fraud on the market theory

noun
fraud on the market the·​o·​ry

Legal Definition of fraud on the market theory

: a theory of liability in securities fraud cases: a defendant's material misrepresentation regarding a security traded in the open market that affects the price of the security is presumed to have been relied on by a plaintiff who purchased the security and suffered a loss — compare efficient market

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“Fraud on the market theory.” Merriam-Webster.com Legal Dictionary, Merriam-Webster, https://www.merriam-webster.com/legal/fraud%20on%20the%20market%20theory. Accessed 15 Jan. 2021.

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