Ore. Is 1st State To Adopt Fraud-On-The-Market Theory

Law360, New York (December 17, 2012, 8:56 PM EST) -- Oregon on Thursday became the first state to adopt the fraud-on-the-market theory, a method used by investors to prove they bought securities based on alleged false statements, as the Oregon Supreme Court revived a $10 million stock-drop case against insurance firm Marsh & McLennan Cos. Inc.

The fraud-on-the-market theory, or FOTM, holds that the price of a stock traded on the open market incorporates all publicly available information. Misstatements about a given stock therefore artificially distort the price, and investors who buy the stock are presumed...
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