Decision on Liability for the Prospectus and Causation

Facts

The decision concerns a liability action for the prospectus brought by two investors (the claimants) against the members of the board of directors of a public limited company (the defendants) following the bankruptcy of that company. The claimants purchased shares of the company at the time of its IPO and suffered significant losses upon the bankruptcy. They allege that the prospectus contained misleading and incomplete information that misled them in their decision to purchase.

Considerations

The Federal Tribunal ruled that, to establish the causal link between the information in the prospectus and the damage suffered by the investors, the required standard of proof is not absolute certainty, but a preponderance of probability. Thus, the claimants do not have to provide strict proof of the causal sequence of events, but only to establish a preponderance of probability. The Federal Tribunal considered that the…