Columbia Business Law Review

The SPAC Phenomenon: A Transaction of Reinvention and the SEC's Reluctant Hand

Sabrina Feng — 2025-09-12

SPACs (Special Purpose Acquisition Companies) hit an all-time high in recent years as a popular vehicle for taking companies public. These transactions promised investors early access to high-growth companies and private firms seeking capital the speed and flexibility to bypass the rigors of traditional IPOs. Yet, years later, de-SPAC companies are widely underperforming, with poor returns and mounting bankruptcies. Beneath this innovation lies a fundamental regulatory challenge: the SPAC structure exploits gaps in securities law to create a transaction rife with misaligned incentives.

This Note argues that the SEC’s disclosure-based regulatory regime is nonresponsive to the structural flaws embedded in the SPAC lifecycle. By analyzing the legal origins of SPACs and examining the incentive dynamics of Sponsors, directors, PIPEs, and investors, this Note shows that SPACs operate more as tool for capital extraction than for genuine value creation. SPACs are emblematic of a broader trend in financial innovation, where legal engineering and disclosure regimes mask transactions that primarily benefit insiders at the expense of public investors and market integrity. This Note calls for more thoughtful deal-making and policymaking from regulators, legal, and financial professionals alike.

After Purdue Pharma: The Future of Nonconsensual Third-Party Releases in Chapter 15 Proceedings

Gillian Ho — 2025-09-12

With bankruptcy proceedings becoming an increasingly popular mechanism through which overburdened debtors and mass tortfeasors consolidate and manage liabilities, the Supreme Court’s ruling in Harrington v. Purdue Pharma deals a blow to individuals who may have once relied on nonconsensual, third-party releases to relieve themselves of their personal liabilities. While the Purdue Pharma decision rolls back thirty decades of the use of nonconsensual, third-party releases, the Supreme Court expressly limited its scope to domestic, Chapter 11 proceedings. In an era of global, multi- jurisdictional entities and rampant forum-shopping, this thrusts the practice of pursuing nonconsensual, third-party releases in cross-border insolvency proceedings into flux. This Note therefore aims to examine the impact that the Purdue Pharma decision could have on the future of nonconsensual third-party releases in cross-border, Chapter 15 bankruptcy proceedings as well as how the decision may shape debtors’ use of this mechanism under the American bankruptcy regime.

Deslandes v. McDonald's: No-Poach Agreements and the Rule of Reason

Daniel Sweat — 2025-09-12

In 2023, Judge Easterbrook held that an antitrust plaintiff’s claim can be evaluated under the rule of reason despite an ancillary restraints defense from the defendant. Deslandes v. McDonald’s thereby directly contradicted Polk Bros., Inc. v. Forest City Enters., which for decades stood for precisely the opposite proposition. In an environment of increased scrutiny from antitrust enforcers and uncertainty about the future of antitrust labor law, Deslandes only further muddied the waters. Clarity, however, lies in an analysis of the history and purposes underlying the ancillary restraints doctrine.

This Note argues that ancillary no-poach agreements—those between purchasers in a labor market that are reasonably necessary to accomplish the purpose of a broader, non-pretextual agreement—are properly analyzed under the rule of reason. Part I examines the standards of antitrust adjudication—per se, rule of reason, and quick look—and the historical development of the ancillary restraints doctrine. Part II catalogues the regulatory actions of state and federal antitrust enforcers who have applied increased scrutiny to labor market restraints in recent years. Against that backdrop, Part II then explains the arguments at play in Deslandes v. McDonald’s and why Easterbrook’s ruling in that case poses a problem for antitrust practitioners. Part III critiques Easterbrook’s ruling by arguing that ancillary restraints like those in Deslandes warrant analysis under the rule of reason, not the per se standard.

Smart Contract Accountability Problems: Default Oracle Liability as the Solution

Leana Ter-Martirosyan — 2025-09-12

Smart contracts have emerged as a transformative force in contract law, leveraging blockchain technology to automate transactions and reduce reliance on human intermediaries. However, their widespread adoption is hindered by significant legal challenges, particularly in determining liability for transaction failures. This Note examines the accountability problems inherent in smart contracts, focusing on the critical role of oracles—third-party entities that feed external data into blockchain-based agreements. While existing scholarship explores the theoretical foundations and potential applications of smart contracts, this Note shifts focus to liability allocation and proposes a novel framework: default oracle liability. Under this proposal, oracles bear primary responsibility for transaction errors arising from inaccurate data sourcing or validation failures. If oracles demonstrate that they functioned correctly, liability shifts to smart contract developers, who are responsible for ensuring secure and error-free code. By clarifying accountability, this framework incentivizes higher standards for data accuracy and software integrity, ultimately fostering a more reliable and legally-viable environment for smart contracts to operate.

Retroactive Application of the New York Foreclosure Abuse Prevention Act

Yudu Zang — 2025-09-12

At the end of 2022, the New York State Legislature enacted the Foreclosure Abuse Prevention Act (“FAPA”). FAPA brought several significant changes to the then-current statutes and legal rules concerning a mortgagee’s ability to toll or reset the statute of limitations of a foreclosure action through voluntary discontinuance. FAPA’s enactment spurred a wave of litigation, and the disputes focus heavily on the extent and validity of FAPA’s retroactive application. However, the lower courts in New York have issued inconsistent opinions. Given the lack of scholarship and any Court of Appeals decision, this Note ventures to recommend better solutions to the legal questions currently in contention and provide more coherent rules and standards for future cases. It argues that FAPA’s urgent remedial goal lowers the hurdle to overcome presumption against retroactivity under state common law. It then distinguishes, more clearly than the current FAPA case law, what events or prior court decisions in a foreclosure action should vest within the mortgagee a property or due process right that cannot be violated by retroactive application. Finally, it notes that if FAPA’s retroactive application substantially impairs express contract terms, it would violate the Contract Clause of the Constitution, despite the exception elaborated by the Second Circuit.

Law in a Time Capsule: Should the 1960s Merger Cases Be Affirmed Today?

William Rooney — 2025-09-12

The NYSBA 2024 William Howard Taft Lecture

Merger Law is Not — and Should not Be — In a Time Capsule

Andrew Finch — 2025-09-12

The NYSBA 2024 William Howard Taft Lecture

Contemporary Merger Review Under the Rule of Law: Translating Old Law into Modern Economics

David Lawrence — 2025-09-12

The NYSBA 2024 William Howard Taft Lecture

Risk, Discretion, and Bank Supervision

Peter Conti-Brown — 2025-09-12

This Article argues that an old but overlooked form of governmental oversight—bank supervision—sits at the center of two foundational tensions in the governance of the American economy. The first is the extent to which the financial system is controlled by public actors (i.e., the government) versus private actors (e.g., the banks). The second is the extent to which the contest for that control is regulated by bright-line rules versus by the exercise of regulatory discretion. On the first tension, this Article argues that supervision is the public and private participation in financial risk management, such that public actors cannot relinquish control of residual risk while private actors do not relinquish control of frontline risk management. In this sense, risk management is shared, but not shared equally: bank supervisors represent a government that has essentially guaranteed the resilience of the financial system through formal and informal commitments. Supervision is the part of the government that is created and evolves— however imperfectly—to manage those relationships, guarantees, and commitments. The second tension, between rules and discretion in managing those commitments, represents the defining ethos of bank supervision. The process of supervision is not simply the verification of compliance with laws promulgated by Congress; rather, it is a flexible use of discretion within a system whose boundaries are defined by rules that are intentionally broad and vague. This last point is of profound importance in the post-Chevron era: as regulations receive less deference in courts, supervisory assessments will likely expand in importance even further.

Using the rich history of supervision in the United States from the antebellum period to the present, this Article presents a theoretical conception of supervision as the space where bankers and the government engage each other in sometimes cooperative, sometimes contentious disputes with substantial influence on the direction of financial and economic policy. This conception of bank supervision makes important contributions to our understanding of issues of importance to banking, such as climate change finance and deposit insurance, but also has important implications for administrative law, constitutional law, and the evolution of state capacity in the United States in the long 20th century.

Securities Fraud and the Market for Individual Stocks

Sue S. Guan — 2025-09-12

As long as stock markets have existed, so too have those who invest for idiosyncratic reasons unrelated to achieving financial returns. Some investors may be motivated by personal utility, others seek to signal loyalty to corporations, some might see their investments as an expression of their faith, others chase the latest fads, and still others simply make uninformed investment choices. Yet until relatively recently, these forms of demand-driven investing have received little attention. Most commentary has either dismissed the phenomenon as noise or attempted to absorb it into existing models of fundamental value-based investing.

This Article counters that understanding. It argues that demand-driven investing can create a market for individual stocks that is distinct from noisy trading as well as from fundamental-value-driven trading. This is especially so as the voices of retail investors, social media influencers (“finfluencers”), and other non-traditional, values-driven investors in today’s capital markets have grown in volume and strength. It is increasingly difficult to ignore the investors who systematically choose companies to invest in based on demand-driven factors such as alignment on environmental, social and governance (ESG) issues, an influential investor’s commentary on a security, and preferences between cultural and political values—in addition to seeking financial returns.

Understanding the demand-driven component of investor decision-making as creating a market for individual stocks yields fresh insights for today’s stock market information ecosystem and the securities laws’ ability to respond to misinformation within that ecosystem. Specifically, this Article offers a framework to explain how demand-driven

investing motivates investors and affects price discovery. This then challenges the limits of existing defenses against misinformation in the securities markets, in particular the scope of Rule 10b-5. Solely protecting financial information results in an incomplete understanding of investor motivations. On the other hand, the idiosyncratic nature of demand-driven investing can make determinations of liability inconsistent and unpredictable. This Article explores the complex doctrinal and policy questions that are implicated.

Hooked and Hustled: The Predatory Allure of Gamblified Finance

Nizan Geslevich Packin — 2025-09-12

This Article examines the growing phenomenon of “gamblification” in financial markets, where platforms like Robinhood, Webull, and crypto exchanges increasingly turn investing into a high-stakes game. By integrating gambling and gaming elements from video games—such as nudging, instant rewards, immersive visuals, and feedback loops—these platforms lure users into treating trading as a thrilling adventure rather than a financial decision. The result is a new breed of retail investors driven by the excitement of "leveling up" rather than informed financial judgment, blurring the line between prudent investing, online gaming, and reckless gambling. This Article introduces a systematic description of gamblification techniques that reveal how platforms exploit behavioral psychology to create engaging but somewhat predatory trading experiences. These features—designed to trigger dopamine rushes and exploit decision-making shortcuts—push users, particularly those with lower financial literacy, into cycles of excessive trading, impulsive decisions, and escalating risks. The gamblified environment fosters a competitive culture where users, influenced by leaderboards; peer pressure; influencers like the meme stock star Roaring Kitty, who returned on social media in June 2024; and social dynamics within communities like Reddit’s WallStreetBets are more likely to take on financial risks that they do not fully comprehend. Particularly concerning is the growing trend of retail investors placing more trust in financial influencers than in their own family, friends, or even economic experts. This trend is especially alarming when considering a recent survey that found one in three respondents cited popular financial influencers as the most significant factor driving their trading decisions.

This Article moves beyond behavioral analysis to expose the darker implications of this convergence of gaming, gambling and finance. It argues that the gamblification of trading overlaps with predatory practices that disproportionately exploit vulnerable users, such as individuals with limited financial literacy and younger participants, as well as women. Findings that were publicized in Summer 2024 by the UK’s Financial Conduct Authority underscore the risks of digital engagement practices like push notifications and prize draws, which have been shown to disproportionately increase risky trading behaviors among these groups. This blend of entertainment and finance raises serious concerns about exploitation, where platforms profit from heightened engagement while exposing users to significant financial risks. In assessing the regulatory landscape, this Article explores how gamblified finance challenges existing securities laws, intersects with gambling regulations, and implicates consumer protection standards. It contends that current regulations inadequately address the design choices that drive these platforms’ predatory practices, permitting harmful financial inclusion under the guise of democratized access. To address these issues, this Article offers forward-looking policy recommendations that balance expanding financial access with the imperative to protect users from exploitation. Without decisive regulatory action, the gamblification of finance risks transforming trading into a dangerous mix of entertainment and predation, undermining market integrity and exposing retail investors—especially the most vulnerable—to serious financial harm.

Corrupt Joint Ventures in the Market for Residential Real-Estate-Settlement Services

Christopher L. Peterson — 2025-09-12

Closing costs in residential-real-estate sales have long acted as a significant barrier to American home ownership. In the Real Estate Settlement Procedures Act of 1974 (RESPA), Congress attempted to limit these costs by prohibiting referral fees, or “kickbacks,” between the various settlement-services providers. In 1983, Congress adopted an exception to its kickback prohibition for affiliated-business arrangements, where residential-real-estate service providers jointly own a business and the only thing of value received by a referring party from the arrangement is a proportional return on its ownership interest in the affiliated business. For over 40 years, courts have struggled to determine the circumstances under which these arrangements are permissible. In the last few years, the real-estate-settlement- services market has experienced a proliferation of joint ventures attempting to facilitate referral payments through the affiliated-business-arrangement exception. In these joint ventures, typically between real-estate agents, on the one hand, and mortgage brokers or title-insurance companies, on the other, the real-estate agent takes a sizable ownership share in the joint venture without contributing significant capital. Mortgage brokers and title companies arrange these joint ventures as a means of rewarding real-estate agents for referrals. Real-estate agents enter these joint ventures to earn ancillary profits from the mortgage and title closing costs that are paid by homebuyers and sellers. But these joint ventures are a bad deal for consumers because they stifle competition and increase homebuying costs, including “junk fees.” We argue that (1) the common practice of forming joint ventures by offering discounted investment opportunities violates RESPA’s kickback prohibition, and (2) many joint ventures violate the prohibition on abusive conduct in the Consumer Financial Protection Act of 2010 (CFPA) when real-estate agents take advantage of consumers by steering them into co- owned settlement-services providers. We conclude with proposed compliance principles and policy recommendations.