Private Enforcement of Transparency
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This chapter is about private enforcement of European transparency rules. Reference is to transparency in general terms, meaning mainly issuers’ information to the market (mandatory information) with specific regard to the secondary market. The main issues covered are four. The first one is whether private enforcement is really important, and therefore if it is worth spending time and resources on this issue. The second is whether we have a clear theory of how civil liability should work with reference to liability for misstatements to the market. The third one is whether Europe should follow the US securities class actions experience, or how the warnings that come from the other side of the Atlantic Ocean, which invites Europe not to adopt the US private enforcement system, are to be considered. The fourth one is whether a harmonized approach is advisable and how it can be implemented. In order to deal with these points the chapter proceeds as follows. Section I deals with the rules on civil liability contained in the EU Transparency Rulebook, where I initially consider both primary market (prospectus liability) and secondary market liability, as well as rules concerning auditors’ and rating agencies’ liability. Section II deals with the debate on the importance of private enforcement in financial markets law. Section III investigates the theory of civil liability for misstatements to the market, with particular regard to aftermarket liability. This section covers the issue from the standpoint of the US debate on securities class actions, which is certainly the most important forum where the topic has been addressed and extensively covered. Section IV discusses how the US warnings against US securities class actions are to be considered, and why some form of harmonization in the private enforcement infrastructure is needed in order to improve the quality of the harmonized regulation of capital markets, and how it can be achieved, taking the European Directive on Antitrust damages as a reference point.