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A Roundtable Discussion with WUCL’s Business Law Scholars

Willamette Lawyer magazine recently convened a panel of Willamette’s business law scholars to discuss the financial crisis, its causes and our country’s best hopes for recovery. The roundtable included Professor Peter V. Letsou, director of the Law and Business Program; Professor David A.

Friedman, a commercial law expert with consulting experience in corporate transactions; and Visiting Professor Mike Eisenberg, former deputy general counsel of the Securities and Exchange Commission (SEC) in Washington, D.C. The Fallout for Investors Eisenberg: One of the side effects of the financial crisis is the mistrust that people have in the market and the professionals in the market, whether they are brokers, investment advisers or professional equity managers. Another level of mistrust is with the government’s ability to regulate these matters. There is a lot of substance to both of these areas of mistrust. The people who were involved in the financial crisis were the leadership of the most prominent investment banks, CEOs who had been in the business for many years, yet they joined the market frenzy that produced the “bubble.”

From left: David A. Friedman, Peter V. Letsou, Mike Eisenberg

Friedman: I agree that investors have lost trust in our system. We all have been trained to think about investing for retirement and putting money in our 401(k) or our IRA. You do what you are told and think you are going to be safe for retirement, but a lot of people are coming to the realization that nothing is safe in this arena anymore. It may take 10 to 15 years to recover from this, to get the Dow back to where it was. Letsou: I think our views of investing — and the risks involved — have changed forever. During the last 10 years, people thought you put your money in the stock market and at worst you might lose 2 percent or 3 percent, but you would never lose 30 percent or 40 percent. Now people have seen that can happen. I think it will be a long time until people have the same attitude toward investing that

10 | Willamette Lawyer

Willamette Lawyer | Spring 2009 • Vol. IX, No. 1