Document Type
Article
Publication Date
1-2023
Abstract
When a public company releases misleading information that distorts the market for the company’s stock, investors who purchase at the inflated price lose money when (and if) the misleading information is later corrected. Under Rule 10b‑5 of the Securities Exchange Act of 1934, investors can seek compensation from corporations and their officers who make materially misleading statements that the investors relied on when buying or selling a security. Compensation is the obvious goal, but the threat of lawsuits can also benefit investors by deterring managers from committing fraud.
Recommended Citation
Choi, Albert H., Stephen J. Choi, and Adam C. Pritchard. "Giving Shareholders the Right to Say No." Regulation 45, no. 4 (2023): 24-29.
Comments
Reproduced with permission. Please contact the publisher for additional redistribution rights. Originally published as Choi, Albert H., Stephen J. Choi, and Adam C. Pritchard. "Giving Shareholders the Right to Say No." Regulation 45, no. 4 (2023): 24-29.