Revisiting "Truth in Securities": The Use of the Efficient Capital Market Hypothesis

This article evaluates the imbalance between the application of the "efficient capital market hypothesis" to the registration and antifraud provisions of the Securities Act of 1933 and the Securities and Exchange Act of 1934, respectively. The article argues that narrowing thediscrepancy in the application of the theory through a combination of expanding the integrated disclosure system and reducing the application of the "fraud on the market" theory of investor reliance would help provide a more viable system that would balance the interests of short term investors, long term investors and companies using the capital markets.