Duty of Issuers to Respond to Rumors in Securities Market: A Comparative Study

Securities Issuers are required to disclose important information relating to the securities in primary and secondary market. The main purpose of imposing this obligation on issuer is informing investors to allow them to make informed decisions about securities transactions. In addition to the primary obligation to disclose information, t issuers are required to correct and update information after the disclosure of the information, the correct information is wronged or its falsity is discovered. The purpose of this paper is to determine the extent of the issuer's obligation to correct rumors. When false information is published publicly by the third parties(the rumors), issuer's duty to correct the false information is doubtful. On one hand, due to the existence of the aforementioned basis in this case (informing investors to allow them to make informed decisions) we can talk about issuers obligation to correct the rumors. Specially because the rumors often influence on the share price and investors decision and there is not any authority, It can be told that with regard to special features of securities market, accepting the duty of issuer to correct the false rumors, even if it is not attributable to the issuer, is better and more efficient. The research methodology of this paper is an analytical-descriptive method and the subject will be studied comparatively.