An Economic Analysis of Australian Damage Remedies for Misleading Prospectuses: Trade Practices Act vs. Corporations Law

R. Pitchford

CEPR Discussion Papers from Centre for Economic Policy Research, Research School of Economics, Australian National University

Abstract: Laws that address damages caused by deceptive or misleading prospectuses impact on the incentive issuers face to create such prospectuses, and hence impact on the level of investment. In Australia, it has been proposed to shift from a strict liability regime under s52 of the Trade Practices Act, to a due diligence regime under the Corporations Law. I argue that due diligence is inferior to strict liability for large firms, but in some cases may be preferred to strict liability for small firms.

Keywords: LAW; INVESTMENTS; CORPORATIONS (search for similar items in EconPapers)
JEL-codes: K13 K22 (search for similar items in EconPapers)
Pages: 13 pages
Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:auu:dpaper:377

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