GPIF Sues Toshiba: Japan’s Securities Law that Makes it Easy to Sue

The the news of the day is that GPIF is suing Toshiba for $10 million. It is only one asset manager that is suing, almost certainly under Article 21-2 Japan securities law (FIL) which makes it very easy for plaintiffs to sue and claim a “presumed damages amount”, and then shifts the burden of proof to the defendant company (unlike US law) to disprove its negligence.  The stock has come down by about 26% or so.   (Interestingly, Japanese securities law in this area is much harsher than US law, which never shifts the burden of proof in such cases.)