Henry Hu

Law professor Henry Hu will receive the Massey Prize for his research in the field of law. Hu, who has been with the University since 1987, is a leading thinker in law and finance.

Photo Credit: Daulton Venglar | Daily Texan Staff

Law professor Henry Hu will be the second person to receive a Massey Prize for Research in Law, Innovation, and Capital Markets from the School of Law for his scholarly work in the capital market and corporate governance.. 

The Massey Prize, established in 2009, was created through a gift from alumni John and Elizabeth Massey. The prize is awarded to an individual who has completed innovative research in the field of law.

Hu said the prize has given him new inspiration to revolutionize the way the U.S. Securities and Exchange Commission approaches certain economic dilemmas. After joining the University faculty in 1987, Hu was hired by the SEC’s Division of Risk, Strategy, and Financial Innovation to head the division of economic and risk analysis, a job which he held from 2009-2011.

According to Hu, a pressing issue in the field of economics is the complexity of the circumstances required to be explained to investors by corporations before investments are made. He believes a solution to this problem is to simplify the process by giving the necessary information to investors, allowing them to analyze the information themselves.

“What I’m calling for involves a rethinking of the basic approach to information that’s been used by the SEC since the Great Depression,” Hu said. “New approaches to information are essential.”

 Hu said this proposed solution, along with a number of other ideas and terms that he has coined, comes from his combined knowledge of science, law and economics.

 “You need a very eclectic approach to deal with today’s very complex problems and transactions — knowing just the legal rules is not enough,” Hu said. “The exercise of genuine judgment and the bringing together of different fields in creative ways can be critical.”

Upon graduating from Yale Law School, Hu worked as a clerk for Judge Patrick Higginbotham of the 5th Circuit U.S. Court of Appeals. Higginbotham said the award is an honor not only for Hu, but for the rest of the law school faculty. He said Hu impressed him early in his career when he first started working with Hu.

“He was an extraordinary, bright young man, and some of his greatest characteristics include quickness in mind, coupled with powerful self-discipline,” Higginbotham said. “I’ve known him to be very hardworking, and when you put together a brilliant mind and hard work, what you get is a productive scholar.”

A symposium celebrating Hu’s award will be held Sept. 26. The keynote speaker at the symposium will be Robert Charles Clark, Harvard University distinguished professor and former dean of Harvard Law School. Ward Farnsworth, law professor and dean of the UT law school, said the event will be a fitting tribute to Hu’s work.

“It’s a ‘who’s-who’ of the leading thinkers in the country at the intersection of law and finance,” Farnsworth said. “It will be a day of great conversations and a day to celebrate one of UT’s wonderful faculty members.”

Hu said success has always been hard for him to define, regardless of his passion and interest in the field.

“I relished opportunities to work on complex and fascinating financial innovation related matters,” Hu said. “Whatever ‘success’ might mean, you can never anticipate it.”

UT law professor Henry Hu will return to School of Law after heading a division of the Securities and Exchange Commission for 13 months. Hu is a graduate of Yale Law School and his writings have appeared in Columbia Law Review, The New York Times and The Wall Street Journal. Hu was named director of the Division of Risk, Strategy and Financial Innovation (Risk Fin) in 2009. Hu announced his decision Thursday; the SEC has not yet named a replacement. The SEC set up Risk Fin as a regulatory agency in September of 2009 in response to the 2008 banking meltdown and lawmakers’ criticisms for not catching the Bernie Madoff Ponzi scheme. The agency is tasked with improving the SEC’s ability to identify developing risks and trends in the financial markets, as well as breaking down barriers within the SEC and improving communication between divisions, according to the SEC website. The agency was created through the merger of separate SEC units that conducted economic analysis and risk assessment. Hu hired people he had previously worked with who managed hedge funds on Wall Street, adding people with a business and financial background to a staff primarily made up of securities lawyers. The division was the first created at the SEC in 37 years. “He’ll be remembered as the George Washington of Risk Fin,” said John Nester, the director of the SEC’s Office of Public Affairs. Hu will resume teaching and the research he worked on prior to his departure, said Lawrence Sager, dean of the law school. “He is brilliant,” Sager said. “He has a wondrous technical understanding of the world of corporate finance and SEC regulation. This brings a marvelous dimension to the classroom, workshop table and the world of academic writing.” It was always understood Hu would return to UT after working for a stint at the SEC, Sager said. “We have worked so hard at the law school to build up a stellar faculty,” he said. “Bringing members of the faculty home with a treasure trove of experience is so important to us.” Law professor Lino Graglia said it is very important for the school to have a highly regarded expert in securities regulation. “He’s something of a perfectionist,” Graglia said. “He applies that perfectionism to his work; he has very high standards.” Graglia said there is no better experience for teaching securities regulation than to be the one creating it. “The only problem the school has now is that he’ll have offers from other schools,” Graglia said.