This is mostly a theory of U.S. law. It is also not an exactly accurate statement of U.S. law, and sometimes courts actually reject everything-is-securities-fraud theories, but it is a good practical tool for predicting whether a scandal at a U.S. public company will lead to a securities-fraud lawsuit. It always predicts that the answer will be “yes,” and the answer is always “yes.”
But of course lots of public companies are not U.S. public companies, because they are in other countries. Is everything that they do securities fraud? Well, other countries occasionally seem tempted by the U.S. approach, but generally the U.S. is well ahead of everywhere else in making everything securities fraud. But it’s so far ahead that things that foreign companies do abroad might still be U.S. securities fraud.
‘Enforcement 40’ for 2020
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