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The Measure Of Recovery Under Rule 10b-5: A Restitution Alternative To Tort Damages, Robert B. Thompson

Vanderbilt Law Review

The thesis of the Article is that much of the confusion about rule 10b-5 remedies turns on the courts' failure to recognize adequately that the rule derives from two separate and independent sources at common law. Rule 10b-5 draws primarily on tort concepts that focus on harm to the plaintiff and limit recovery by principles of legal causation. In addition, the rule, like common-law fraud, traces its lineage to principles based on unjust enrichment. This second source focuses on the defendant's gain and requires the defendant to return all benefit received through the fraudulent transaction, even if that gain exceeds …