Nebraska College of Law – Designing Securities Laws that Protect Retail Investors
Assistant Professor of Law, James F. Tierney describes his research.
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- [00:00:05.280]The way retail investors engage with stock markets
- [00:00:07.770]and financial advice,
- [00:00:09.000]is completely different than it was even 10 years ago.
- [00:00:12.000]In the last couple years we've gone to
- [00:00:14.610]zero commission trading,
- [00:00:15.900]which makes it easier than ever before
- [00:00:18.060]to do a lot of trading,
- [00:00:19.440]even if that's not in your best interest.
- [00:00:21.630]These days, you don't even have to call up your broker,
- [00:00:24.810]pay large commissions in order to trade,
- [00:00:26.952]all you have to do is enter your stock information
- [00:00:30.120]into your app, and you can do that 24 hours a day.
- [00:00:33.660]It's sometimes too easy to trade stocks,
- [00:00:36.480]and that can get people into a lot of hot water.
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- [00:00:46.350]And so my research on securities law
- [00:00:48.540]focuses on how we can design rules that encourage people
- [00:00:52.230]to invest for the right reasons,
- [00:00:54.570]in ways that are gonna help achieve their financial goals,
- [00:00:57.450]and grow the real economy.
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- [00:01:09.990]So two of my projects in the last year are focused
- [00:01:12.030]on the role of gamified investing,
- [00:01:14.550]and meme stocks in retail investor behavior.
- [00:01:17.910]Gamification is the use of app interface design
- [00:01:21.247]in ways that encourage people to engage more with some app.
- [00:01:26.400]So in the case of a stock trading app,
- [00:01:28.350]that might mean leader boards,
- [00:01:30.210]or confetti across the screen,
- [00:01:32.400]that gets you to come back and trade more,
- [00:01:34.950]even if research shows that trading a lot
- [00:01:37.290]isn't necessarily good for you.
- [00:01:39.120]Meme stocks are a kind of corporate stock
- [00:01:42.750]that are really popular among internet based traders.
- [00:01:46.440]People coordinate about their trades online
- [00:01:49.530]through Twitter, or Reddit, other social media,
- [00:01:52.860]making it more of a game-like experience.
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- [00:02:06.480]The ultimate goal of my research is to make sure
- [00:02:08.250]that we can broaden participation in capital markets,
- [00:02:11.250]and to ensure that investors are protected
- [00:02:13.680]while we are encouraging the right kinds of investments
- [00:02:15.990]that are gonna grow the real economy.
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