Prof. Henry T.C Hu

Professor Henry T. C. Hu holds the Allan Shivers Chair in the Law of Banking and Finance at the University of Texas Law School. Appointed by U.S. Securities and Exchange Commission Chairman Mary L. Schapiro, he was the inaugural Director of the SEC's Division of Risk, Strategy, and Financial Innovation (2009-2011). The first new Division in 37 years, "Risk Fin" was created to provide sophisticated, interdisciplinary analysis across the entire spectrum of SEC activities, including policymaking, rulemaking, enforcement, and examinations. See, e.g., (1) Kara Scannell, At SEC, Scholar Who Saw It Coming, Wall Street Journal, Jan. 25, 2010, at page C1; and (2) CNBC's "Squawk Box" - Feb. 23, 2011 (as the "guest host"): (a) Fmr. SEC 'Risk Czar' Speaks Out, http://www.cnbc.com/id/15840232?video=1811142035&play=1 and (b)Containing the Next Crisis, http://www.cnbc.com/id/15840232?video=15840232?video=1811216641&play=1. Interested in the law and economics of capital markets, financial innovation, and governance of corporations and financial institutions, he has written on asset allocation; corporate and financial institution compensation, disclosure, governance, objectives, and risk management; debt, equity, and hybrid "decoupling" through credit default swaps, equity swaps, securitization, stock lending, and other means; director fiduciary duties; financial innovation’s challenges to bank and corporate decision-making, business and legal concepts, and financial stability; individual investors and retirement security; model risk; regulation of banks, derivatives, hedge funds, and mutual funds; systemic risk; and Warren Buffett. The writings have appeared in law reviews (e.g., Columbia Law Review, University of Pennsylvania Law Review, and Yale Law Journal), finance and specialist journals (e.g.,European Financial Management, Journal of Applied Corporate Finance, and Risk), and newspapers (e.g., Financial Times, New York Times, and Wall Street Journal).

In research, his latest article (Too Complex to Depict? -- pertinent links at "Recent Publications" below -- argues that the SEC disclosure paradigm, in place since the Depression, is increasingly undermined by innovations in financial theory and practice, and offers ways forward. The article sets out a fresh conception of the paradigm, and shows that the paradigm must metamorphosize to one that relies both on an "intermediary depiction" model and a “pure information” model—and the full spectrum of strategies between these opposite extremes. (An afterword analyzes the unfolding JPMorgan Chase Chief Investment Office derivatives situation.) Prior research includes early articles on the risks posed by derivatives, articles on the corporate objective, and recent articles on "decoupling." A 1993 Yale Law Journal article receiving renewed attention in the wake of the global financial crisis showed how cognitive bias, compensation, financial "science," and other factors can lead major banks to take undue risks and make other mistakes as to complex derivatives. In recognition of a 1995 article on the corporate objective and hedging, an exchange-traded index derivative introduced in 1996 was assigned the ticker symbol of "HUI". Today, the "HUI" (NYSE Arca Gold BUGS Index) lives on not as a derivative but as what is often considered one of the world's two most widely-followed indexes for gold mining stocks. Recent articles (starting in 2006) offered the first systematic analysis of debt and equity "decoupling," and coined terms that have come into worldwide use such as "empty voter," "empty creditor," and "hidden (morphable) ownership." This decoupling research was featured in a lead front-page story in the Wall Street Journal and stories in the Economist, theFinancial Times, and the New York Times. On August 1, 2009, the "empty voting amendments" to the Delaware General Corporation Law became effective. On July 14, 2010, the SEC issued its most comprehensive review of the proxy voting infrastructure in 30 years, including analysis of decoupling issues.

Professor Hu teaches corporate law, modern finance and governance, and securities regulation. He has also taught them at Harvard Law School, where he was the Bruce W. Nichols Visiting Professor of Law for the 1997-98 academic year. He has been chair of the Association of American Law Schools' Business Associations Section and a member of the Legal Advisory Board of the NASD (now FINRA), the NASD and NASDAQ Market Regulation Committees, and the Board of Trustees of the Center for American and International Law. He is on the Editorial Board of the Oxford University Press's Capital Markets Law Journal. He has testified before Congress, including on behalf of the SEC as to landmark derivatives legislation. In 2010, the National Association of Corporate Directors named him as one of the 100 most influential people in corporate governance ("Directorship 100"), based on a survey of 15,000 directors and executives. He holds a B.S. (Molecular Biophysics & Biochemistry), M.A. (Economics), and J.D., all from Yale.

• JD Yale
• MA Yale
• BS Yale