The Maintenance Theory of Inflation in Fraud-on-the-Market Cases

摘要

An important question in securities fraud cases that has never been squarely addressed by the U.S. Supreme Court is whether a plaintiff must establish that a company's stock price experienced an immediate increase after the company or its officers made a material misrepresentation to the market so as to evidence the inflationary impact on the security. This question is arising more and more in Section 10(b) actions in which plaintiffs allege a series of false statements which occur over a protracted period of time—in some cases years—that have the effect of maintaining a fraud on the market by keeping the stock price artificially propped up but without actually increasing the stock price.