# kaal:claim:1664809-018

**Claim.** Applying section 10(b) and Rule 10b-5 together with the fraud on the market theory substantially increases the potential liability of issuers and can lead to questionable results, which is why EU jurisdictions may not want that rule applied to their securities markets.

**Type.** failure  **Support.** argued

**Holds when.**

- securities markets subjected to US antifraud litigation

**Source quote.**

> theory substantially increases the potential liability of issuers and

**From.** Richard W. Painter, Wulf A. Kaal, *Extraterritorial Application of US Securities Law – Will the US Become the Default Jurisdiction for* (2010), 4.1. European Jurisdictions and European Companies, page 4

**Cite as.** Richard W. Painter, Wulf A. Kaal, Extraterritorial Application of US Securities Law – Will the US Become the Default Jurisdiction for (2010). SSRN: https://ssrn.com/abstract=1664809

**Verify.** sha256 of source PDF `2d5c8c30f969f8eb613bfa1fe6888a7cfa1a452e1027bcda0489618ceac62c20` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Painter%20and%20Kaal%20-%202010%20-%20Extraterritorial%20Application%20of%20US%20Securities%20Law%20%E2%80%93%20Will%20the%20US%20Become%20the%20Default%20Jurisdiction%20for.pdf

**Failure mode.** inflated-issuer-liability  (family: compliance-cost-and-barrier-to-entry)

**Topics.** law-and-legal-systems, economics, risk-and-incentives

**Keywords.** issuer-liability, fraud-on-the-market, section-10b, eu-markets, litigation-risk

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