Fraud on the Market: An Action Without a Cause

In this Response, I do not disagree with any of the core points made in The Political Economy of Fraud on the Market. (My scholarship has similarly emphasized the benefits of shifting away from FOTM to greater reliance on public enforcement mechanisms.) Instead, I take the opportunity to elaborate on the deterrence and governance shortcomings of FOTM, strengthening further the case Bratton and Wachter make for an enhanced public enforcement role. In conclusion, I suggest avenues for overcoming the political hurdles to reform that the authors identify, so that we might someday actually “get there from here.”

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