{
 "@context": "https://schema.org",
 "@type": "DefinedTerm",
 "@id": "https://wulfkaal.github.io/entities/fraud-on-the-market",
 "identifier": "kaal:entity:fraud-on-the-market",
 "name": "Fraud on the market",
 "termCode": "fraud-on-the-market",
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  "@id": "https://wulfkaal.github.io/entities/index.json"
 },
 "author": {
  "@type": "Person",
  "name": "Wulf A. Kaal",
  "identifier": "https://orcid.org/0000-0003-0757-275X"
 },
 "dateModified": "2026-07-29",
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 "sha256": "890422f514ba54f058d9c7cbc131a60bc7bed5f0a4186e47aa8c2c2aadca66db",
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   "value": "derived"
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   "value": 6
  },
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   "value": 2
  },
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   "@type": "PropertyValue",
   "name": "year_span",
   "value": [
    "2010",
    "2012"
   ]
  },
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  }
 ],
 "subjectOf": [
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/1664809-017",
   "identifier": "kaal:claim:1664809-017",
   "text": "In US securities class actions plaintiffs may proceed on the fraud on the market theory rather than proving actual reliance on misleading statements, an approach that has been rejected in most other countries.",
   "abstract": "theory' rather than requiring plaintiffs to prove actual reliance on",
   "citation": "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",
   "datePublished": "2010",
   "claim_type": "definitional",
   "confidence": "evidenced",
   "is_failure_mode": false,
   "scope_conditions": [
    "US securities class actions under section 10(b) and Rule 10b-5"
   ],
   "source_pdf_sha256": "2d5c8c30f969f8eb613bfa1fe6888a7cfa1a452e1027bcda0489618ceac62c20",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/1664809-018",
   "identifier": "kaal:claim:1664809-018",
   "text": "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.",
   "abstract": "theory substantially increases the potential liability of issuers and",
   "citation": "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",
   "datePublished": "2010",
   "claim_type": "failure",
   "confidence": "argued",
   "is_failure_mode": true,
   "scope_conditions": [
    "securities markets subjected to US antifraud litigation"
   ],
   "source_pdf_sha256": "2d5c8c30f969f8eb613bfa1fe6888a7cfa1a452e1027bcda0489618ceac62c20",
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  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/2029983-013",
   "identifier": "kaal:claim:2029983-013",
   "text": "Because Section 929P did not restore private rights of action, the most powerful weapon in plaintiffs' arsenal, the fraud-on-the-market theory in class actions, is thwarted wherever the transaction took place outside the United States.",
   "abstract": "most powerful weapon in plaintiffs' arsenal, the fraud-on-the- market theory in class actions, is thus thwarted in those in- stances where transactions are outside the United States.",
   "citation": "Wulf A. Kaal, Richard W. Painter, Forum Competition and Choice of Law Competition in Securities Law after Morrison v. National Austral (2012). SSRN: https://ssrn.com/abstract=2029983",
   "datePublished": "2012",
   "claim_type": "failure",
   "confidence": "argued",
   "is_failure_mode": true,
   "scope_conditions": [
    "private class actions over non-U.S. transactions",
    "SEC and DOJ actions remain possible"
   ],
   "source_pdf_sha256": "fde2ff611420eb283cbb49a6b681a2ae8efa2b4603ae71480e2d91483f0295f2",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/2029983-017",
   "identifier": "kaal:claim:2029983-017",
   "text": "The requirement that each plaintiff show individual reliance, followed in most jurisdictions outside the United States, is not merely a substantive difference: it undermines collective litigation because class procedures work only when plaintiffs share common questions of law and fact.",
   "abstract": "This difference in substantive law has an impact on procedural issues because class action lit- igation and collective procedures are easier if plaintiffs in the class share common questions of law and fact.",
   "citation": "Wulf A. Kaal, Richard W. Painter, Forum Competition and Choice of Law Competition in Securities Law after Morrison v. National Austral (2012). SSRN: https://ssrn.com/abstract=2029983",
   "datePublished": "2012",
   "claim_type": "mechanism",
   "confidence": "argued",
   "is_failure_mode": false,
   "scope_conditions": [
    "jurisdictions that reject the fraud-on-the-market theory"
   ],
   "source_pdf_sha256": "fde2ff611420eb283cbb49a6b681a2ae8efa2b4603ae71480e2d91483f0295f2",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/2029983-018",
   "identifier": "kaal:claim:2029983-018",
   "text": "Despite signs of movement in that direction, there is as yet no genuine European substitute for the U.S. securities class action brought under the fraud-on-the-market theory.",
   "abstract": "There are some signs that European law could be moving in this direction, although thus far there is no genuine Europe- an substitute for the U.S. securities class action under the fraud-on-the-market theory.",
   "citation": "Wulf A. Kaal, Richard W. Painter, Forum Competition and Choice of Law Competition in Securities Law after Morrison v. National Austral (2012). SSRN: https://ssrn.com/abstract=2029983",
   "datePublished": "2012",
   "claim_type": "failure",
   "confidence": "argued",
   "is_failure_mode": true,
   "scope_conditions": [
    "as of the article's 2012 assessment of European collective procedures"
   ],
   "source_pdf_sha256": "fde2ff611420eb283cbb49a6b681a2ae8efa2b4603ae71480e2d91483f0295f2",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/2029983-027",
   "identifier": "kaal:claim:2029983-027",
   "text": "Because the Dutch Supreme Court's World Online presumption of reliance can be extended to ad hoc disclosure violations and misleading periodic reports, the Dutch legal system could compete effectively with the United States by lowering the crucial reliance threshold in securities actions.",
   "abstract": "These developments suggest that the Dutch legal system could effectively compete with the United States, at least as it pertains to lowering the crucial threshold re- quirement of reliance in securities actions.",
   "citation": "Wulf A. Kaal, Richard W. Painter, Forum Competition and Choice of Law Competition in Securities Law after Morrison v. National Austral (2012). SSRN: https://ssrn.com/abstract=2029983",
   "datePublished": "2012",
   "claim_type": "mechanism",
   "confidence": "argued",
   "is_failure_mode": false,
   "scope_conditions": [
    "Dutch courts extend World Online beyond prospectus liability"
   ],
   "source_pdf_sha256": "fde2ff611420eb283cbb49a6b681a2ae8efa2b4603ae71480e2d91483f0295f2",
   "status": "current"
  }
 ],
 "description": "6 claims in the published works of Wulf A. Kaal carry the concept tag 'fraud-on-the-market'. Derived node: a roster, not an adjudicated definition."
}