Rewiring the DNA of Securities Fraud Litigation: Amgen's Missed Opportunity
19 Pages Posted: 25 Jun 2013 Last revised: 26 Sep 2013
Date Written: May 8, 2013
This Essay, a contribution to a fall 2012 "Behavioral Economics and Investor Protection" symposium sponsored by Loyola-Chicago's Institute for Investor Protection (IIP), argues that securities fraud doctrine needs to be rebuilt. The lessons of behavioral economics undercut several of the key elements of the modern Rule 10b-5 securities fraud claim - including current approaches to materiality, scienter, and reliance. Drawing on my previous work on substantive tort law and securities fraud, I sketch the beginnings of a reformed approach in which securities fraud class actions would be modeled less on common law fraud than on deceptive and false advertising claims.
Keywords: securities fraud, Amgen, reliance, materiality, scienter, recklessness
JEL Classification: K22
Suggested Citation: Suggested Citation