Houman Shadab

Houman Shadab

  • Member, Financial Markets Working Group
  • Associate Professor of Law, New York Law School

Houman B. Shadab is an associate professor of law at New York Law School. His research focuses on financial law and regulation including areas such as hedge funds and derivatives. Professor Shadab has testified before Congress on executive compensation and on hedge funds and the financial crisis. His academic publications can be found here.

PUBLISHED RESEARCH

New York University Journal of International Law and Politics

Talking the Talk, or Walking the Walk? Outcome-Based Regulation of Transnational Investment

Houman Shadab, Jerry Ellig | Jul 29, 2009
The Securities and Exchange Commission (SEC) seeks to increase investors' access to foreign markets by negotiating bilateral agreements with foreign regulators pursuant to a policy known as "mutual recognition." Under mutual recognition, a foreign entity seeking to access U.S. capital markets would be permitted to substitute compliance with its home country's regulations for compliance with U.S. regulation, as long as it agrees to submit to SEC antifraud jurisdiction in its dealings with U.S. investors. Similarly, U.S. entities could enter foreign markets without subjecting themselves to a second layer of regulation on top of what the SEC already requires. This article suggests that the best way for the SEC to pursue mutual recognition is to recognize foreign securities regimes that achieve investor protection outcomes comparable to those achieved by the SEC, and provides a concrete and workable approach for the SEC to follow.

Journal Article

Guilty by Association? Regulating Credit Default Swaps

Houman Shadab | Mar 27, 2009
Houman B. Shadab writes about how current discussions on regulations and policies about financial instruments by policymakers fail to distinguish between Credit Default Swaps and the actual mortgage-related debt securities, entities, and practices at the root of the financial crisis.

Journal Article

An Artifact of Law: U.S. Prohibition of Retail Hedge Funds

Houman Shadab | Dec 02, 2008
In this article Houman Shadab addresses the inaccessibility of the U.S. hedge funds market.

WORKING PAPERS

Talking the Talk, or Walking the Walk? Outcome-Based Regulation of Transnational Investment (archive version) image

Talking the Talk, or Walking the Walk? Outcome-Based Regulation of Transnational Investment (archive version)

Today, individual U.S. retail investors have virtually limitless opportunities to invest their money, with a notable exception: they cannot directly invest in securities of foreign issuers and still be protected under U.S. law. This missing opportunity deprives U.S. investors of the ability to fully diversify their investments and also imposes undue costs and risks upon investors seeking to invest directly overseas. This paper demonstrates that a Securities and Exchange Commission (“SEC”) policy of “mutual recognition” of foreign regulatory regimes that achieve investor protection outcomes comparable to those of the SEC would solve this problem.

Talking the Talk, or Walking the Walk? Outcome-Based Regulation of Transnational Investment image

Talking the Talk, or Walking the Walk? Outcome-Based Regulation of Transnational Investment

This article is forthcoming in the New York University Journal of International Law and Politics (2008).Summary…

POLICY BRIEFS

Credit Default Swaps and Regulatory Reform image

Credit Default Swaps and Regulatory Reform

Houman Shadab | Aug 2009
Although the use of Credit Default Swaps (CDS) by certain banks and insurance companies to trade mortgage-related risks exacerbated losses from the financial crisis, CDSs were not a fundamental cause of the crisis and in important ways even helped to reduce its impact.

Hedge Funds and the Financial Crisis image

Hedge Funds and the Financial Crisis

Houman Shadab | Jan 2009
Senior Research Fellow and member of Mercatus's Financial Markets Working Group Houman B. Shadab looks at how hedge funds have faired during the financial crisis and argues that they have been, and will continue to be, a stabilizing force throughout the crisis.

Hedging One's Bets - Increasing Access to Hedge Funds image

Hedging One's Bets - Increasing Access to Hedge Funds

Houman Shadab | Mar 2008
In the United States, unlike in several other advanced economies such as Ireland and Hong Kong, the law requires individuals to be wealthy (e.g., earning $200,000 in income if single) to be qualified to invest in hedge funds. Although this regulation is intended to protect investors, limiting hedge funds only to the wealthy prevents financially sophisticated yet non-wealthy investors from using the funds to minimize losses to their investment portfolios.

TESTIMONY & COMMENTS

Congressional Testimony

Hedge Funds and the Financial Market

Houman Shadab | Nov 13, 2008
Senior Research Fellow and member of Mercatus's Financial Markets Working Group Houman B. Shadab presented testimony before the House Committee on Oversight and Government Reform on November 13, 2008.

Congressional Testimony

Executive Pay and the Role of Compensation Consultants

Houman Shadab | Dec 05, 2007
Mercatus Senior Research Fellow Houman B. Shadab delivered this testimony before the House Committee on Oversight and Government Reform. Shadab discusses the academic law and economic literature regarding explanations for increased compensation among public company executives and other empirical findings relevant to potential conflicts of interest among executive compensation consultants.

Public Interest Comment

Dubai Financial Services Authority’s Proposed Hedge Fund Code of Practice

Houman Shadab | Oct 03, 2007
This Public Interest Comment addresses the Dubai Financial Services Authority's query as to whether the hedge fund industry may prefer a more prescriptive approach to defining best practices.

MEDIA CLIPPINGS

National Review Online - The Corner

'Too Big to Fail' Destoying the Effectiveness of the Fed

Veronique de Rugy mentions Houman Shadab and his piece  "Credit Default Swaps and Regulatory Reforms" in regards to the negative impact government intervention has had on the financial crisis on National Review Online's - The Corner.…

CNS News

Soros Rejects 'Market Paradigm'

Houman Shadab | Apr 07, 2008
Senior Research Fellow Houman Shadab argues against assertions in George Soros' book, "The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What it Means." >>Click here to read the whole article. Houman Shadab, a senior research fellow in the regulatory studies  program at the Mercatus Center at George Mason University, however, said  Soros…