Civil Liabilities for False or Misleading Statements Made by Listed Companies to the Securities Markets in Singapore

• Main Author: WAN, Wai Yee
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2008
• Subjects: Asian Studies; Business Organizations Law
• Online Access: https://ink.library.smu.edu.sg/sol_research/812; https://ink.library.smu.edu.sg/context/sol_research/article/1811/viewcontent/CivilLiabilities_MisleadingStatements_Singapore_2008_afv.pdf
• Institution: Singapore Management University

This article examines the scope and efficacy of the civil remedies available to investors against listed companies which have made false or misleading statements in the secondary securities market in Singapore, both at common law and the statutory compensation scheme under the Securities and Futures Act. It argues that there are a number of limitations faced by such investors in bringing claims founded in tort law against the listed companies. While the statutory compensation scheme attempts to improve the position of investors, there are a number of deficiencies in the scheme the most significant of which is the ceiling on the overall damages recoverable against the contravening listed companies. These deficiencies largely stem from the fact that the scheme is strongly influenced by the desire to achieve optimal deterrence rather than compensation. This article argues that the aim of the statutory compensation scheme should be clarified and that it should be founded on compensation for losses incurred by investors in having relied on the false or misleading statements and not on optimal deterrence. Reforms are suggested to the statutory compensation scheme to achieve this aim.