Paul G. Mahoney - Wasting a Crisis: Why Securities Regulation Fails

I owe many intellectual debts. George Priest first exposed me to law and economics as a student during the early 1980s, a time of great ferment in the field, and encouraged me to think about an academic career. I had the extraordinary privilege of clerking for Judge Ralph Winter, one of the pioneers of the economic analysis of corporate law. Ralphs example and our many deeply substantive conversations convinced me to focus on corporate and securities law. He is everything one could ask for in a teacher, employer, friend, mentor, and role model.

Also in the early 1980s, Frank Easterbrook and Dan Fischel wrote a series of articles that set the agenda for corporate and securities law scholarship for that decade and beyond. Those articles formed the basis for their book The Economic Structure of Corporate Law (1991), published just as I began my academic career. At about the same time, Roberta Romano pioneered the use of empirical methods in the legal literature on corporate and securities law, bringing legal scholars into conversations that had previously taken place almost exclusively among financial economists. These three scholars had a deep influence on my own agenda and methodology. Ive been fortunate to get to know each, and each commented on parts of this book. Roberta read the entire manuscript and has my particular thanks.

Parts of , Guolin Jiang. These chapters contain what I regard as some of the most important empirical results in the book. Jianping and Guolin deserve an equal part of any credit that is due. Im grateful to them for allowing me to include our joint work here.

Ive been fortunate to have an extraordinarily supportive and intellectually demanding group of colleagues at the University of Virginia, where Ive spent my entire academic career. Countless conversations with current and former corporate and securities law colleagues Barry Adler, Ian Ayres, Michal Barzuza, Albert Choi, Quinn Curtis, Mike Dooley, George Geis, John Harrison, Ed Kitch, Kevin Kordana, Saul Levmore, John Morley, George Triantis, and Andy Vollmer shaped the ideas contained in the book, and most of them commented extensively on one or more parts of it. My three most recent predecessors as dean, Tom Jackson, Bob Scott, and John Jeffries, were unfailingly helpful and encouraging.

Colleagues from other disciplines, some within the Law School and many in other parts of the University of Virginia, helped me anticipate substantive or methodological criticisms from their fields. Historians Barry Cushman, Chuck McCurdy, and Ted White, economists Yiorgos Allayannis, Bob Bruner, Robert Conroy, Ken Eades, Leora Friedberg, Bob Harris, and John James, and John OBrien, an expert in eighteenth-century British literature, all gave generously of their time.

The University of Virginia Law Library was a partner throughout, doggedly tracking down sources and in general upholding its reputation as the best law school library in the nation. Special thanks go to Cathy Palombi, who spent many hours on the telephone persuading other libraries to lend us archival material and carefully tending it while in our custody, and to Kent Olson, who helped me navigate the early twentieth-century financial press.

An army of research assistants worked on the various parts of the book, often meticulously entering or verifying data from microfilmed newspapers or, in more recent years, from online archives. They also carefully read contemporary accounts of market, legislative, and regulatory developments. Im very grateful to Kelly Baker, Daniel Barden, Travis Batty, Julie Bentz, Katherine Beury, Lindsay Bird, Nick Bluhm, Federico Botta, Rebecca Brown, Andrew Brownstein, Theresa Clark, Adrienne Davis, Ryan Davis, Matt Einbinder, Padraic Fennelly, Will Gould, Sangyean Hwang, Kelly King, David Luce, Matt Middleton, Jennifer Mink, Noah Mink, Kimberly Paschall, Thomas Pearce, Anna Shearer, Kris Shepard, Angela Sinkovits, and Jacky Werman for all their help.

I received incisive and helpful comments on parts of the book from Franklin Allen, George Benston, Mary Anne Case, Jill Fisch, Stuart Gilson, Bruce Johnsen, Reinier Kraakman, Randall Kroszner, Ed McCaffery, Alan Meese, Geoff Miller, Eric Orts, Eric Posner, Bill Schwert, Andrei Shleifer, Jeff Strnad, Steve Thel, Bill Williams, Guojun Wu, Chunsheng Zhou, and several anonymous referees. Mark Weinstein went far beyond the call of duty, not only commenting extensively on the chapter relating to market manipulation in the 1920s, but spending many hours helping me think through the data and methodological challenges that the work raised. The individual chapters also benefited greatly from comments received at workshops and seminars at the law and/or business schools at the University of California at Berkeley, the University of Chicago, George Mason University, Harvard University, New York University, the University of Pennsylvania, the University of Southern California, Stanford University, the University of Toronto, Vanderbilt University, the College of William & Mary, and Yale University, and the economic history seminar at the University of Virginia.

My editors at the University of Chicago Press made a new experience entirely enjoyable. Im very grateful to Chris Rhodes and Jillian Tsui for their advice, encouragement, and assistance.

My greatest debt is to my colleague and spouse, Julia Mahoney, who read the manuscript in multiple incarnations and provided patient guidance throughout.