Legal Challenges of Establishing a Compensation Fund for Exchange Market Crimes and Violations; With a Reflection on American Capital Market Law
Quarterly Journal of Securities Exchange

Quarterly Journal of Securities Exchange

Legal Challenges of Establishing a Compensation Fund for Exchange Market Crimes and Violations; With a Reflection on American Capital Market Law

Document Type : Original Article

Authors
Ehsan Bahramy 1
Mohammad Mahdi Montazeri 2
Milad Amiri 3
1 Phd Student, Private Law Department, Faculty of Law, Shahid Beheshti University, Tehran, Iran.
2 M.A., Department of Private Law, Faculty of Islamic Studies and Law, Imam Sadiq University, Tehran, Iran.
3 PhD Student, Department of Private Law, Faculty of Law, Tarbiat Modares University, Tehran,
10.22034/jse.2024.12315.2192
Abstract
In the United States of America, the "Fair Fund" is a solution that is intended to compensate for losses caused by the violation of capital market regulations. According to the current regulations, the disgorgement of ill-gotten profits resulting from the violation of the regulations as well as the civil penalties are collected in the Fair Fund to finally be distributed among the injured investors. One of the important issues related to the Fair Fund is the challenges that have been raised regarding its establishment. In this article, which is provided by a descriptive-analytical method and by referring to library sources, these challenges are examined and its place in the predictable compensation fund for crimes and violations in the capital market of Iran is explained. In the end, after analyzing the history of the establishment of the Fair Fund, the following conclusion is reached: In American Law, "insufficient compensation", "limited or denial of the right to file parallel litigations" and "circularity in compensating damages" which have been criticized to the fair fund, rejected and have not found ground for growth. Similarly, in Iranian Law, these challenges will not prevent the establishment of a compensation fund for crimes and violations in the capital market.
Keywords
Disgorgement
Civil Penalty
Compensation Fund for Damages Caused by Crimes and Violations
Fair Fund
Loss
Subjects
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Quarterly Journal of Securities Exchange
Volume 17, Issue 68
Winter 2025
Pages 49-74