A key economic question in securities litigation is how to determine the amount of harm that can be attributed to alleged misstatements and that may be considered as damages. Securities litigation and the legal frameworks around the determination of damages have been developing in different jurisdictions in Europe over the past ten years.
This white paper provides a brief overview of the classical approach to determining damages that is prevalent in many European jurisdictions; describes the alternative framework called ‘Fraud on the Market’ that has been commonly accepted in US courts; summarizes the evolving state of legal frameworks in some of the leading European jurisdictions; and explains the economics and practicalities of calculating inflation damages.
Associated People
A. Mitchell Polinsky V.
PrincipalProfessor Polinsky has expertise in financial markets, securities fraud, and complex financial litigation.
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Alex Edmans
AffiliateProfessor Edmans has expertise in financial markets, securities fraud, and complex financial litigation.
Amalia Rebecca Miller
AffiliateProfessor Miller is an economist whose research interests include public finance, labor economics, health economics, and industrial organization. Her research has covered Medicaid expansion, workplace competition and labor supply, financing of employment-based health insurance plans, and effects of COVID-19 shutdowns, among other topics. She has received research funding from the US National Science Foundation (NSF), National Institutes of Health (NIH), Agency for Healthcare Research and Quality (AHRQ), and Department of Defense (DoD). Professor Miller is an associate editor of The Leadership Quarterly and the ILR Review, and has published articles in peer-reviewed journals, such as the Journal of Labor Economics, the Journal of Health Economics, The Journal of Human Resources, and The Review of Economic Studies. She served two terms on the board of the American Economic Association’s Committee on the Status of Women in the Economics Profession. Professor Miller is a recipient of the Excellence in Reviewing Certificate from Labour Economics, the IZA Young Labor Economist Award, and the WHITE Award for Best Paper on Health IT and Economics. Professor Miller has also worked as an economist with the RAND Corporation.