The Relevance of Time in Framing the Sanctions Framework for Defective Disclosure

Abstract:

Sanctions imposed on listed companies in cases of breached disclosure obligations have steadily but rather slowly been moving towards a harmonized approach in EU corporate law. Without compromising the potential efficiency of these harmonisation measures, this article aims to propose an alternative method to increase the efficiency of sanctions.

By focusing on the importance of time as an element that influences corporate decisions in relation to the breach of disclosure obligations, this article seeks to re-frame the importance of sanctions and to link their severity to time manipulation strategies that are potentially adopted by listed companies. This study argues that by linking sanctions and time, the legal framework would be likely to apply more severe sanctions, while adopting differentiated sanctions depending on which disclosure obligations are breached. This new approach aims to trigger a de facto harmonisation trend amongst regulators and judges at the national and EU levels.