Pérez-Llorca organised a conference on securities litigation, discussing the economic and legal foundations of this type of litigation from both a Spanish and a comparative law perspective. The session was led by Fernando Bedoya and Javier Tarjuelo, Litigation and Arbitration partner and lawyer at Pérez-Llorca, Teresa Méndez, Commercial Law partner at Pérez-Llorca, and Alberto Thomas, founding partner of Fideres Partners.
Fernando Bedoya, who acted as moderator, analysed litigation related to securities markets, a practice not yet widespread in Spain, but very present in other countries. Bedoya highlighted the possibilities offered by Spanish law for investors who are adversely affected, as well as the risks involved for listed companies. “The sophistication of the Spanish market will lead to increased litigation in the future,” Bedoya said.
From an economic perspective, Alberto Thomas introduced the two main types of cases that occur in practice: takeover bids and the dissemination of false information in the market. From the presentation of precedents, Thomas commented on the rationale and key aspects of these cases worldwide, where correct price formation, market efficiency and transparency of company communications are elements sought in different jurisdictions. For Fideres’ founding partner, “more and more institutional investors are embarking on securities litigation cases in order to meet their fiduciary and ESG obligations.”
Teresa Méndez then addressed the cases of takeover bids from a legal perspective in Spain. The key element, Méndez stressed, is the National Securities Market Commission (“CNMV”) agreement approving the price offered to shareholders in takeover bids. The Pérez-Llorca partner stated that “the challenge to this agreement is what mainly gives rise to litigation in the contentious-administrative courts.” Méndez examined the price requirements applicable to the different types of takeover bids (mainly mandatory, exclusionary and voluntary takeover bids), as well as the standing of claimants when the investment is made through swaps.
In this regard, Alberto Thomas took the opportunity to explain in greater detail how, in the international sphere, the challenge to the price at which shares are offered is produced, and what the methodologies are for quantifying the damage in economic terms for shareholders, highlighting the method of discounting future profit flows. Javier Tarjuelo noted the possibility that shareholders who have suffered damage could take civil action instead of limiting their claims to administrative litigation.
Tarjuelo also analysed the legal basis for cases where false information is disseminated to the market, with an emphasis on the legal actions available to investors harmed by such information, either through share issue prospectuses or in companies’ periodic financial reporting.
To conclude the session, Alberto Thomas provided an economic perspective on the calculation of damages in this type of action on the international scene, as well as the main challenges faced by claimants and respondents in practice. In addition, Teresa Méndez discussed how market participants can structure their transactions to reduce the risk of this type of litigation. Lastly, Fernando Bedoya, who accompanied the speakers’ contributions with reflections and comments, opened the floor to a Q&A session.