Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/244698 
Authors: 
Year of Publication: 
2021
Series/Report no.: 
LawFin Working Paper No. 18
Publisher: 
Goethe University, Center for Advanced Studies on the Foundations of Law and Finance (LawFin), Frankfurt a. M.
Abstract: 
This paper argues that the key mechanisms protecting retail investors' financial stake in their portfolio investments are indirect. They do not rely on actions by the investors or by any private actor directly charged with looking after investors' interests. Rather, they are provided by the ecosystem that investors (are legally forced to) inhabit, as a byproduct of the mostly self-interested, mutually and legally constrained behavior of third parties without a mandate to help the investors (e.g., speculators, activists). This elucidates key rules, resolves the mandatory vs. enabling tension in corporate/securities law, and exposes passive investing's fragile reliance on others' trading.
Subjects: 
Investor Protection
Index Funds
Market Efficiency
Activism
Activist Hedge Fund
Private Equity
Plaintiff Lawyers
Contractarian Model of Corporate Law
Mandatory Law
JEL: 
G34
G38
K22
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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