The Internet, Securities Regulation, and Theory of Law

Rarely has a change in the environment affected society as dramatically as the Internet. It has transformed the way we retain, transfer, and exchange information. At minimal cost, the Internet offers us far more information at a faster pace than ever before. It enables us to interact around the globe with more people than at any time in the past. When such dramatic environmental changes occur, drastic changes in the law often follow. 1 The Internet affects the environment in which securities markets operate, and the laws that govern them. 2 The use of the Internet has already begun to change the way information about securities is disseminated and the way in which securities are traded, 3 two activities that are regulated by the securities laws. 4 When the environment changes drastically, the gap between law in action and law on the book, between practice and theory, tends to widen. This Article is aimed at bridging this gap. Should the securities laws be adapted to the use of the Internet? If so, how? What path of inquiry should be taken to answer the questions and how should we think about adapting law to a changing environment of actors and actions subject to law? The main purpose of the Article is to begin this inquiry