Fraud on the market: Pay on say

Slippery principle

OF THE numerous controversial theories about the workings of stockmarkets, few have had a bigger pecuniary impact than a marriage between the notion of efficient markets and a legal principle known as “fraud-on-the-market”. This pairing has provided grounds for sweeping claims for damages whenever a company’s share price moves abruptly. After decades of wrangling the tactic will come before America’s Supreme Court on March 5th in the case of Halliburton v Erica P John Fund.Reflecting the stakes, 11 briefs have been filed with the court on behalf of Halliburton. A dozen have also been filed on behalf of the plaintiff. Former and current congressmen may be found on each side of the issue, as are former members of the Securities and Exchange Commission, America’s foremost financial regulator. Both sides feel an adverse decision will undermine the appeal of participating in America’s stockmarkets.The factual underpinnings of the case are mundane. A charity, known at the time the case was filed as the Archdiocese of Milwaukee Supporting Fund, maintains that Halliburton, which provides services to oil companies, was...



via The Economist: Finance and economics Business Feeds

0 nhận xét:

Post a Comment