When Jonathan Lau (Bachelor of Accounting and Financial Management ‘11) collects his Master of Accounting (MAcc) degree later this year, he and his School of Accounting and Finance (SAF) professors will look back with more than the usual pride at his stellar achievements. A few months ago, Lau took top honours at the prestigious student paper competition of the Academy of Legal Studies in Business (ALSB) 2011 National Conference. He was competing at the Academy’s New Orleans event against finalists from universities across the United States.
The 2011 edition of the annual competition was organized by the Yale School of Management and attracted 200 undergraduates, many of them enrolled in pre-law programs and heading for top American law schools. They submitted their papers to a double blind review, with 10 finalists chosen for the ultimate stage of the contest.
“This is an amazing honour,” said professor Sally Gunz in announcing Lau’s triumph to the School. “In his study Jonathan bridged law and finance and ethics,” she reported, “as well as the theory behind the principles.”
Lau’s Proposal for Ontario
In his submission, “A Proposal for the Enhancement of Canadian (Ontario) Insider Trading Regulations,” Lau exhaustively compared insider trading laws and regulations in Ontario, the US and the UK from a statutory and enforcement perspective. He observed that Ontario’s securities market - the world’s seventh largest - has suffered from rampant insider trading, and he stressed that curbing such illegal trading is “a crucial pre-requisite to a healthy, modern capital market.”
The problems in Ontario, he discovered, were not the result of unsound law, since current regulation (the province’s insider trading law, including the “person connection” required between the trader and the source of information) does permit regulators to pursue violators with as much vigour as their counterparts elsewhere. Rather, poor enforcement is the issue.
"Fortunately for Ontario‘s market participants, a turnaround is achievable,” concluded the student, striking a hopeful note. He recommended reinvigorating the “person connection” stipulation, allocating more resources to enforcement, and taking the fight to identified bad actors. In his view, the Ontario Securities Commission can still become a strong, effective policing agency.
Lau and SAF Professors
The award-winning submission started life as a paper Lau wrote in professor Darren Charters’s Accounting and Financial Management (AFM) 231 - Business Law, course in 2009, an assignment that would give the student very intimate knowledge of “Canadian Securities Regulation, Fourth Edition,” the industry Bible. The ALSB competition was an opportunity to build on that research and take it to a new level.
Over a two-year span Lau devoted about 200 hours - many spent in the University of Toronto Law Library – to extending the initial study while attending to his other courses. What had been a modest-sized term paper mushroomed to a densely-packed, single-spaced 22-pager boasting more than 160 source citations. “It was the biggest piece of writing I’d ever done!” laughs its author.
Lau was sponsored by Charters and assisted by professors Ranjini Jha and Ken Vetzal. Mainly through e-mails, they gave advice on the structure of his argument, explained complex legal issues, and offered tips on effective presentations. Equally valuable were ideas and counsel generously contributed by Lau’s Fellowship Honouree, Mike Dean (Bachelor of Math ‘92). Assistance from all these mentors gained intensity in May 2011, the crunch period just before the paper was due.
“Winning was Awesome”
“My expectations going into the contest were actually not that high,” Lau told an interviewer. He was aware of the traditionally high quality of the contestants, but he thought he had a good chance to reach the presentation stage (open to only 10 finalists). He felt his study had the necessary “breadth and depth” to merit selection.
His was only finalist paper on an insider trading or regulation theme; other submissions focused more on calculation matters and ethical issues. Among his competitors was a previous ALSB winner, who despite coming to the 2011 event with a brand-new paper, did not manage to get the top prize.
Lau is thankful that the presentation component of the contest was not the deciding factor in obtaining the prize: his laptop malfunctioned at exactly the wrong time. Nevertheless, he quickly regrouped and fielded questions, and, looking back today, he feels that that everything went quite smoothly. Indeed, both his paper and his presentation were judged outstanding.
“Winning the award was awesome,” says the student. “Just getting into the competition was good, and this was the icing on the cake!” He admits to being a bit surprised to win the award, and was happy to join other finalists to celebrate after the main events.
Lau is reportedly the first non-US student to win the ALSB’s top prize. In past years other SAF students have done well in the same competition, reaching the finals but not taking home the crown. Lau's paper (A Proposal For The Enhancement of Canadian (Ontario) Insider Trading Regulation (PDF)) has been published in the conference proceedings.
A self-described “finance geek” with an interest in law and social impact issues, Lau is primarily focused on financial risk management. After obtaining his MAcc degree, he plans to write the Uniform Evaluation (UFE) and return to Ernst & Young as a senior staff accountant.