Gerald Baylin Professor of Law
Areas of Expertise
Comparative Business Law
B.A., University of Notre Dame
M.A., Ph.D., University of Michigan
J.D., University of Pennsylvania Law School
Professor James Fanto, an expert on corporate finance and securities law, commented on decisions that have recently come out from U.S. Securities and Exchange Commission.
Professor James Fanto was quoted in an article in Investor’s Business Daily focusing on the separation of powers issue in the case of the recent blockage of Mayor Bloomberg’s proposed ban on supersized sugary drinks.
Professor James Fanto commented on rumors that Mary Jo White, partner at Debevoise & Plimpton LLP, may be appointed as the next chairman of the U.S. Securities and Exchange Commission. Professor Fanto, a strong proponent of greater Wall Street reform, argued that White’s appointment will only maintain the SEC’s current pattern of weak regulations on large corporations.
Professor James Fanto recently commented on the $75 million regulator settlement investment firm Edward Jones made with the Securities and Exchange Commission for allegedly failing to disclose conflicts of interest regarding investors.
Professor James Fanto spoke to Bloomberg News about the SEC’s 2005 push toward electronic trading, which has resulted in several high-profile technological lapses over the past few years. He explained that that shift has ultimately undermined the SEC’s power of oversight.
Professor James Fanto spoke recently with Corporate Secretary about the rising popularity of compliance officer jobs. He explained the shift: “Since the financial sector has been the object of federal reform (Dodd-Frank), the tasks of compliance officers in broker-dealers and investment advisers have grown significantly.”
Professor James Fanto commented to Bloomberg on the recent "pre-marketing" of Sino-Forest Corp. by Muddy Waters Research to various hedge funds. Although there is speculation that this move was fraudulent, Professor Fanto explains that there is nothing illegal in offering reporting to hedge funds before reporting to the public. "Muddy Waters can profit from this information itself, or allow others to profit from their insights as well," he said. "The only problems emerge when research is in fact based on insider tips. But that doesn't seem to be the case here."
Professor James Fanto commented on complex and leveraged exchange-traded funds (ETFs) in a recent Wall Street Journal article. Although many major brokerage firms sought to limit access to ETFs, nearly anyone with a brokerage account can purchase them. While many experts are calling for more regulation on the high-risk investments, Professor Fanto noted, "In the discount world, it's your own obligation."
Professor James Fanto discussed the most recent chapter of Facebook's many lawsuits with the Los Angeles Times on Tuesday. This year, Cameron and Tyler Winklevoss attempted to appeal their $65 million settlement with Mark Zuckerberg, arguing that the social networking giant did not reveal the true worth of the company. The 9th Circuit Court of Appeals however has rejected the Winklevoss' claims and maintained the current settlement. Professor James Fanto told the LA Times the case was unlikely to win from the beginning: "When you go in well-represented into a highly contentious situation, it's hard to make the case you were misled."
Three years after winning $160 million, Cameron and Tyler Winklevoss are seeking to overturn their settlement from Facebook, alleging the company lied about its true value. While many legal experts say they are likely to lose, the Winklevoss twins may potentially win $600 million for the idea they argue was stolen by Facebook owner Mark Zuckerberg. On the possibility of winning the case, Professor James Fanto told the Los Angeles Times, "You always have a shot; it's just a long shot. The courts are very reluctant to reopen settlements in the absence of significant fraud in the context of the settlement."
rofessor James Fanto was featured in a webcast on AdvisorOne to discuss the SEC's "Study on Investment Advisers and Broker-Dealers." Hosted by the Center on Financial Services Law at New York Law School and The Committee for the Fiduciary Standard, Professor Fanto spoke on the connection between registered investment advisor oversight and extending the fiduciary standard to brokers. He was joined by securities law experts from FINRA and some of New York's top law firms.
Professor James Fanto was one of five speakers at New York Law School's Center for Financial Sevices discussion "The SEC Study Regarding Oblications of Brokers, Dealers, and Investment Advisers: What Does It Mean for Investors, Firms, Brokers, and Advisers?" The interactive discussion explored the affects of the SEC's study on extending the fiduciary standard on financial advisors. Fanto was the only professor to speak among a prestigious group of colleagues on a panel hosted by Tara Bernard Siegel, personal finance reporter for The New York Times.
Three technology company employees were arrested recently for allegedly selling the corporate secrets of Apple, Dell, and Advanced Micro Devices. Lawyers are also looking to prosecute the hedge funds that hired the consultants. Concerning the culpability of the various hedge funds involved, Professor James Fanto spoke to Bloomberg: "Few hedge fund managers have the investment skill to deliver the benefits that they promise. They have to find an edge however they can--in this case through the expert networks."
Three years after their $68 million settlement with Facebook CEO Mark Zuckerberg, Cameron and Tyler Winklevoss now accuse Zuckerberg of securities fraud, alleging that he hid the true value of the company during negotiations. Professor James Fanto, an expert in securities, discussed the issue with E-Commerce Times: “There is almost no possibility of criminal charges here, and the securities fraud claim is probably a reach as well.”
Angelo Mozilo, former CEO of Countrywide Financial, and two of his top lieutenants have settled civil securities fraud charges filed against them by the SEC. The settlement includes over $67 million in penalties and reparations, but does not require Mozilo to admit any fault. However, Professor James Fanto, speaking to The New York Times, explains that the defendant was sufficiently punished. "Mozilo is agreeing to a permanent ban on serving as an officer or director of a public company," he said. "This is a significant punishment and does not look good for his legacy."
Judge Laura Taylor Swain, District Judge for the United States District Court for the Southern District of New York cited Professors James Fanto and Norman Poser’s case book, Broker-Dealer Law and Regulation (4 ed. 2009) on March 29, 2010 in her opinion in the case of Wachovia Bank N.A. v. VCG Special Opportunities Master Fund, Ltd.
Now that Bernie Madoff has pleaded guilty to defrauding investors of $65 billion, law enforcement agencies are trying to understand how such an enormous Ponzi scheme existed without suspicion for so long. The Securities and Exchange Act includes a section requiring “an itemized daily record of all purchases and sales of securities”—information missing from Madoff’s records. Professor James Fanto, an expert of corporate and securities law, spoke to the Securities Technology Monitor about how companies must comply to these rules and the methods of regulation by the SEC.