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Pérez-Llorca and Fideres analyse the risks and opportunities of litigation arising from investments in listed companies  

July 3, 2024

Pérez-Llorca has organised a conference focused on litigation arising from investments in the securities market (securities litigation), in which the economic and legal bases of this type of litigation were discussed, both from a Spanish perspective and from a comparative law perspective.

The session was hosted by Fernando Bedoya and Javier Tarjuelo, partner and litigation and arbitration lawyer at Pérez-Llorca, Teresa Méndez, commercial partner at Pérez-Llorca, and Alberto Thomas, founding partner of Fideres Partners.

Fernando Bedoya, who acted as moderator, analysed litigation relating to securities markets, a practice that is not yet widespread in Spain but is very present in other countries. Bedoya highlighted the opportunities offered by Spanish law for aggrieved investors and the risks for listed companies. "The sophistication of the Spanish market will lead to an increase in such litigation in the future," said Bedoya

From an economic point of view, Alberto Thomas presented the two main types of cases that occur in practice: takeover bids and the dissemination of false information to the market. Based on the presentation of precedents, Thomas commented on the fundamentals and key aspects of these cases worldwide, where the correct formation of prices, market efficiency and transparency of corporate communications are elements that are sought in the different jurisdictions. For the founding partner of Fideres, "more and more institutional investors are engaging in securities litigation to meet their fiduciary and ESG obligations".

Teresa Méndez then looked at takeover bids from a legal perspective in Spain. The key element, according to Méndez, is the CNMV resolution approving the price offered to shareholders in takeover bids. "The challenge to this agreement is the main cause of litigation in the contentious-administrative courts," said the partner at the firm. Méndez examined the price requirements applicable to the different types of takeover bids (mainly mandatory, delisting and voluntary takeover bids), as well as the standing of claimants when the investment is made through swaps. 

In this line, Alberto Thomas took the opportunity to explain in more detail how the challenge to the price at which the shares are offered is carried out in the international sphere, and what the methods are for calculating the economic damage to the shareholders, highlighting the method of discounting future income flows.

Javier Tarjuelo commented on the possibility for aggrieved shareholders to resort to civil proceedings instead of limiting their claims to administrative proceedings. Mr Tarjuelo also analysed the legal bases for cases of dissemination of false information to the market, highlighting the remedies available to investors harmed by fraudulent information disseminated to the market, whether through share issue prospectuses or in companies’ periodic financial information.

To conclude the session, Alberto Thomas provided an economic perspective on the calculation of damages in this type of action at the international level, as well as the main challenges faced by plaintiffs and defendants in practice. In addition, Teresa Méndez looked at how market participants can structure their operations to reduce the risk of this type of litigation.

Finally, Fernando Bedoya, who accompanied the presentations with reflections and comments, gave way to an interesting discussion in which the speakers responded to the questions raised by the audience.


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