Question 4

An investment adviser (the "Investment Adviser") is recommending his client (the "Investor") to buy stocks from Listed Company as the latest annual report is disclosing very robust financials. After the Investor acquired stocks from Listed Company, the later issued a profit warning and the stocks significantly decreased in value over the following six months until the trading of the stocks were suspended. After further investigations, it was discovered that the review of the financial statements by the auditor of Listed Company (the "Auditor") lacks the usual diligence the Auditor recognizes that he was too busy with other more important files when providing a clean opinion on the annual report of Listed Company. Finally, it happens that external accountant used by Listed Company (the "Accountant") to prepare the financial statements was arrested for having produced and used false documents. The Accountant recognizes the facts and says that Listed Company paid him substantial amounts for producing and using false documents in the accounting.

Please indicate as more details as possible.

(1) For the matter at hand, please list the civil actions which are possible for the Investor in light of the three elements necessary to trigger civil liability? Please differentiate between actions triggering the contractual liability from actions triggering the liability in tort.

(2) By referring to the elements defining the damage, please explain whether the Investor could start any action on the basis that he has missed other promising investment opportunities by following the recommendation of the Investment Adviser.

(3) Please identify whether there are any criminal procedures in the matter at hand and compare in general criminal law and compare civil law liability.