3.7.2.1 First claim

In the first case to be dealt with, the investors claim that they acquired the securities for a price that is too high as a result of the positive market sentiment caused by the misleading prospectus. These investors primarily claim an amount of damages that is equal to the amount they allegedly paid too much. It is doubtful whether these investors are supposed to have relied directly or indirectly upon the misleading prospectus or upon the market sentiment caused by the misleading prospectus.1 In fact, these investors do not allege that they incurred losses because they relied upon the misleading prospectus or upon the positive market sentiment caused by the misleading prospectus. Instead these investors claim that they acquired the securities for a price that is too high as a result of the positive market sentiment caused by the misleading prospectus. Strictly speaking, these investors do not base their claim on the fact that they were misled by the prospectus. They claim that they acquired the securities against an impurerip ce.2

In other words, they allege that they relied on the integrity of the quoted market price and claim that their reliance has been wrong. The aforementioned causation norms discussed in the literature with respect to such claims may be too strict. When the court establishes that the misleading prospectus indeed caused an introduction price that was too high, the causation element in the sense of condicio sine qua non is given. In fact, these investors would have acquired their securities at a lower price, if the prospectus had not been misleading. The circumstances that the investors acquired their securities without reading the prospectus or without consultation by an investment adviser should be irrelevant. Also in the probably theoretical case that the investors did not at all rely on the positive market sentiment caused by the misleading prospectus — they were indifferent to this sentiment — these investors still incurred losses through acquiring their securities at a price that was too high. However, one could argue that the circumstance that the investor acquired his securities without reading the prospectus disrupts the already established causal link. In that case, the argument is that the losses did not occur as a result of the distribution of the misleading prospectus, but as a result of his own decision to acquire the securities.3 Besides the fact that this defence will probably not be accepted by the court,4 we need to make sure what kind of defence is used in this case. It is not a claimant's argument that is relevant to the judgment with respect to the condicio sine qua non element. Instead it is an argument brought forward by the defendant that has to be regarded with respect to the question of whether the losses are attributable to the defendant. As a consequence, the defendant has to argue on the basis of section 6:98 DCC (and to prove the alleged facts used in the defendant's argument!) that the causation element is interrupted as a result of the fact that the investor did not directly rely on the prospectus. However, it is clear that the investor needs to demonstrate that the misleading prospectus indeed caused the unjustified positive market sentiment. This burden of proof is not the result of the fact that he claims that he based his acquisition on the positive market sentiment, but because he claims that the positive market sentiment resulted in an artificially stimulated securities price.