Legal Dictionary of Pakistan

fraud-on-the-market principle

Securities. The doctrine that, in a claim under the antifraud provisions of the federal securities laws, a plaintiff may presumptively establish reliance on a misstatement about a security's value -without proving actual knowledge of the fraudulent statement - if the stock is purchased in an open and developed securities market. This doctrine recognizes that the market price of an issuer's stock reflects all available public information. The presumption is rebuttable. -Also termed fraud-on-the-market theory. frauds, statute of. See STATUTE OF FRAUDS.