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University of Miami Business Law Review

Document Type

Article

Abstract

Social media enables information to travel faster and wider than ever before, creating endless new possibilities. However, it also has opened the door to misinformation or disinformation, which has already wreaked havoc in many industries, including the financial sector. Given the importance of accurate information in banking stability, false information poses a real risk of causing bank runs that lead to bank failures.

This Article documents the risks that false information poses to the banking industry. It then turns its attention to the regulation of false information in securities markets, which has grappled with the issue for many years. Drawing on this regulation—as well as other sources—this Article sketches out a variety of regulatory and legislative solutions that can be applied to the insured depository institution (IDI) context. These solutions are then evaluated for their feasibility.

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