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Fraud on the Market: An Action Without a Cause
by Amanda M. Rose
In response to The Political Economy of Fraud on the Market by William W. Bratton & Michael L. Wachter

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In The Political Economy of Fraud on the Market, Professors William Bratton and Michael Wachter argue that it is time to cut down the infamous “judicial oak” that is the fraud-on-the-market class action (FOTM, to use their lexicon)—time to stop the pointless pruning, and grind the stump itself....In this Response, I do not disagree with any of the core points made in The Political Economy of Fraud on the Market. (My scholarship has similarly emphasized the benefits of shifting away from FOTM to greater reliance on public enforcement mechanisms.) Instead, I take the opportunity to elaborate on the deterrence and governance shortcomings of FOTM, strengthening further the case Bratton and Wachter make for an enhanced public enforcement role. In conclusion, I suggest avenues for overcoming the political hurdles to reform that the authors identify, so that we might someday actually “get there from here.”

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