Investor Protection Seminar LW5410.04 Course SyllabusOutline A

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					                                    Investor Protection Seminar
                                             LW5410.04
                                      Course Syllabus/Outline


A.           COURSE INSTRUCTORS:

             Edward Waitzer                          Poonam Puri
             416-869-5587                            416-736-5542
             ewaitzer@osgoode.yorku.ca               ppuri@osgoode.yorku.ca



B.           SEMINAR OBJECTIVES AND EXPECTATIONS

       It is recognized that a country’s level of investor1 protection has a substantial
effect on the effectiveness of markets in serving the needs of retail and other
investors, the value of firms, the development of markets and economic growth.
Law (both in its administration and in the development of public policy) and the
media each play key and co-dependent roles in advancing investor protection, the
attainment of which often presents challenging public policy choices and political
trade-offs. The most recent financial crisis has highlighted the challenges in
achieving effective investor protection and the critical role of the media in the
process.

       This advanced seminar, engaging both senior year law students and financial
journalists, is intended to provide an opportunity to actively explore this
intersection of law, business and public policy through sustained study and
dialogue between students, journalists and leading practitioners in the field. The
seminar combines a series of “foundational seminars” and case study/workshop
presentations, through which we hope to provide an opportunity for students,
journalists and practitioners to interact together and engage in active and
collaborative learning.      The interaction between students, journalists and
practitioners will, hopefully, lead to a deeper understanding on the part of all of the
challenges in achieving regulatory objectives in this area.

      The first four weeks of the seminar will be led by Professors Puri and
Waitzer, along with Jacquie McNish (Globe and Mail) and Ilana Singer (Canadian
Foundation for the Advancement of Investor Rights). All four will participate
throughout the seminar. The balance of the sessions will be dedicated to student-led
presentations. Students will organize themselves into groups of two or three and
choose a topic for presentation (from the list attached, or otherwise), to be agreed
upon with Professors Puri and Waitzer, who will assist students in contacting
leading practitioners who can assist with their presentation.


1 References to “investor(s)” include both direct shareholders and those who invest indirectly through financial

intermediaries.



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C.           Location

       All classes will be held at the offices of Stikeman Elliott (199 Bay Street, 51st
Floor, Commerce Court West – at King Street subway station) on Wednesday
evenings from 6:30-9:30 p.m. Dinner will be served.

D.           Student Evaluation

       Course evaluation (for students only) will be based on class participation
(15%), class presentation (25%) and a paper (60%). The paper must be 25-30 pages
(double-spaced) and must involve additional research beyond the reading materials
assigned for the course. Students who elect to complete the Upper Year Writing
Requirement in this seminar must advise the instructors in writing and also fulfil
any additional obligations associated with it. The topic for each student’s paper
must be approved by Professors Puri and Waitzer during the course of the term and
all papers are due on the first day of exams.

       Students will be expected to actively participate in all sessions (i.e., not just
that in which they are presenting). Laptops are permitted but only for purposes
directly related to the seminar.

       Participating journalists are also expected to fully participate, although they
will not be graded (nor receive academic credit).

        Guest practitioners will be asked to assist students in their presentation and
help ensure their ability to gain a practical understanding of their subject matter. It
is not expected that they will assume primary carriage for presenting at the seminar.

       The readings listed below are provisional and will be updated and edited
closer to the beginning of the seminar. All reading materials will be posted to a
dedicated website, accessible only to seminar participants.

E.           FOUNDATIONAL SEMINARS (two topics to be covered each evening)

             Session 1:   Achieving the Appropriate Level of Investor Protection

                    •     International Organization of Securities Commissions and
                          Organizations (IOSCO), Objectives and Principles of Securities
                          Regulation (May 2003)
                    •     R. La Porta, F. Lopez – de-Silanes, A. Shleifer and R. Vishny,
                          “Investor Protection and Corporate Governance”
                    •     L. Bebchuk and Z. Neeman, Investor Protection and Interest
                          Group Politics (2007)




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                    •       Speech by Sheila Nicoll, Director of the Conduct Policy Division
                            at the UK Financial Services Authority (November 2009)
                    http://www.fsa.gov.uk/pages/Library/Communication/Speeches/2009/1118_sn.shtml
                    •       Elizabeth Warren, “Unsafe at Any Rate” (Summer 2007)
                    http://www.democracyjournal.org/article.php?ID=6528
                    •       Lee, Kwangwook, “Investor Protection in European Union: Post
                            FSAP Directives and MiFID” (February 7, 2009)
                    http://ssrn.com/abstract=1339305
                    •       Barbara Black, “Are Retail Investors Better Off Today?”
                            (January 15, 2008)
                    http://ssrn.com/abstract=1085744
             Session 2:     Issues and Instruments

                    •       M. Roe, The Institutions of Corporate Governance (2004)
                    •       R. Morck and B. Yeung, Some Obstacles to Good Corporate
                            Governance in Canada and How to Overcome Them (2006)
             Session 3:     Fiduciary Duties; Regulating the Exercise of Power by
                            Controlling Shareholders and by Financial Professionals

                    •       Re: Canadian Tire (1987), 10 OSCB 857, Affirmed by Divisional
                            Court (1987), 10 OSCB 1771
                    •       Re: Standard Trustco Ltd. (1992) 15 OSCB 4322
                    •       Peoples Department Stores Inc. (Trustee of) v. Wise, [2004] 4
                            S.C.R. 461, 2004 SCC 68
                    •       BCE Inc. v. 1976 Debentureholders [2008] S.C. J. No. 37., SCC 69.
                    •       Tamar Frankel, “Trust Me!” Sales talk, advice, and financial
                            planning,” (August 25, 2009)
                    http://blogs.reuters.com/great-debate/tag/breach-of-fiduciary-duty/
             Session 4:     Shareholder/Investor Rights

                    •       L.A. Bebchuck, The Myth of the Shareholder Franchise, (2006)
                    •       B. Black, Agents Watching Agents: The Promise of Institutional
                            Investor Voice, 39 UCLA L.Rev. 811 (1991-92)
                    •       CCGG 2008 Annual Report and 2009/10 Operational Plan
                    •       E. James Gifford, Effective shareholder engagement: the factors
                            that contribute to shareholder salience (unpublished draft)




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                    •      John C. Bogle, The Fiduciary Principle: “No Man Can Serve
                           Two Masters” (April 1, 2009)
             Session 5:    Shareholder/Investor Remedies

                    •      Kerr v. Danier Leather Inc., 2007 SCC 44
                    •      Farrar and Boule, “Minority Shareholder Remedies – Shifting
                           Dispute Resolution Paradigms” (2006)
                    •      Alicia Davis Evans, “The Investor Compensation Fund,” (2007)
                    •      IMAX Certification and Leave decisions (December 14, 2009)
                    •      S. Ben-Ishai and P. Puri, The Canadian Oppression Remedy
                           Judicially Considered: 1995-2001, (2004) Queen’s Law Journal,
                           Vol. 30. pp. 79-113
             Session 6:    Enforcement

                    •      H. Jackson, Regulatory Intensity in the Regulation of Capital
                           Markets: A Preliminary Comparison of Canadian and U.S.
                           Approaches (2006)
                    •      The Financial Services Authority, Principles-based Regulation:
                           Focussing on the Outcomes that Matter (April 2007)
                    •      Nicholls, Civil Enforcement in Canadian Securities Law
                           (October 1, 2009). Journal of Corporate Law Studies, Vol. 9, No.
                           2, pp. 367-408, October 2009.            Available at SSRN:
                           http://ssrn.com/abstract=1417875.
                    •      P. Puri, “A Model for Common Enforcement in Canada: The
                           Canadian Capital Markets Enforcement Agency and the
                           Canadian Hearing Tribunal” (2009), Expert Panel on Securities
                           Regulation
             Session 7:    Disclosure and Reporting Standards

                    •      ASIC v. Macdonald 9 (no.11) – case note
                    •      Hercules Management Ltd. v. Ernst & Young [1997] 2 S.C.R. 165
                    •      Canadian Foundation for Advancement of Investor Rights,
                           Heads You Lose, Tails You Lose: The Strange Case of Leveraged
                           EIFs (May 2009)
                    http://faircanada.ca/wp-content/uploads/2008/12/etfs-may-14pm-etf-sw-final-
                    final1.pdf




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                    •      Canadian Foundation for Advancement of Investor Rights, The
                           Strange Case of Leveraged and Inverse EIFs, Part 2: A Few
                           Steps Forward – Much Remains to be Done (July 2009)
                    http://faircanada.ca/wp-content/uploads/2009/07/ETF-Update-FINAL-July-13.pdf
             Session 8:    Role of the Media

                    •      A. Dyck and L. Zingales, Corporate Governance Role of the
                           Media (November 2002)

F.           WORKSHOP TOPICS

             Students will choose to prepare a paper/presentation on one of the topics
             listed below (or another agreed upon subject) and, with guidance from the
             seminar instructors, will assume responsibility for leading a class discussion
             on the subject. In addition, guest practitioners will be invited to mentor
             students and participate in the seminar to share their experience and learning
             from specific transactions/situations to be addressed. Student papers will be
             based on same issues addressed in their seminar presentations.

             (1)    Role of Shareholders in Approving Major Transactions – a review of
                    the policy behind shareholder approval requirements and how they
                    work in practice
                    •      Inco Poison Pill/Special Dividend
                    •      Goldcorp/Glamis combination
             (2)    Shareholder Voting and Proxy Fights – an examination of the policies
                    and infrastructure underlying shareholder voting and how they work
                    in practice
                    •      Shareholder proposals
                    •      Biovail proxy fight
             (3)    Protecting Shareholders in CCAA – an examination of how
                    shareholders fare in restructuring proceedings and who looks after
                    their interests
                    •      Stelco
                    •      Air Canada
                    •      Silcorp
             (4)    Regulating Suitability – an examination of regulatory approaches to
                    suitability requirements
                    •      ABCP case study (and comparison to U.S. auction rate
                           preferreds)



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             (5)    Challenges to Regulatory Reform – an examination of the challenges to
                    achieving meaningful regulatory reform
                    •      Review of “point of sale disclosure” project in Canada
                    •      Regulation of shareholder communications
             (6)    Self-Regulation – what is the role and limits of self-regulation?
                    •      Accounting standard setting in Canada and the U.S.
                    •      Evolution of the IDA, RS, MFDA and IIROC
                    •      Relationship between self-regulatory bodies and overseeing
                           regulatory agencies
             (7)    When Brokers go Bad – review of remedies available to retail investors
                    where there is broker misconduct
                    •      Utility of consumer complaints, ombudsman, arbitration, civil
                           litigation
                    •      BC enforcement action against Ian Thom
             (8)    Utility of Shareholder Remedies – examination (through case law) of
                    the utility of various shareholder remedies
             (9)    Class Action/Contingency Litigation
                    •      J. Percival, Statutory Civil Liability and Securities Class Actions:
                           Balanced Antidote to the Excess in the Enron Era (Chpt. 8 in
                           Puri and Larsen)
             (10)   Role of Gatekeepers
                    •      B. Fish, Pointing the Finger at Professionals: The
                           Responsibilities of Lawyers and Other Gatekeepers for
                           Corporate Governance Failures (Chpt. 3 in Puri and Larsen)
             (11)   Investor Education – examining the role and utility of investor
                    education (and the extent to which it becomes a politically convenient
                    substitute for regulatory intervention)
             (12)   Executive Compensation – examining historic efforts to regulate,
                    moderate or achieve transparency of executive compensation (and
                    why it’s so challenging to do so)
             (13)   Enforcement Case Studies
                    •      Black/Hollinger International
                    •      Madoff
             (14)   Fiduciary Standards for Financial Professionals




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             (15)   Merits of a Consumer Financial Protection Agency
             (16)   Regulation of Complex Financial Products
G.           OSGOODE and YORK ACADEMIC POLICIES

             a) Academic Honesty and Integrity

             Osgoode students are required to maintain high standards of academic
             integrity and are subject to the York Senate Policy on Academic Honesty and
             the relevant Osgoode Academic Rules. The Senate Policy can be found at
             http://www.yorku.ca/secreatirat/policies/document.php?document=69.
             The York University academic integrity website can be found at
             http://www.yorku.ca/academicintegrity.

             The Senate Policy and Osgoode Academic Rules are also found in the Student
             Handbook, which is available on the myosgoode website.

             b) Religious Observance

             York University is committee to respecting the religious beliefs and practices
             of all members of the community, and making accommodations for
             observances of special significance to adherents. Should any of the dates
             relating to examinations or assignments for this course pose such a conflict
             for you, please let me know within the first three weeks of class. Please note
             that to arrange an alternative date or time for an examination scheduled in
             the formal examination periods, students must complete an Examination
             Accommodation Form, which can be obtained from the Office of Student
             Services at Osgoode Hall Law School.

             c) Students with Disabilities

             York University has a range of resources to assist students with physical,
             mental, psychiatric and learning disabilities in achieving their educational
             objectives. Students with disabilities requiring accommodation in the
             classroom or in the examination or evaluation process are encouraged to
             identify themselves to York’s Counselling & Disability Services office (N110,
             Bennett Centre for Student Services or 416-736-5297) or Osgoode’s Office of
             Student Services as soon as possible. All requests for accommodation will be
             kept confidential.    Request for examination accommodation must be
             approved by the Acting Assistant Dean (Student Services), Nancy Sperling.

             d) Other York University Policies

             Further information concerning relevant York University academic policies,
             such as the Ethics Review Process for research involving human rights
             participants is available on the Senate Committee on Curriculum & Academic


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             Standards  webpage     (see    Reports,    Initiatives, Documents)     –
             http://www.yorku.ca/secretariat/senate_cte_main_pages/ccas.htm.




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