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The Merits Still Matter: A Rejoinder to Professor Grundfest's Comment, Why Disimply?

Document Type

Article

Language

English (en)

Publication Date

1995

Publication Title

Harvard Law Review

Abstract

In last month's Harvard Law Review, I agreed with an earlier article by Professor Joseph Grundfest that the SEC possesses the power, at least prospectively, to disimply private rights of action by rescinding entire rules. I urged, however, that the real issue is not the mechanics of how disimplication might occur, but whether such disimplication would be wise. On this point, Professor Grundfest earlier had been silent. Professor Grundfest's Comment, Why Disimply?, in contrast to his earlier silence, helps to frame the issues regarding whether there is a federal securities class action crisis. He generally eschews advancing the types of claims that proponents of restrictive new legislation had earlier propounded to Congress. For example, he does not follow some in arguing that "securities litigation has gotten out of hand and is destroying the very capital formation process it seeks to promote." Instead, he makes the valid point that to measure the impact of litigation on capital formation, we need a theoretical benchmark. I agree, but the point of my Comment had been the narrower one of arguing that proponents of new legislation had not met their burden of showing the need for such legislation. To put matters simply, the burden of proponents of change is to prove their case.

Keywords

Disimplication, SEC, Securities and Exchange Commission, Private Rights of Action

Publication Citation

Joel Seligman. The Merits Still Matter: A Rejoinder to Professor Grundfest's Comment, Why Disimply? 108 Harv. L. Rev. 749 (1995)

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