The problem of the protection of investors in securities issue recognition as void

The article concerns the protection of the rights of investors in unfair securities issues. The law and practice related to specific ways to protect the rights of investors are examined. Irregularities in securities issuing affect the interests of a wide range of subjects, sometimes the undetermined number of persons. Therefore, unfair securities issues concern public interests of protection of investors' rights. The law provides the right to appeal against the actions of the company-issuer quite for a wide range of individuals. At the same time, recognition of the action of the issuing company as illegal is possible judicially upon a petition by an individual investor or a public authority in the interests of all investors (in case of detection of significant violations in the actions of the issuer based on statements by investors). Therefore, the preferred protection of investors' rights in this situation can be remedial actions that include the undetermined number of persons rather than an individual. Existing cases of unfair securities issues on stock market show legal tools used in practice to restore the rights of investors as a result of the unlawful actions of the issuer. However, not all methods of protection applied in the field of securities are protective in nature. Some of them are regulatory since they do not involve sanctions, a particular impact on the property of the offender. The owner of securities and the issuer are in relative legal relations; therefore, to protect the rights of the owner obligation law ways of protection within such relations can be used. The practice of property rights protection, including securities, uses proprietary obligations and obligation law ways as classical tools. Given the features of corporate property systems of various states in the protection of the rights of investors, the model of a vindicatory action does not always properly protect property rights. The authors identified the impossibility of vindication of rights and generic things in relation to the non-documentary securities institution. They propose an alternative mechanism of protection that provides for purchasing relevant securities on the organized market at the expense of the perpetrators or the reimbursement of all expenses necessary for purchasing directly by the right holder.

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