Seeking Sunlight in Santa Fe\u27s Shadow: The SEC\u27s Pursuit of Managerial Accountability

My aim in this paper is not to justify at length an expansive new corporation law perspective, though I do believe in it. Nor do I want to try to resolve a controversial question that the new learning admittedly leaves open: which jurisdictional body should set the disclosure and antifraud standards insofar as they are designed to promote better corporate governance? To say that corporate and securities law are largely unitary does not necessarily mean that centralization of authority in the Securities and Exchange Commission (SEC or Commission) is the right choice. Perhaps the states, foreign countries, or stock exchanges would do better, justifying a narrow scope to federal securities law. I happen to favor centralization, but will not seek to justify that preference here, either. Instead, I want to focus largely on the question of strategic behavior by the SEC. Assuming that the Commission desires relatively free reign to pursue corporate accountability, how, within its current statutory authority, does it act in so doing? How can it best enlist the cooperation of other actors whose influence in this area is also important? In other words, how can it leverage its authority in order to maximize its influence, given whatever limitations in authority and resources might exist