Download this Paper Open PDF in Browser

The U.S. Securities Fraud Class Action: An Unlikely Export to the European Union

41 Pages Posted: 26 Feb 2013  

Manning G. Warren III

University of Louisville - Louis D. Brandeis School of Law

Date Written: September 1, 2012

Abstract

Although the EU has achieved an impressive degree of harmonization in the securities laws of its member states, it has not yet advanced any effective collective private remedies for violations of those securities laws. This is especially noteworthy since the U.S. Supreme Court's decision in Morrison v. National Australia Bank left many defrauded European investors without access to the U.S. class action remedy, which previously had been the only meaningful collective redress mechanism available to European investors. Recently, the European Commission has made it clear that if it were to adopt a collective redress mechanism, the U.S. class action remedy would serve as a model of what not to do. This article explores the viability of the U.S.-style securities fraud class action in the EU. It first examines the rise of the securities fraud class action device in the U.S. and subsequent legislative and judicial restraints on investors' ability to utilize the mechanism. The article then discusses the cultural views and judicial principles inherent in the European litigation system that serve as significant barriers to member states' adoption of a U.S.-style class action procedure. Finally, the article concludes that aside from episodic successes achieved by industrious U.S. plaintiff lawyers pursuing collective relief in the Netherlands, the U.S.-style securities fraud class action is unlikely to become a viable mechanism for providing European access to justice for defrauded investors.

Keywords: securities, securities fraud, class action, European Union, export, securities litigation model, securities fraud class action, collective redress, collective private remedies, EU member states, supranational remedy, harmonization

JEL Classification: F30, F33, F36, F39, G10, G15, G18, G19, G30, K41, N4

Suggested Citation

Warren, Manning G., The U.S. Securities Fraud Class Action: An Unlikely Export to the European Union (September 1, 2012). 37 Brooklyn Journal of International Law 1075; University of Louisville School of Law Legal Studies Research Paper Series No. 2013-10. Available at SSRN: https://ssrn.com/abstract=2221876

Manning G. Warren III (Contact Author)

University of Louisville - Louis D. Brandeis School of Law ( email )

Wilson W. Wyatt Hall
Louisville, KY 40292
United States

Paper statistics

Downloads
128
Rank
188,678
Abstract Views
628