Strict Liability for Damages of Electronic Trading of Securities

Abstract

Due to the challenges that obstruct investors, in securities market, who buy or sell their stocks and bonds by trading securities electronically over the internet, where securities brokerage firms take over the sale and purchase transactions itself without letting those investors enter the stock market, as well as the several risks of the technological nature and infrastructure of the Internet, we discuss, in this research, the suitable legal nature of the civil liability resulting from the electronic trading of securities. We want the objective liability to be the suitable legal nature of that liability, where those investors face the serious difficulties to prove the fault resulted by the electronic trading of the securities and that could cause severe damages. Also, we discuss the difficulty of applying the general rules of the civil liability on the electronic trading of the securities and we found that they couldn’t be applied on those disputes in the first subject. After that, we discuss the possibility of applying the objective liability rules on the disputes resulted by the electronic trading of the securities and we found that they could be applied on those disputes in the second subject. Then, we discussed the abusive acts that require applying the objective liability on those disputes, such as hacking or violating the confidentiality of the customers’ electronic files in the third subject. Finally, we concluded the research by discussing the authenticity of the commands sent from customers to financial intermediaries via email or other means of communication