Information in Capital Markets and Investor Safeguards (Información en el Mercado de Valores y Tutela del Inversor)

Abstract:     
How to prevent or ameliorate informative inefficiencies in capital markets that result in an improper price formation? Specifically, how to avoid the possibility of public companies or stockbrokers lying or not providing relevant information to the market? What role do market self-regulation and government regulation play in this context? The article strives to answer these questions by analyzing the diverse available remedies - by reviewing the abundant specific American doctrine - and finally proposing an intermediate solution, combining market self-regulation with government regulation (by also denouncing the inexistence of “perfect models”, that ignore the agent’s liberty). The preventive contribution of (civil and criminal) sanctions is especially reviewed, offering a cost-benefit analysis, typical of classic models of law and economics theory.

Number of Pages in PDF File: 27

Keywords: Capital markets, false information, informative efficiency and asymmetry, sanctions, legislative and market policies, investor safeguards, economic analysis of law

Accepted Paper Series