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Full-Text Articles in Law
Stock Market Law And The Accuracy Of Public Companies’ Stock Prices, Kevin Haeberle
Stock Market Law And The Accuracy Of Public Companies’ Stock Prices, Kevin Haeberle
Faculty Publications
The social benefits of more accurate stock prices—that is, stock-market prices that more accurately reflect the future cash flows that companies are likely to produce—are well established. But it is also thought that market forces alone will lead to only a sub-optimal level of stock-price accuracy—a level that fails to obtain the maximum net social benefits, or wealth, that would result from a higher level. One of the principal aims of federal securities law has therefore been to increase the extent to which the stock prices of the most important companies in our economy (public companies) contain information about firms’ …
Mismatch: The Misuse Of Market Efficiency In Market Manipulation Class Actions, Charles R. Korsmo
Mismatch: The Misuse Of Market Efficiency In Market Manipulation Class Actions, Charles R. Korsmo
Faculty Publications
Plaintiffs commonly bring two distinct types of claims under Section 1(b) of the Securities Exchange Act of 1934: 1) claims of material misrepresentations or omissions; and 2) claims of trade-based market manipulation. Despite the distinctive features of the two types of claims, courts have tended to treat them identically when applying the “fraud on the market” doctrine. In particular, courts have required both types of plaintiffs to make identical showings that the relevant security traded in an “efficient market” in order to gain a presumption of reliance. The reasons for requiring such a showing by plaintiffs in a misrepresentation case …