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Are there any notable cases where securities law has conflicted with civil or commercial law?

Maurice Kulvear

There have indeed been notable cases where securities law has conflicted with civil or commercial law. These conflicts often arise due to differences in the goals and objectives of the different legal frameworks.

One example of such a conflict occurred in the United States in the early 2000s. In 2002, the Sarbanes-Oxley Act was enacted in response to several high-profile corporate accounting scandals, such as Enron and WorldCom. The Act imposed new regulations on corporations and increased penalties for corporate fraud.

However, these new regulations also conflicted with existing civil and commercial law in several ways. For example, Sarbanes-Oxley required that CEOs and CFOs certify the accuracy of financial statements, but this requirement conflicted with the corporate governance responsibilities of other members of the board of directors. Additionally, the increased penalties for fraud and other corporate misbehavior could conflict with civil law, which may not impose such severe punishments.

Another example of a conflict between securities law and civil and commercial law occurred in the aftermath of the 2008 financial crisis. In response to the widespread failures of banks and other financial institutions, governments around the world enacted new regulations to prevent similar crises from happening in the future.

However, these new regulations often conflicted with existing commercial and civil law. For example, regulations that required banks to hold more capital in reserve could conflict with laws governing the ability of banks to make loans. Additionally, regulations that required increased transparency could conflict with laws governing proprietary information and trade secrets.

Overall, the conflicts between securities law and civil and commercial law demonstrate the complexity and nuance of the legal system. While each legal framework has its own goals and objectives, they are often in tension with one another. Finding the right balance between these competing interests is a challenge that requires careful consideration and a deep understanding of the underlying legal principles.