On Financial Markets, Directors, and Liability

Abstract

The paper attempts to furnish a general view of the questions about false informations in the secundary market. The method used is comparative, considering specially the U.S. and german law. After a brief consideration of the efficient capital market hypothesis, the paper analyzes the characteristics of the financial markets as impersonal media between investors and corporations. Thereafter it considers the questions about transaction causation and loss causation and, having regard to the general functions of the duty of disclosure, shares the diffuse opinion which limit the compensation to the deep-of-pocket-losses. Finally it examines the question whether the corporations or the directors or both should be liable, and considers the peculiar rule in article 2395 of the italian civil code in the context of the general discussion concerning the merits of an internal or external liabilty regime of the directors.