Expansion of the Fraud-on-the Market Theory: In re Control Data Corporation Securities Litigation
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Authors
Howell, W. Craig
Issue Date
1992
Volume
25
Issue
Type
Journal Article
Language
Keywords
Alternative Title
Abstract
INTRODUCTION|Rule 10b-5 is one of many rules the Securities and Exchange Commission ("SEC") uses to protect investors from fraud in the securities market. The requirements to prove a violation of Rule 10b-5 can become unreasonably burdensome on certain classes of plaintiffs. As a result, the courts have adopted the fraud-on-the-market theory to permit defrauded investors to recover damages without proving actual reliance on affirmative misstatements or omissions. In fraud-on-the-market cases, causation is not based on any specific transaction, but on the fact that plaintiff relied upon the market price of securities as being indicative of future value of the stock...
Description
Citation
25 Creighton L. Rev. 1079 (1991-1992)
Publisher
Creighton University School of Law