Graduate Program in Financial Services Law
Banking Law and Regulation (LAW 828)
This course examines the legal and regulatory framework applicable to U.S. banking organizations, which includes bank holding company systems, federally and state-chartered banks and savings and loans. The course will introduce basic statutory and regulatory concepts and explore the goals of these laws and regulations. Topics will include a review of regulatory capital requirements, regulations pertaining to lending activities, issues involving risk management and foreign banking operations in the U.S. The impact of recent legislative and regulatory changes with respect to securities and insurance activities of U.S. banking organization will also be examined. A survey of bank regulatory structures for countries in Europe and Asia will also be featured.
Capital Markets II (LAW 811)
This course provides an overview of the capital and risk hedging markets in the United States from a "business" point of view. The interrelationships between the various exchanges, the OTC, and informal markets are examined, particularly in their capacity as forums for the trading in securities (equities and debt), futures, options, options on futures, forwards and similar instruments. The course focuses principally on the regulations of markets and the economic forces which underpin such regulation. Attention is given to the international markets. As prerequisites, students must have already completed Courses 800, 805, 806 and 808 or been waived from these courses.
This course provides a foundation in the U.S. debt markets and the funds transfer markets. The course covers the basics of debt, including the documentation and intercreditor issues of loans, security and guarantees. Both public and private debt is examined, including instruments and products of the US Treasury and other US government agencies, municipal bonds, corporate debt, commercial paper, certificates of deposit, leveraged leasing, factoring, repos, asset-based securitizations, reverses and swaps. The study of the funds transfer markets includes the Federal Reserve system, the discount window, Federal Funds and wire and other electronic funds transfer systems. Completion of this course is a prerequisite for FS 809: Capital Markets II.
Commercial Banking (LAW 803)
This course provides an introduction to the economics, operation, and regulation of commercial banking. Basic materials include an overview of how banks manage their risks, including both interest rate risks and credit risks, and also how banks earn profits. The formation of national associations and Illinois banks are covered as is the analysis of the rules and regulations which affect their operation. Particular attention is given to special reporting requirements to regulators. In addition, federal and state regulation of bank holding companies is examined. This course or its waiver is a prerequisite for course 820.
The course examines the current markets in various derivatives products and the business and legal issues concerning them. Included are swaps and other OTC products and the valuation, accounting and regulatory problems which have arisen.
Curricular Practical Training (LAW 823)
Includes one-quarter/semester internships and multi-quarter/semester co-ops, as defined and limited by Department of Homeland Security visa regulations and the rules of IIT’s International Office. Work must relate to program of academic study. Approval of the director must be obtained on appropriate forms before work begins. Limited to foreign students.
Enforcement and Litigation (LAW 829)
This course provides a comprehensive review of enforcement of the securities and commodities laws and regulations by the SEC, CFTC, Department of Justice, states, and self-regulatory organizations. The course also covers jurisdiction and procedures of the various forums for resolution of securities and commodities disputes including applicable law, customer litigation, class actions, and international litigation.
This course provides a comprehensive review of enforcement of the securities and commodities laws and regulations by the Department of Justice, the SEC, the CFTC, states and self-regulatory organization. The course also covers jurisdiction and procedures of the various forums for resolution of securities and commodities disputes and customer litigation, the remedies and defenses available in the various forums, class actions, and international litigation and arbitration.
Financial Services Holding Companies (LAW 815)
This course provides an overview of the rapidly evolving field of holding company law. Major themes include why and how holding companies are regulated and the regulatory reform process. Emphasis is placed on the dynamics of holding company regulation, including the tension between economic forces seeking to create a seamless financial services industry and the impulse of regulators and others to segregate activities by type of institution. Origins, trends in interpretation and proposals for legislative change of the Federal Bank Holding Company and Savings and Loan Holding Company Acts, the successor federal banking law to the Glass-Steagall Act, and the Insurance Holding Company Systems Regulatory Acts are examined and compared.
Financial Services Products (LAW 812)
This course serves as a summation to the Graduate Program in Financial Services Law through an analysis of representative types of major financial products offered by various financial services entities. Many classes are presentations given by attorneys who helped create the various products. Each guest is asked to examine the significant legal, tax and market characteristics of the product. Consideration will be given to how these characteristics and the relevant regulatory mechanisms affect product design, delivery systems, and interchangeability of purpose, and how they respond to consumer needs. Products are selected from among: stocks, bonds, commodities, options, cash management accounts, mutual funds, life insurance, annuities, home equity loans, certificates of deposit, credit card operations, and similar products. This course should be taken after the student has obtained a broad background from other courses in the Program.
Futures Regulation (LAW 802)
This course will examine the history of the commodities industry and the Commodities Exchange Act as amended. It will also discuss the operations and duties of the CFTC, the NFA, and the commodities exchanges, including their enforcement and investigatory activities, their structure and their current and proposed regulations; the use of the futures markets by hedgers; the jurisdiction of the CFTC versus the SEC and the states; the registration requirements of various entities with the CFTC; arbitration and reparation procedures; the types of records and reports used by the commodities industry; tax consequences for investors; forum-shopping and litigation strategies; and how to prepare a commodities case.
Individual research under the direction of a member of the faculty. A paper suitable for publication is required. LAW 822, a required course for students seeking the LL.M. degree, is intended to provide students with a rich academic experience by challenging them to engage in a largely self-directed research and writing project to produce a paper of publishable quality relevant to the field of financial services law. Students must interact with the supervising faculty member throughout the semester, submitting outlines, drafts, and revisions before submitting the final paper. Students are expected to complete LAW 822 within one semester. If they fail to do that, they must register for the course again and pay tuition for a second semester. (Prerequisites: Instructor's and Director's consent)
Insolvency and Reorganizations (LAW 814)
This course examines basic and advanced problems of insolvency, liquidation and reorganization proceedings involving banks, insurance companies, pension funds, brokerage firms, commodities firms, and other financial institutions and their customers. Particular emphasis is placed on the role of the SEC, CFTC, Comptroller of the Currency, and state regulators in liquidations and reorganizations of financial institutions. In addition, the roles of the FDIC, SIPC, and other insurers are stressed. Obligations of reinsurers and of guaranty funds are also considered.
Insurance Organizations and Business (LAW 806)
This course provides an introduction to the different forms of insurance organizations, governance, business methods, insurance and reinsurance, and overall regulation of the insurance industry. Included is a study of legal requirements for the organization of insurance companies, capital formation, operations and liquidation. The course emphasizes the legal considerations in product development specifically including financial service products and marketing insurance in traditional and emerging methods. Financial and statutory accounting requirements are reviewed and compared to generally accepted accounting principles. Consideration is also given to alternatives to insurance, their regulation and their business role.
International Banking (LAW 821)
This course provides an analysis of the international operations of US banks, the US regulation of foreign country banks which operate in the US, and the local law and regulation of domestic banks and foreign banks in Canada, the United Kingdom and Germany, and to a lesser extent in Japan, Mexico, France and selected other countries.
International Financial Markets (LAW 819)
This course provides the basic comparative law basis of the banking and other financial services markets in the major financial centers of England, Europe, Japan, Hong Kong, Singapore, etc. Particular topics include: the extraterritorial application of the federal securities laws to distributions and trading abroad, including a review of the application of US antifraud and anti-manipulative rules to offers and sales of securities made abroad; the problems of foreign bank secrecy laws to enforcement of the federal securities laws; the application of the registration requirements of the US securities laws to offerings made abroad; and the registration requirements of the Securities Act of 1933 and Securities Exchange Act of 1934 to foreign issuers with securities distributed and/or traded in the US either directly or through sponsored and unsponsored ADR programs. In addition, attention is given to the taxation of both US and overseas participants, including when a user of international markets becomes subject to taxation requirements of a foreign country.
Investment Banking (LAW 805)
This course explores the role and regulation of investment banks and securities firms in connection with raising capital (equity and debt) primarily through the public offering of securities. Included will be a detailed study of requirements and procedures for the federal registration and distribution of securities and a review of state "Blue Sky" laws. A prior familiarity with the Securities Act of 1933 is assumed and the majority of class time focuses on more advanced subjects, including analysis of underwriting agreements, anti-manipulative regulations applicable to distributions, regulation of public offerings by the NASD and offshore offerings. The perspective will be that of investment bankers, particularly their obligations and potential liabilities. In addition, the course covers how multi-service firms engaged in investment banking, trading and brokerage activities must deal with inside information.
This course provides a practical framework for learning about venture capital deals and other types of transactions used by start-up companies to get the funding necessary to develop and launch their products and services. It provides the foundation for understanding the basic elements of "deals," both domestic or transnational. The course will examine the issues and interests of the investors and the owners of early stage companies, and will describe the venture capital process. Specific legal topics to be covered include: the proper legal structure for a company seeking venture capital, issues of corporate control, securities laws requirements, and the legal implications and differences between common stock, preferred stock, convertible securities, debt, stock options and warrants, and other investment vehicles and intellectual property rights. Business issues to be covered will include: due diligence procedures and concerns, valuations, exit strategies and the terms of a typical venture capital deal, including corporate control issues, anti-dilution rights, registration rights, tag-along rights, representations and warranties, indemnifications and similar provisions.
This is a year-long course designed to teach students in the Financial Services Law LLM program how to research and write a scholarly academic paper of approximately 25 to 30 pages on a financial services topic of their choosing. The goal is to teach the students the principles of academic writing of a caliber suitable for publication in a law journal. In the first semester, the course teaches students how to conduct legal research, both in print materials and through computer research. In the second semester, the class teaches students how to write the normative section offering a solution to the problem discussed in the descriptive section, the section responding to criticisms of the proposal, and the conclusion of the paper.
This course treats the civil, administrative and criminal aspects of the major types of litigation involving financial services firms. Particular attention is paid to the development of a coordinated response to consumer claims which may involve civil liabilities, responses to exchange or self-regulatory agencies and criminal prosecutions.
Mergers and Acquisitions (LAW 813)
The course examines merger and acquisition issues generally, with a specific focus on issues of special importance to banks, insurance companies, brokerage firms and other financial services institutions. Included are: structuring of mergers and acquisition, terms of acquisition documents, fiduciary duties of directors, various regulatory prohibitions and difficulties presented to mergers in the financial services industry, including the successor federal banking law to the Glass-Steagall Act and various state law issues; capital implications of mergers including the most efficient way to combine reporting entities; issues involving pricing and negotiating a merger or acquisition; and mechanical issues involved in mergers, including the transfer of customer accounts, additional registration of account executives and officers and directors, valuation issues, state approvals, and licensing of the surviving company.
Money Managers (LAW 804)
This course examines (I) how various institutions—bank trust departments, insurance companies, investment advisors and commodity trading advisors—are regulated in their capacity as managers of other peoples' financial investments and (2) how the form in which the investment is made-investment company, commodity pool, partnership or trust-affects that regulation. Common Law principles of "prudence" and fiduciary responsibility are explored and contrasted with specific federal, e.g., ERISA, and state statutory requirements and prohibitions. Specific topics (illustrated by case histories) which are discussed include: disclosure requirements, fee structures, handling of conflicts of interest, training and supervision, oversight and discipline, and permissible investment techniques.
Readings in Regulatory Policy (LAW 818)
This course provides an opportunity for the advanced student of financial services law to analyze fundamental economic and political principles of regulatory policymaking, as well as the historical context in which the regulation of the US financial markets has developed. Topics to be examined include: the regulatory legacy of the Populist and Progressive movements; "market failure" and "public interest" rationales for regulation; the role of transaction costs in the organization of market activity; cost-benefit analysis and the dynamics of risk regulation; "public choice" theory and the analysis of "government failure"; and regulatory reform. Assigned texts include works by Ronald Coase, Richard Hofstadter, Robert Reich, and George Stigler. In addition, each student will be asked to identify an issue of financial services regulation to examine in detail through independent readings and to direct class discussion about that issue.
Regulation (LAW 800)
This course provides an introduction to the legal, regulatory, and ethical issues arising in the functioning and operation of financial markets. Topics include fiduciary responsibilities, role of self-regulatory organizations, "suitability" of investments, and the use of control of "insider" information, as well as a broad overview of U.S. securities and commodities laws and regulations. The course is structured to provide a functional understanding of market participants' duties to the public, clients, and employers. (cross-listed at FM 504, Stuart Graduate School of Business)
Regulation of Electronic Exchanges (LAW 827-051)
This course provides a foundation in financial market regulation with an emphasis on how regulatory structures and processes are changing amid market centers becoming increasingly electronic. Topics include: history and purpose of exchange regulation and why electronic markets aid the goal of an efficient national market system; comparison of the electronic market structure compared to the traditional floor based market structure; jurisdiction and basic policies of regulating bodies including the SEC, CFTC, NASD, NFA, and exchange self regulation; analysis of market surveillance structure and techniques; and review of SEC Regulation NMS and its goals.
Regulation of Securities and Commodities (LAW 807)
This course provides an introduction to the regulation of securities and commodities professionals, including: (1) the nature of operations of broker-dealers, futures commission merchants, and other market participants that are regulated as professionals; (2) the products and market places; (3) the jurisdiction of the various securities and commodities regulators and the self-regulatory organizations; (4) the registration and membership requirements of securities and commodities professionals; (5) capital and financial responsibility, margin and credit regulation and books and records of securities and commodities professionals; and (6) clearing settlement, depositories, SIPC and the bankruptcy of securities and commodities professionals.
Securities Regulation (LAW 801)
This course provides a foundation in the basics of securities law for attorneys who have not been exposed to the field before beginning the Graduate Program. It is required of all students unless they took such a course for their JD or have had sufficient experience in practice to warrant a waiver of this requirement from the director of the program. The course provides an overview of the securities markets, and gives a detailed analysis of the registration and distribution process under the Securities Act of 1933. Included are exempted securities and exempted transactions as well as reorganizations, recapitalizations and offerings by underwriters and dealers. An overview of the Securities Exchange Act of 1934 is provided, including an examination of the trading activities of broker-dealers. (Law 361: Securities Regulation may be substituted)
This course provides an introduction to commodities and securities professionals' compliance with the applicable statutes and rules of the federal, state and self-regulatory organizations, including: (1) an overview of supervision and compliance; (2) suitability, fair-dealing and customer disclosure; (3) customer documentation; (4) anti-fraud, anti-manipulation, churning, and SEC Regulation M; (5) trading compliance; and (6) investment banking compliance, including public offering and 34 Act compliance. (Prerequisite: FS 805 or permission of instructor)
Taxation & Financial Service Entities (LAW 816)
The course provides an overview of the tax considerations of financial service entities and financial products. The topics to be covered will depend in part on the types of financial products and entities in use at the time of the course. The course will focus on the tax issues associated with mutual funds, unit trusts, real estate investment trusts, mortgage-backed securities, asset securitization, tax-exempt bonds, stock dividends, hedging transactions, wash sales, short sales and straddles. In addition, the course will cover the tax aspects of property-casualty and life insurance companies (including the definition of insurance, the calculation of reserves, and tax aspects of insurance products). The course is structured to provide the financial services lawyer with a simple explanation of the most common tax issues that arise in structuring financial service entities and transactions. At least one law school course in federal income taxation is assumed. Although there are no formal prerequisites, familiarity with basic financial products is helpful.
This course is designed for students with a foreign legal education. The course covers all topics traditionally covered in a typical contracts course for JD students such as issues of contract formation, interpretation, breach, defenses, and remedies. Contract formation doctrines such as "consideration" and "offer and acceptance" and modern deviations from the traditional model are presented, as are various defenses to the prima facie case of contractual obligation. These include the traditional defenses of duress, misrepresentation, mistake, impossibility, commercial impracticability, unconscionability, and frustration. The contract remedies of monetary damages, specific performance, rescission and reformation are also explored. Among the other issues that may be studied are the parol evidence rule and the statute of frauds. The course examines both common law contract rules and the UCC. In addition to the conventional contract law topics above, this course also incorporates several short drafting exercises intended to demonstrate how contractual language is affected by the rules of contract law.