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Intellect

Forum: Capital markets and human flourishing

Christine Hurt, associate dean and professor at BYU Law, delivered Tuesday’s forum address in the de Jong Concert Hall about capital markets and human flourishing.

Hurt made three points about her research in business law regarding how it connects to fairness and equality and helps everyone receive value for their ideas and work.

1. Everyone benefits from a well-run market.

Society thrives when a market runs effectively. Institutions such as schools, law enforcement and a free press create an environment in which every citizen benefits and is given an equal opportunity to succeed. Hurt points out that financial institutions are no different: a well-run financial institution is essential for people to succeed in society. These institutions, in order to be effective, must be run fairly.

Business law is vital to human flourishing. Whether the law protects the young person who shares an idea with acquaintances, the young corporation that wants access to public capital markets or the business owner trying to access financial products, strong legal frameworks for business benefit business owners — people.
Christine Hurt, BYU Law associate dean

2. A well-run market must be regulated and fair.

Hurt’s research revolves around the financing of businesses, especially in the initial public offering (IPO). An IPO occurs when a private business goes public in order to get money for an investment or expansion, and the public is given the opportunity to buy company shares.

When a company goes through this process, they hire three gatekeepers to help protect the company and its employees: a law firm, an accounting firm and an investment bank to act as an underwriter. The law firm makes sure that the registration is in order and counsels with other firms to be sure the IPO process is done correctly. The accounting firm audits and analyzes financial statements. The underwriter, the focus of Hurt’s research, takes on liability for fraud.

The underwriter, due to their extensive research and vetting, also generates buyers and determines the price of the shares. However, this is where markets can become unfair: the underwriter can set the price at an unfair point and make a large profit at the expense of the company attempting to go public. Minimizing this corruption and attempting to regulate the underwriter is a big part of Hurt’s work.

Christine Hurt

3. Not all markets will run smoothly.

Hurt’s research doesn’t always go as planned. While on a trip with students to Africa, Hurt worked to provide water and secondary education to villagers, but her attempts failed: the well went dry, nothing went according to plan. Money that had been entrusted to Hurt to be given to the villagers was stolen, leaving Hurt and her students devastated.

Hurt said, “I found myself telling my students that our purpose here was not to bring water to Lisanjala or to run a successful scholarship program. Our purpose was to show the love of Jesus Christ to everyone and to walk in the will of God.”

At the conclusion of the forum, Hurt spoke of how her expertise can benefit those around her in unexpected ways. While in Africa, a teenage girl asked for help registering for school. While this wasn’t what the trip had been intended for, it just was just as important to that girl as Hurt’s micro-entrepreneurship advice was to the village.

“My purpose wasn’t really to get [her] enrolled in school. My purpose was to show her how much Heavenly Father loves her. So much that He sent some crazy helicopter mom to her for a few days,” Hurt said.

She concluded by quoting from “Veggie Tales” creator Phil Vischer that regardless of our business plans, our five-year plan should be to walk in the ways of God.

Next Devotional: Spencer Fluhman

Spencer Fluhman, the executive director of the Neal A. Maxwell Institute for Religious Scholarship and an associate professor of history, will deliver the Devotional on Tuesday, July 30, at 11:05 a.m. in the de Jong Concert Hall. His remarks will be broadcast live on BYUtv, BYUtv.org, KBYU-TV 11, Classical 89 FM, BYUradio.

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