Resumen de Securities laws ‘facilitating’ private enforcement
La Porta, Lopez-de-Silanes, and Shleifer (J Financ 61:1–32, 2006) (LLS) have undertaken an empirical analysis, making a critical but somewhat provocative proposition that “securities laws ‘facilitating’ private enforcement, rather than providing for public enforcement, benefit the securities market.” After briefly providing a theoretical connection to the existing law and economics literature, I attempt to empirically advance this LLS proposition two-fold, particularly on the ‘joint use of regulation and the liability rule,’ by exploring the most meaningful word ‘facilitate’ therein. Firstly, I explore the cross-country LLS data associated with the specific case of an initial public offering to seek possibly more solid evidence on the facilitating effect. Secondly, motivated by LLS, I pursue a within-country positive analysis, regarding the major determinants of the joint use, but across overall harmful activities covered in the Korean Securities Law. The major tenet underscoring this second empirical exploration was the clear message from the existing theoretical literature that the joint use should be adopted in a selective manner even within a single substantive statute, because it usually governs vastly different harmful activities. Finally, I call for some essential research agenda, prior to approving the ineffectiveness of public enforcement claimed in the second part of the LLS proposition.
