Global Securities Litigation and Enforcement (Preface and Table of Contents)

Global Securities Litigation and Enforcement addresses the issue of compensation of investors’ losses on securities markets due to misrepresentations. The book provides an in-depth analysis of the enforcement securities law, especially civil liability and litigation, covering 29 jurisdictions on all Continents. The book contributes to the debate on whether public or private enforcement is preferable. The New Deal securities legislation in the US based on the motto of Louis Brandeis that ‘sunlight is said to be the best of disinfectants; electric light the most efficient policeman’ has become the international model based on the principle of disclosure. As to public enforcement, the US model of enforcement by an administrative authority, acting through administrative or judicial courts, has spread around the world. The Securities and Exchange Commission (SEC), established in 1934, has become the international benchmark. Reports promoting ‘international best practices’, such as the 1998 of the International Organization of Securities Commission (IOSCO) Objectives and Principles of Securities Regulation as well as the International Monetary Fund’s Financial System Stability Assessments (FSAP), have also contributed to the spread of the SEC model. As to private enforcement, civil liability under securities law has also been a very important aspect of US corporate governance, especially in the form of securities class actions. Securities class actions rose to prominence after the Supreme Court’s decision in Basic v. Levinson in 1988 that established the fraud-on-the-market theory. However, securities lawsuits have become more difficult in recent years. This concerns, in particular, listed companies not traded in US stock exchanges. While courts previously often permitted such suits under the ‘conduct and effects test’, with the case of Morrison v. National Australia Bank in 2010 it has become more difficult to sue foreign issuers in US courts. This has reduced the availability of US courts to foreign investors and raised the pressure on foreign legislators to provide remedies in their own jurisdictions.