Articles The Rise of Dispersed Ownership: The Roles of Law and the State in the Separation of Ownership and Control John C.Coffee,Jr.' CONTENTS I.THE EVIDENCE ON CONVERGENCE.......... 12 A.Formal Legal Change.. …12 b.The structure of share ownershin .15 C.The Growth of European Stock Markets .16 0 The Emergence of an International Market for Corporate Control .20 E.A Preliminary Evaluation... .21 F.The Sratus of the mnsider-Dominated II.WHEN DOES SEPARATION OF OWNERSHIP AND CONTROL ARISE? A HISTORICAL PERSPECTIVE............ …24 A.The United States Experience.... 25 1.The Role of Investment Bankers .26 2.The New York Stock Exchange as Guardian of the Public Investor 34 B.The British Experience.......... .39 citer:tro of the and Yale Law School Raben Lecture. Imaged with the Permission of Yale Law Journal Articles The Rise of Dispersed Ownership: The Roles of Law and the State in the Separation of Ownership and Control John C. Coffee, Jr.' CONTENTS I. THE EVIDENCE ON CONVERGENCE .................................................. 12 A. Formal Legal Change ................................................................ 12 B. The Structure of Share Ownership ............................................. 15 C. The Growth of European Stock Markets .................................... 16 D. The Emergence of an International Market for Corporate Control ..................................................................... 20 E. A Preliminary Evaluation ........................................................... 21 F. The Status of the Insider-Dominated Firm ................................ 23 II. WHEN DOES SEPARATION OF OWNERSHIP AND CONTROL ARISE? A HISTORICAL PERSPECTIVE ............................................................ 24 A. The United States Experience ................................................... 25 1. The Role of Investment Bankers ........................................ 26 2. The New York Stock Exchange as Guardian of the Public Investor .................................................................... 34 B. The British Experience ............................................................... 39 T Adolf A. Berle Professor of Law, Columbia University Law School. The author is grateful for helpful comments from Brian Cheffins, John Langbein, Roberta Romano, and Andrei Schleifer; from my colleagues, Ronald Gilson, Victor Goldberg, Jeffrey Gordon, and Curis Milhaupt; from William B. Williams, Esq., of the New York Bar; and from participants at the Yale Law School Raben Lecture. 1 Imaged with the Permission of Yale Law Journal