Rule 10b-5 as an Adaptive Organism

In this Article, Professor Langevoort examines the adaptive qualities of Rule 10b-5 and how the rule has remained intact despite sweeping changes in the intellectual and political landscapes in which it operates. In Professor Langevoort's view, Rule l0b-5's survival is largely due to the flexibility of its language which has enabled the rule to embrace malleable social perceptions of the securities market and the securities business. Professor Langevoort also addresses the question of whether Rule l0b-5 has outlived its usefulness and should therefore be repealed and replaced by more precisely-drafted legislation. Professor Langevoort concludes that Rule l0b-5's continued survival is indeed appropriate in light of society's incomplete understanding of how investors make decisions.

Professor Langevoort further concludes that a complete revision of Rule 10b-5 is highly unlikely-in part because the ambiguity of the rule's present language provides an attractive alternative to the difficult risk allocation decisions that would have to be made by lawmakers in formulating substitute legislation.