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Regulatory Sloth and Activism in the Effervescence of Financial Crisis

Authors

  • NICHOLAS DORN

    Corresponding author
    1. Erasmus School of Law, Rotterdam, the Netherlands
      Nicholas Dorn, Criminology, Public Law, FRG EUR, Postbus 1738, 3000 DR Rotterdam, Netherlands. Fax: +31 10 408 9195; E-mails: dorn@law.eur.nl, nicholas.dorn@tiscali.co.uk.
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  • The author thanks two referees and the editors of this journal for comments, also his academic colleagues and interdisciplinary masters students in the course on global governance in the Erasmus School of Law, Rotterdam.

Nicholas Dorn, Criminology, Public Law, FRG EUR, Postbus 1738, 3000 DR Rotterdam, Netherlands. Fax: +31 10 408 9195; E-mails: dorn@law.eur.nl, nicholas.dorn@tiscali.co.uk.

Abstract

Certain financial market practices, previously denied or disregarded by financial market regulators, are being redefined as candidates for active investigation and enforcement. This article contrasts the passive stance of the U.S. Securities and Exchange Commission vis-à-vis the Madoff fraud with its relatively diligent but now settled Complaint against Goldman Sachs. The article also explores compromises in the EU's approach to market regulation of information asymmetry, suggesting that grounds for pessimism outweigh those for hope. The introduction sets the context, describing aspects of the first leg of the crisis (states bail out banks) and the second leg (states themselves come under strain).

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