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Fictitious fraud: economics and the presumption of reliance1

Published online by Cambridge University Press:  16 December 2013

Randy D. Gordon
Randy D. Gordon*
Affiliation:
Gardere Wynne Sewell LLP and Southern Methodist University
*
[email protected]
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Abstract

In the popular imagination, legal proceedings and their rules of law are thought of as paths to unalloyed truth. Both practitioners and scholars know this is often not the case because the law is, as are other domains, riddled with fictions. Indeed, the law sometimes borrows fictions from other domains to help it achieve results that would otherwise be unobtainable. One such place is securities law, in which courts in the United States have borrowed the concept of the ‘efficient market’ from economics to make fraud class actions possible. But that concept is – if not wholly – at least in good measure fictional.

Type
Research Article
Information
International Journal of Law in Context , Volume 9 , Issue 4 , December 2013 , pp. 506 - 519
Copyright
Copyright © Cambridge University Press 2013 

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Footnotes

1

This paper has its genesis in a paper presented at a seminar on ‘Legal Fictions’ at the IVR 2011 World Congress. Thanks to Maks Del Mar for organising the seminar and for many helpful suggestions along the way.

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