ARTICLE
The New Investor
Tom C.W. Lin* 
60 UCLA L. Rev. 678

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Abstract

A sea change is happening in finance. Machines appear to be on the rise and humans on the decline. Human endeavors have become unmanned endeavors. Human thought and human deliberation have been replaced by computerized analysis and mathematical models. Technological advances have made finance faster, larger, more global, more interconnected, and less human. Modern finance is becoming an industry in which the main players are no longer entirely human. Instead, the key players are now cyborgs: part machine, part human. Modern finance is transforming into what this Article calls cyborg finance.

This Article offers one of the first broad, descriptive, and normative examinations of this sea change and its wide-ranging effects on law, society, and finance. The Article begins by placing the rise of artificial intelligence and computerization in finance within a larger social context. Next, it explores the evolution and birth of a new investor paradigm in law precipitated by that rise. This Article then identifies and addresses regulatory dangers, challenges, and consequences tied to the increasing reliance on artificial intelligence and computers. Specifically, it warns of emerging financial threats in cyberspace, examines new systemic risks linked to speed and connectivity, studies law’s capacity to govern this evolving financial landscape, and explores the growing resource asymmetries in finance. Finally, drawing on themes from the legal discourse about the choice between rules and standards, this Article closes with a defense of humans in an uncertain financial world in which machines continue to rise, and it asserts that smarter humans working with smart machines possess the key to better returns and better futures.


* Tom C.W. Lin is Assistant Professor of Law at the University of Florida Levin College of Law.

1 comment to The New Investor

  • I would like to thank you for your insight into the evolution of modern finance, but I would like to express my agreeance and disagreeance. I agree that from a certain perspective and within a certain context that the field of finance is evolving in a much more technologically oriented manner. But, this is only within a certain segment of society. Furthermore, I’ve come to realize this is also from your probably technologically advanced perspective and to your benefit. However, there is a large segment of society which is not so technologicaly advanced, and it’s not necessarily to their disadvantage. Whether one has the advantages of technology or not he or she has to use whatever resources he or she has to excel in the field of finance.

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