Part I of this Article will briefly discuss fraud on the market as a label attached to different factual situations, analyzing Blackie v. Barrack and Shores v. Sklar as two paradigms of the label's application. Part II will discuss the Supreme Court's recent decision in Basic. It concludes that the Court did not analyze definitively fraud on the market, thus leaving open the possibility that a pure causation approach is an appropriate explanation of fraud on the market. The treatment and application of fraud on the market in the lower courts is next analyzed in three groups: those applying Blackie, those applying Shores, and finally those involving a classic form of market manipulation. In each instance, the significance of a pure causation approachis discussed. The Article will conclude that fraud on the market is best used as a means of focusing on causation, and in some situations, dispensing with the reliance requirement.
Black, Barbara, "Strange Case of Fraud on the Market: A Label in Search of a Theory" (1988). Faculty Articles and Other Publications. 80.