Abstract

http://ssrn.com/abstract=2394251
 


 



Market Efficiency and Fraud on the Market: The Promise and Peril of Halliburton


Charles Korsmo


Case Western Reserve University School of Law

February 11, 2014


Abstract:     
This spring, the Supreme Court will hear Halliburton v. Erica P. John Fund, the most important securities law case in a quarter century. The Court will reconsider Basic v. Levinson and the fraud-on-the-market doctrine, the doctrine that has made the modern securities fraud class action possible. I argue that — contrary to the claims of the parties and of several of the Justices — the Court need not pass judgment on the efficient capital markets hypothesis in order to pass judgment on the fraud-on-the-market doctrine. It is possible to accept the efficient capital markets hypothesis and reject the fraud-on-the-market doctrine, or to reject the efficient capital markets hypothesis and accept the fraud-on-the-market doctrine. I further demonstrate that it is not only unnecessary, but would also be profoundly unwise for the Justices to wade into the debate over market efficiency. While market efficiency is of little relevance to the debate over the fraud-on-the-market doctrine, it is central to numerous other contemporary legal debates, many of which are of far more fundamental importance than the fraud-on-the-market doctrine. Any Supreme Court pronouncements on market efficiency would be certain to resurface in these debates in ways the authors would not intend.

Number of Pages in PDF File: 79

Keywords: Halliburton, Basic, Fraud on the Market, Market Efficiency, Supreme Court, securities fraud

JEL Classification: K22, K41

working papers series





Download This Paper

Date posted: February 12, 2014  

Suggested Citation

Korsmo, Charles, Market Efficiency and Fraud on the Market: The Promise and Peril of Halliburton (February 11, 2014). Available at SSRN: http://ssrn.com/abstract=2394251 or http://dx.doi.org/10.2139/ssrn.2394251

Contact Information

Charles Korsmo (Contact Author)
Case Western Reserve University School of Law ( email )
11075 East Boulevard
Cleveland, OH 44106-7148
United States
Feedback to SSRN


Paper statistics
Abstract Views: 383
Downloads: 116
Download Rank: 145,193

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo1 in 0.375 seconds