Investor protection and criminal liabilities for defective prospectuses

Abstract

PurposeThis paper aims to critically examine the applicability of disclosure‐based regulation in a pre‐emerging securities market.Design/methodology/approachThe paper presents, by using archival data, an analysis of prerequisites for the usefulness of the disclosure philosophy making reference to some Asian securities markets with special reference to the contemporary experiences of the Bangladesh securities market.FindingsThe paper concludes that the disclosure philosophy itself is not a panacea, an effective disclosure regime requires a certain level of structural and infrastructural development of the market, and that a particular securities market should follow a paternalistic merit regulation until the attainment of that progress.Originality/valueThis paper contributes to the understanding of effectiveness of the disclosure philosophy for the regulation of securities markets from the perspective of investor protection.