Securities Regulation
Intermediate
Efficient Capital Markets
A theory that market prices can incorporate available information quickly, though the strength and legal implications of that claim vary by context.
Why It Matters
The idea informs disclosure policy, fraud-on-the-market reasoning, event studies, market manipulation analysis, and securities damages.
Selected Literature
A short list of directly relevant archive entries.
1970
Introductory
1980
Advanced
Accuracy of Predictions in the Event Study Methodology
Stephen J. Brown and Jerold B. Warner
Journal of Financial Economics
1980
Introductory
On the Impossibility of Informationally Efficient Markets
Sanford J. Grossman and Joseph E. Stiglitz
American Economic Review
1984
Advanced
Related Cases
1946
Securities Regulation
SEC v. W.J. Howey Co.
328 U.S. 293 (1946)
Definition of an investment contract under the federal securities laws.
1953
Securities Regulation
SEC v. Ralston Purina Co.
346 U.S. 119 (1953)
Whether an issuer's unregistered stock offers to employees qualified as transactions not involving a public offering.
1963
Securities Regulation
SEC v. Capital Gains Research Bureau, Inc.
375 U.S. 180 (1963)
Whether an investment adviser's undisclosed practice of trading before and after its recommendations could be enjoined under the Investment Advisers Act.
1968
Securities Regulation
SEC v. Texas Gulf Sulphur Co.
401 F.2d 833 (2d Cir. 1968) (en banc)
Trading while in possession of material nonpublic information and the accuracy of corporate statements about a major mineral discovery.