Comment by Will Morrow
This Comment discusses legal responses to both active Internet fraud and the Internet's passive impact on procedure. First, the perpetration of fraud via the Internet is discussed in Part II. The details of Internet fraud are rarely novel. Generally, the perpetrator is simply employing a new medium for the scam. Government and judicial approaches to the problem, however, are often more novel and interesting. Regulatory agencies and SROs are beginning to attack the problem. Their approaches will be discussed in the context of the ability to meet the challenge.
Part III discusses the Internet's role as a procedural bar to securities fraud complaints. The role of the Internet within the public domain is material to this issue. One approach to this role is established via comparison and contrast of the Internet and traditional sources of public domain information. This comparison involves five separate attributes. The Internet's impact on inquiry notice is discussed in the context of the Whirlpool case. Lastly, an approach for reducing the courts' broad stance on the public domain is discussed. This approach purports to take the identified variances between the Internet and traditional sources into account.
Part IV will investigate the impact of the Internet on the concept of equitable estoppel in suits under Rule 10b-5. To the extent that estoppel is allowed, Whirlpool treats the Internet exactly the same as in issues involving a statute of limitation. The conclusion is that application of the Internet to equitable estoppel is consistent with its role in the public domain. Such application should employ the approach mentioned above for quality of the information. This is necessary to balance the use of inquiry, as opposed to actual, notice and grant investors some protection from fraud.
About the Author
Will Morrow. B.A. 1992, Vanderbilt University; M.B.A. 1994, University of Alabama; J.D. 1998, Tulane Law School.
Citation
72 Tul. L. Rev. 2203 (1998)