Locating Damage in the Securities Market in the EU – The Road to VEB

This article analyses where purely financial damage in the securities market occurs in light of the European Court of Justice’s (“ECJ”) case law on Article 7(2) of the Brussels Ia Regulation. The case law on what constitutes the necessary connecting factor to the competent courts is diverse. According to the ECJ’s judgment of 12 May 2021 in VEB, the place where the damage occurs in the secondary market of exchange listed shares is the place where the issuer has statutory reporting obligations. The ECJ held that such interpretation ensures the foreseeability required to establish international jurisdiction. The judgment brings welcome clarity to the location of damage in the secondary market and consolidates the role of statutory reporting obligations as a connecting factor to establish international jurisdiction. Damage, pure economic loss, secondary market, place where damage occurs, disclosure obligation, jurisdiction, regulated market