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84 B.U. L. Rev. 301 (2004)
Gatekeeper Failure and Reform: The Challenge of Fashioning Relevant Reforms

handle is hein.journals/bulr84 and id is 313 raw text is: ARTICLES
GATEKEEPER FAILURE AND REFORM:
THE CHALLENGE OF FASHIONING
RELEVANT REFORMS
JOHN C. COFFEE, JR.*
IN TRO D UCTION  ............................................................................................... 302
I. GATEKEEPERS: PAST AND PRESENT .................................................... 308
A .  D efining  the  Concept ................................................................... 308
B.   The Auditing Profession During the 1990s:
A  Study  in  Transition  ................................................................... 311
C.   Security Analysts During the 1990s ............................................. 315
D.   Explaining Gatekeeper Failure ................................................... 318
1. The Deterrence Explanation: The Underdeterred
G atekeeper ............................................................................. 3 18
2.  The  M  arket Bubble  Story  ...................................................... 323
3. Allocating Responsibility Among Gatekeepers, Managers,
and  Investors .......................................................................... 326
a.  The Changing Motivations of Managers ......................... 327
b.  The  Role  ofInvestors ....................................................... 328
c.  The Role of Gatekeepers .................................................. 330
4.  A  Prelim inary  Evaluation  ...................................................... 330
5.  An  International Perspective   ................................................. 331
II. THE NEAR FUTURE OF GATEKEEPERS: SARBANES-OXLEY AND THE
LOOMING    LITIGATION    CRISIS .............................................................. 333
A.   A Typology of Conflict of Interest Reforms ................................. 334
1.  Structural R eform    .................................................................. 334
2.  Prophylactic   R ules ................................................................. 334
3. Independence and Empowerment Rules ................................ 335
4.  L iability  R ules  ....................................................................... 335
B.   The Sarbanes-Oxley Act: What It Did and Did Not Do ............... 336
C .  The  Judicial Response   ................................................................. 337
D.   The Prospective Litigation Impact of Reform ............................. 342
III. THE FUTURE GATEKEEPER: REMEDIES FOR GATEKEEPER FAILURE ... 345
A.   Striking the Balance on Liability ................................................. 346
B.   Designing a Stricter Liability Approach: A Proposal ............. 349
C.   Implementing the Gatekeeper Role of Attorneys ......................... 353
Adolf A. Berle Professor of Law, Columbia Law School, and Director, Columbia Law
School Center on Corporate Governance.

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