In an efficient market, all economically relevant public information about a security is quickly reflected in an unbiased manner in the security's price. False information deceives the market and affects a security's price. The Security and Exchange Commission's Rule 10b-5 states that it is unlawful for anyone to defraud, deceive, or make misrepresentations or omissions to any person in connection with the purchase or sale of a security. Early cases applying fraud-on-the-market theory in the Rule 10b-5 context did not dwell on the meaning of efficiency. More recent cases, however, have focused on the efficiency of a stock market as a broad spectrum. At one end of the spectrum is a heavily traded stock listed on the New York Stock Exchange. Fraud-on-the-market theory should apply to this type of security. All mechanisms for an efficient market are in place: numerous shareholders, active trading, public speculation in the stock, an active public relations department, many institutional investors, market makers, and analysts closely monitoring all activities. At the other end of the spectrum is a regionally traded company with relatively few shareholders who trade infrequently in an over-the-counter market. Fraud-on-the-market theory should not be available to a plaintiff alleging Rule 10b-5 fraud regarding this security. The plaintiff should be required to find another method for asserting reliance because the mechanisms are not in place for information to be efficiently processed. Obviously, there is a large gray area between the two ends of the spectrum in which courts will be faced with the difficult question of determining if a market is efficient. 207 footnotes