been cracking down on such sales where it believes fraud occurred and imposing more regulations on the brokers who sell such offerings, thus giving them a strong disincentive to look for and sell these offerings.

Have a great Labor Day weekend!

This guy isn’t playing dead for the police.

 A man and his 12-year old son arrested in California for killing an opossum on their property with a shovel can sue the police for false arrest.  The federal district court threw out their claims, but were revived by the 9th Circuit.  As reported, the court held that the officers could have had no probable cause for an arrest given that killing an opossum under those circumstances was not illegal.

 Not sure why this needed to go to the 9th Circuit, and now a further court case on the merits is in the wings.  Our tax dollars, working again.

More here:

EPA, 0; Federalism, 1



Pollutants in the air of state 1 travel downwind and pollute the air of state 2.  How do we solve that problem?  The Clean Air Act sets up a federal system in which the federal government sets up national air-quality standards, with the states left to implement those standards.  In particular, “upwind” states – who generate the bulk of the nation’s power, have to be responsible for their own emissions, lest they pollute the “downwind” states unduly.  The EPA, that engine of a massive rules-emitting machine, believes it gets to have the final, and full, say.  But the DC Circuit disagreed.  The EPA issued rules that not only enforced upwind state’s federally-mandated standards, but the rules also would require upwind states to care of pollutants that came from other upwind states.  As Judge Kavanaugh stated,

“Absent a claim of constitutional authority (and there is none here), executive agencies may exercise only the authority conferred by statute, and agencies may not transgress statutory limits on that authority.”

A principle worth remembering, in areas well beyond environmental regulation.

The opinion can be found here:$file/11-1302-1390314.pdf

Caveat Craigslist

Whatever happened to buy beware?  A Massachusetts state judge and former state senator  is faced with criminal charges for failing to note the crib she sold via Craiglist lacked a vibrating baby pad.  As reported in the Boston Herald:

“Former state Sen. Cheryl Ann Jacques is due to appear in Newton District Court tomorrow to be arraigned on a misdemeanor charge of larceny by false pretense brought by a pregnant woman who claims Jacques sold her an incomplete baby’s Pack ’n Play Playard on Craigslist.”

This despite the fact that Jacques apparently refunded the purchaser the money and the buyer came to the house to look at the crib before it was purchased.  Jacques could face up to a year in jail and a $300 fine for the charge of larceny-by-false-pretenses.




Unintended Consequences in Financial Regulation

As I am a great fan of Walter’s book on legal education (subscription required, alas), I am very excited to be co-guest blogging with James Maxienier.


Unlike Walter or James, I am not an academic.  My background is as a lawyer in financial services, first as a regulator and in-house, and now in private practice. In my spare time I’m editor of an online book review, the University Bookman, which covers law and other subjects.


The financial system is an exceedingly complex set of relationships and legal obligations. It is also very highly regulated – some op-eds to the contrary – but sometimes so highly regulated that unintended consequences sometimes trumps the regulatory scheme. A recent example:  Knight, a brokerage firm recently caught, through apparent computer programing errors, with a loss of over $400 million earlier this month.  But the error may have been exacerbated by rules enacted in the wake of the last computer programming error, the so-called “flash crash” in 2010.  As reported in the Wall Street Journal

“Desperate to keep the company afloat, Knight Capital CEO Thomas Joyce spoke with SEC Chairman Mary Schapiro Wednesday about having its erroneous trades cancelled. Citing SEC rules, Schapiro effectively turned him down, according to a person familiar with the agency.”

This week I hope to explore some of examples of regulation – in the financial services area primarily, but not exclusively – where the rules don’t seem to work as intended, as well as anything else I think you may find of interest.