Warning

Info

Warning

Info

Warning

Info

LSDefine

Simple English definitions for legal terms

fraud-on-the-market theory

Read a random definition: dispunishable

A quick definition of fraud-on-the-market theory:

Fraud-on-the-market theory: This is a theory that says if someone lies about a company and the lie is important, it can affect the price of the company's stock. This theory is often used in lawsuits where people say they lost money because someone lied about a company. The court says that if the lie was important and lots of people knew about it, then anyone who bought or sold the stock during that time can sue. This is because people who buy and sell stocks rely on the price being fair, and if someone lies, it can make the price unfair.

A more thorough explanation:

Fraud-on-the-market theory is a legal concept that says if a company makes a false or misleading statement that affects its stock price, investors who bought or sold the stock can sue the company for securities fraud. This theory is often used in class action lawsuits where a large group of investors claim they were harmed by the company's actions.

For example, let's say a company announces that it has discovered a new product that will revolutionize the industry and cause its stock price to soar. However, the company knows that the product doesn't actually exist and is lying to investors. When the truth comes out, the stock price drops, and investors who bought the stock based on the false information lose money. Under the fraud-on-the-market theory, these investors could sue the company for securities fraud.

The fraud-on-the-market theory was established by the Supreme Court in the case of Basic v. Levinson in 1988. The Court ruled that investors who traded in a company's stock during a period when false or misleading information was publicly available could be presumed to have relied on that information, even if they didn't know about it directly. This made it easier for investors to bring securities fraud lawsuits against companies.

fraud in the inducement | fraudulent concealment

Warning

Info

General

General chat about the legal profession.
main_chatroom
👍 Chat vibe: 0 👎
Help us make LSD better!
Tell us what's important to you
medicine is a scam
join the ethically ambiguous legal field instead
Dkk
18:57
I want to meet an attorney that defends clients who run into flat earth problems. I want an attorney that knows and believes in flat earth theory.
19:05
i want a flat earther for president. i want a guy who posts on 4chan for president. i want someone who mogs for president.
Dkk
19:18
Exactly. My version of that awful poem.
Dkk
19:19
I can accept a president with maybe one or two of the poems traits hut good God, all of them??? No ty.
windyMagician
19:20
president who respects sex is crazy
windyMagician
19:20
we had bill clinton already
Dkk
19:21
Bill Clinton, first and last black president
windyMagician
19:23
I want to go running but my leg feels weird
windyMagician
19:23
it doesn't hurt its just tingly
Dkk
19:26
It needs more alcohol. You tingle when your nerves need watering.
19:27
try stretching it maybe to see what's up
windyMagician
19:27
stretches make me think it's just soreness
windyMagician
19:27
I'm sober lol
Dkk
19:38
Anyone else get the google notification that your LSD password has been compromised lol. LSD got hacked.
20:48
what.jpg @Dkk
CynicalOops
21:03
You think you just fell out of a coconut tree?
jackfrost11770
21:10
nope dk
CynicalOops
22:37
Calvinamala Harris
jackfrost11770
23:16
should i start using letterboxed again
Dkk
23:25
@jackfrost11770: if you want but like it aint for me
dk do u ever eat at bk
Dkk
23:48
@chickenburgahfart: I would do that in the Army if really desperate for food or if I had to work through lunch. One of the few fast food places I go to.
bk so slept on
Dkk
0:23
I will take In N Out everyday over it when I can though.
texaslawhopefully
1:22
In N Out is not only the best fast food place, but the prices too are fantastic
Dkk
1:27
Indeed, indeed.
LSD+ is ad-free, with DMs, discounts, case briefs & more.