Fraud-on-the-market: een causaliteitstheorie inzake beleggersverliezen (Fraud on the Market - The Requirement of Causation in Investor Suits)
Tijdschrift voor Privaat Recht, Forthcoming
51 Pages Posted: 20 Oct 2011
Date Written: September 28, 2011
Abstract
The possibility to obtain compensation for investor losses has gained substantial importance and attention in recent years, since capital markets across Europe have increasingly attracted smaller investors who have substituted traditional savings products offered by the banks for more risk-bearing financial products traded on financial markets. As a consequence of the internet-bubble at the end of the ’90s and recently the worldwide financial crisis in 2008-09, many investors suffered considerable investment losses, causing legal practice to consider whether and to what extent investor losses can be recovered from financial institutions, intermediaries, issuers and other market participants. Reported case law however shows that investors are struggling to obtain compensation for their claims. One of the problems they find themselves confronted with is the burden of proof regarding the requirement of causation between the alleged wrongful and the damages they claim. In this paper, the requirement of causation, as it is interpreted and applied in the Belgian courts, is analyzed with respect to investor suits following misstatements to the market. Based on the case law analysis, the paper shows that the courts do not deal with the requirement of causation in a very consistent and uniform manner. An alternative concept to deal with the causation requirement is analyzed, drawing comparisons with US securities fraud cases, and particularly with the fraud on the market-theory.
Note: Downloadable document is in Dutch.
Keywords: investor loss, causation, financial disclosure, fraud on the market-theory, financial markets, securities fraud
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