Buy, Sell, or Hold? Analyst Fraud from Economic and Natural Law Perspectives

65 Pages Posted: 1 Mar 2007 Last revised: 18 Apr 2008

See all articles by Ronald J. Colombo

Ronald J. Colombo

Hofstra University - Maurice A. Deane School of Law

Date Written: February 27, 2007


Investor protection and healthy capital markets are commonly acknowledged as the objectives historically driving U.S. federal securities legislation and policy. Less commonly appreciated, or perhaps intentionally neglected, is the critical role that virtue was understood to play in realizing these objectives by the architects and original enforcers of the securities laws. This understanding has largely been lost, in no small part, due to the success that law and economics has had in dominating securities law thinking. This Article posits that this original understanding can be rediscovered, and the role of virtue restored to its rightful place in securities regulation, via application of a natural law approach to securities law issues. Within the context of the recent research analyst conflict-of-interest problem, this Article compares a natural law approach to the problem with a law and economics approach. The conclusion reached is that the natural law approach is preferable on account of its endorsement of solutions that are more comprehensive, and, moreover, more harmonious with the historical values and objectives of U.S. securities law.

Keywords: natural law, law and economics, aristotle, aquinas, securities regulation, securities law, virtue, virtue ethics, Rule 10b-5, securities analysts, research analysts

JEL Classification: A13, K22

Suggested Citation

Colombo, Ronald J., Buy, Sell, or Hold? Analyst Fraud from Economic and Natural Law Perspectives (February 27, 2007). Brooklyn Law Review, Vol. 73, p. 91, 2007, Hofstra University Legal Studies Research Paper No. 07-7, Available at SSRN:

Ronald J. Colombo (Contact Author)

Hofstra University - Maurice A. Deane School of Law ( email )

121 Hofstra University
Hempstead, NY 11549
United States


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