The Effectiveness of Disclosure Law Enforcement in Australia
Forthcoming, Journal of Corporate Law Studies (Volume 21, 2021)
49 Pages Posted: 21 Sep 2020
Date Written: September 1, 2020
This article examines the empirical incidence of the private and public enforcement of disclosure laws in Australia. Disclosure laws aim to ensure the reduction of information asymmetries and the accuracy of share prices, but their success is predicated on enforcement. In order to assess the enforcement landscape, this article presents two new datasets comprising both private class actions (including whether litigation funding is in place) and public enforcement for further examination. In light of these findings, this article addresses the question of whether the Australian system of enforcement is effective, by reference to whether the enforcement actions compensate, deter, and signal. Overall, the empirical analysis confirms the signalling function of enforcement, shows that there is likely to be a reasonable degree of deterrence where directors are targeted, however, that the compensation rationale is not met. This results in a moderately effective enforcement framework with notable room for improvement across both modalities of enforcement.
Keywords: Public and Private Enforcement, Corporate Law, Deterrence, the Australian Securities and Investment Commission, Class Actions, Litigation Funding, Compensation
JEL Classification: G30, G38, K22, K41, K42, N20
Suggested Citation: Suggested Citation