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18 N.Y.U. J.L. & Bus. 221 (2021-2022)
The Breakdown of the Public-Private Divide in Securities Law: Causes, Consequences, and Reforms

handle is hein.journals/nyujolbu18 and id is 221 raw text is: NEW YORK UNIVERSITY JOURNAL OF LAW & BUSINESS VOLUME 18 FALL 2021 NUMBER 1 THE BREAKDOWN OF THE PUBLIC-PRIVATE DIVIDE IN SECURITIES LAW: CAUSES, CONSEQUENCES, AND REFORMS GEORGE S. GEORGIEV* As a regulatory scheme, U.S. securities law has traditionally been designed around a set of lines-the 'public-private divide-which separate public companies, public capital, and public markets, from private companies, pri- vate capital, and private markets. Until the early 2000s, the lines were suc- cessful in establishing two largely coherent legal realms-a highly regulated public realm and a lightly regulated private realm. A series of bold and often-inconsistent reforms between 2002 and 2020, however, have trans- formed this longstanding regime into a low-friction system wherein public capital flows to both public and private companies, private capital is ever more abundant, and firms can effectively eschew public company status, which is both more costly and much less essential to firm success than ever before. This Article contends that, taken together, these developments have led to the breakdown of the public-private divide: in effect, the boundaries between the regulated and unregulated realms have been removed and the public-private distinction has lost its descriptive and explanatory power as an organizing principle of securities law. The Article contributes to the liter- ature by (1) putting forward a novel and comprehensive analytical account of the breakdown of the public-private divide (up through the completion of the deregulatory cycle), (2) identifying the consequences of these develop- ments with respect to specific firm constituencies and on a systemic level, * Associate Professor, Emory University School of Law. For helpful comments and discussions, I thank Steven Bank, Jennifer Fan, Kristin John- son, Kay Levine, Jonathan Nash, Mariana Pargendler, Joanna Shepherd, Ver- ity Winship, and participants in presentations at Emory University School of Law and the 2021 National Business Law Scholars Conference. This project has also benefitted from many conversations over the years with other mem- bers of the corporate and securities law academy and the feedback of several securities lawyers. I am grateful to the N.Y. U. Journal of Law & Business team for superb editorial assistance. I welcome comments and reactions via email and retain responsibility for any errors or omissions. 221 Imaged with Permission of N.Y.U. Journal of Law & Business 13 Harv. Bus. L. Rev. 1

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