Eliminating the Non-Trading Issuer’s Duty to Update: A Proposal to Amend 10b-5

Monday, January 1st, 1990 at 12:00 am by Michael Prozan
Michael Prozan, Eliminating the Non-Trading Issuer’s Duty to Update: A Proposal to Amend 10b-5, 1990 Colum. Bus. L. Rev. 339

This article will first examine the original distinction between fraud to individual investors and deceit to the market in general as it was embodied by Congress in Sections 10(b) and 18 of the Exchange Act. Part II then traces, through court decisions and Commission releases, how the creation of an implied duty to update through Rule 10b-5 has blurred that distinction. Finally, Part II argues that the distinction is still worth making and offers an amendment to Rule 10b-5 that will facilitate the change.

Author Information

Senior Attorney, Division of Corporation Finance, United States Securities and Exchange Commission. The author has also served as a Special Assistant United States Attorney in the District of Columbia