April 28, 2009
Although restricting free market principals circumvents the underlying ideology of an efficient market, it appears today that it is necessary to maintain a fair an efficient market. The rational behind this statement is two fold.
One, the climate of the markets today are controlled by few not many. Few fund managers control a substantial portion of the total markets' assets, versus the many individual investors an efficient market requires. This alone distorts the power ratio in the market place from many to few.
Two, the advances in telecommunications has created a real-time reaction to company news, whether#8194official or unofficial. Media outlets are not required to corroborate unofficial company information.
Thus, one can conclude the markets can be directly influenced by inaccurate information because a few fund managers were swayed. Before the information can be corroborated, a company can see it's stock plummet.