June Rhee, The Harvard Law School Forum on Corporate Governance and FInancial Regulation, here.
In order to prove securities fraud under federal law, one must show that the defendant either misrepresented a material fact or omitted to state a material fact when under a duty to speak. The fact must somehow matter to investors. But the courts have struggled mightily to determine when a fact is material.
Matt Levine is right, what if the investor is an algorithm? What are the standards of materiality to a reasonable algorithm versus a reasonable investor?