On the Internet and Legal Theory : the Internet , Securities Regulation , and Theory Of

... Rarely has a change in the environment affected society as dramatically as the Internet. ... Further, the Internet environment is particularly conducive to the creation and enforcement of customary law. ... B. The Commission's Response to the Internet Environment: Substance, Enforcement, Mechanisms for Change, and Methods of Change ... The law was adapted to the changing environment of the Internet by allowing its use (and its advantages) while maintaining the values and policies underlying the securities laws. ... Thus, securities law enforcement has used the new technology; for example, the Commission has established areas on its Internet site where investors can inform the Commission about violations of the law and ask questions from the staff. ... Because the Internet can be used to exchange information, it can be used as a forum for securities trading, similar to securities exchanges. ... If traditional intermediaries disappear and no mechanism fills the void, it is likely that trading-site markets will not continue to function, as investors find their trade agreements ineffective and too costly to enforce. ... B. Securities Lawmakers' Response to the Internet Environment: Substance, Enforcement, Mechanisms for Change, and Methods of Change ... First, nothing concerning trading sites suggests that the fundamental policies of ensuring investor confidence and facilitating capital should be changed. ...