Fraud on the Market: An Action Without a Cause
Amanda M. Rose
Vanderbilt University - Law School
November 19, 2011
University of Pennsylvania Law Review PENNumbra, Vol. 160, p. 87, 2011
This is a response to William W. Bratton & Michael L. Wachter, The Political Economy of Fraud on the Market, 160 U. PA. L. REV. 69 (2011). Bratton and Wachter argue that fraud-on-the-market class actions (FOTM) should be eliminated and replaced with stepped-up public enforcement efforts targeted at individual wrongdoers (rather than the corporate enterprise, the FOTM target of choice). In this Response, I do not disagree: My own scholarship has similarly emphasized the benefits of shifting away from FOTM to greater reliance on public enforcement mechanisms. Instead, I take the opportunity to elaborate on the deterrence and corporate governance shortcomings of FOTM, strengthening further the case Bratton and Wachter make for an enhanced public enforcement role.
Number of Pages in PDF File: 11
Keywords: Securities fraud, enterprise liability, fraud on the market, deterrence, corporate governance, private enforcement, public enforcement, Securities & Exchange CommissionAccepted Paper Series
Date posted: November 22, 2011 ; Last revised: September 14, 2012
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