Prerequisite: One of the following courses is required as a prerequisite: Bankruptcy, Corporate Finance, Corporations, Securities Regulation, or Taxation
Exam type: Last-class take-home exam.
Grading will be based 50% on a short research paper (5-15 pages) and 50% upon a Last-Class Take-Home exam.
This class will introduce hedge funds from the practitioner's perspective, and discuss the foundational issues of corporate, securities, and tax law that they raise. The first part of the class will examine hedge funds' internal structure and the main regulatory issues relating to their organization, particularly in tax and securities law. The second part of the class will survey core legal relationships between hedge funds and their investors, beneficiaries, and counterparties, and among the management team. The third part of the class will scrutinize legal issues raised by particular investment strategies such as activist or distressed debt investment, with particular attention to the role of internal and external counsel. The fourth part will conclude with a macro perspective on hedge funds, including financial stability.
Through reading materials, course discussions, and guest lectures, students will gain insight into the perspective of fund managers, advisors to these managers and their funds, investors in such funds, those who transact with such funds, and those who regulate the fund industry. One theme that will emerge is that hedge fund strategies are at the center of many of the most pressing current issues in financial law. As the proverbial "smart money" in the market, hedge funds undergird market efficiency, but also continually attempt to exploit loopholes in the current regulatory and tax regime. They thereby expose the fault lines of the current regulatory and tax structure, which the course will reexamine. Sessions will be a mix of lectures and class discussions, and a number of sessions will feature guests with particular industry expertise.
Note: Two class meetings will be cancelled and two others will be extended to 9pm in order to make up the necessary class time. The cancelled class sessions are as follows: Thursday, March 9 and 23. The following class sessions will meet from 5pm to 9pm: Thursday, February 9 and April 6.