Deakin University
Browse

File(s) under permanent embargo

Causation in securities and financial product disclosure cases: an analysis and critique

journal contribution
posted on 2019-09-01, 00:00 authored by Ben SaundersBen Saunders
This article critically examines the approach adopted by the courts to causation in securities and financial product disclosure cases, where a plaintiff alleges loss as a result of defective disclosure by a product issuer. The article argues that the reliance approach should be rejected as the sole approach to causation in securities and financial product disclosure cases. The article gives two principal arguments in support of this claim. Firstly, the reliance approach, by insisting that causation may only be established by proving reliance on the disclosure document, implicitly assumes a ‘rational choice’ approach to investor decision-making which, as demonstrated by a significant body of behavioural research, does not accurately reflect the reality of investor decision-making. Secondly, the reliance approach sits at odds with other developments in securities cases and misleading and deceptive conduct jurisprudence. I argue that the courts should recognise that causation may potentially be demonstrated in a variety of ways other than reliance on the disclosure document, including reliance on sources such as communications from financial advisers, newspapers, online sources, briefings, investor roadshows, social media and other marketing practices.

History

Journal

Federal law review

Volume

47

Pagination

494-518

Location

London, Eng.

ISSN

0067-205X

eISSN

1444-6928

Language

eng

Publication classification

C1 Refereed article in a scholarly journal, C Journal article

Copyright notice

2019, The Author(s)

Issue

3

Publisher

Sage Publications

Usage metrics

    Research Publications

    Exports

    RefWorks
    BibTeX
    Ref. manager
    Endnote
    DataCite
    NLM
    DC