The James Hausman Tax Law and Policy Workshop Series
Faculty of Law University of Toronto
presents
Victor Fleischer
University of Colorado at Boulder Law School
Regulatory Arbitrage
Tuesday, February 9, 2010
4:10 – 6:00 PM
Solarium (room FA2), Falconer Hall
84 Queen’s Park
Most of us share a vague intuition that the rich, sophisticated, well-advised, and politically connected somehow game the system to avoid regulatory burdens the rest of us comply with. The intuition is correct; this Article explains how it’s done.
Regulatory gamesmanship typically relies on a planning technique known as regulatory arbitrage, which occurs when parties take advantage of a gap between the economics of a deal and its regulatory treatment, restructuring the deal to reduce or avoid regulatory costs without unduly altering the underlying economics of the deal. This Article provides the first comprehensive theory of regulatory arbitrage, identifying the conditions under which arbitrage takes place and the various legal, business, professional, ethical, and political constraints on arbitrage. This theoretical framework reveals how regulatory arbitrage distorts regulatory competition, shifts the incidence of regulatory costs, and fosters a lack of transparency and accountability that undermines the rule of law.
Professor Victor Fleischer joined the Colorado law faculty in 2006. He specializes in tax, venture capital, and the structuring of corporate transactions. He has also taught as an Associate Professor of Law at the University of Illinois, an Acting Professor of Law (tenure-track) at UCLA, a visiting professor of law at Georgetown University, and a Research Fellow in Transactional Studies at Columbia Law School. Before entering academia, Professor Fleischer was an associate at Davis Polk & Wardwell in New York. He clerked for the Honorable M. Blane Michael, U.S. Court of Appeals for the Fourth Circuit, and the Honorable Alex Kozinski, U.S. Court of Appeals for the Ninth Circuit. Professor Fleischer's research focuses on tax planning, regulatory gamesmanship, and the structuring of corporate transactions. His article Two and Twenty: Taxing Partnership Profits in Private Equity Funds, 83 NYU L. Rev. 1 (2008), was discussed in a New York Times editorial and is widely credited with sparking the debate about how to tax carried interest. Recent publications have appeared in the NYU Law Review (twice), Michigan Law Review, and the Tax Law Review (three times). Professor Fleischer has been quoted in the New York Times, Wall Street Journal, Financial Times, The New Republic, The New Yorker, and many other media sources.
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For more workshop information, please contact Nadia Gulezko at n.gulezko@utoronto.ca.
