Civil Liability for Violation of Disclosure Regulations in Securities Trading (A Comparative Study of Iran and us Law)

This paper explores the rules governing disclosure of information in Iran’s capital market and the appropriate system of civil liability for mandatory securities disclosure violations by established, publicly traded issuers. The Iran system’s design has become outmoded as the underlying mandatory disclosure regime that has moved from an emphasis on disclosure at the time that an issuer makes a public offering, to an emphasis on the issuer’s ongoing periodic disclosures. In an efficient capital market, securities’ price is fair and capital allocation is optimal. An efficiency analysis shows that, unlike Iran law today, the relevant actors should have equally great civil liability incentives to comply with the disclosure rules.