Washington Law Review


Ralph K. Winter


In this lecture I propose to differentiate, in a somewhat arbitrary yet analytically helpful way, between four types of investors, and then to consider various issues of corporate and securities law in light of the interests and functions of the different investors. I will style the investors the "Ordinary Investor," the "Speculator," the "Institutional Investor," and the "Entrepreneur in the Market for Management Control." These distinctions are arbitrary because overlap exists between the categories. Moreover, these definitions are not based on how particular investors behave, but on the market functions different kinds of investors perform. Thus, some who consider themselves Ordinary Investors most definitely are Speculators as defined in this lecture. I conclude that the investor least in need of more legal protection is the Ordinary Investor who holds a diversified portfolio and follows a buy-and-hold strategy, and that proposals for further regulation appear principally designed to protect either inefficient speculators or incumbent management.

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