Comments On System Of Civil Liability For Misstatements Of Security Market

The Supreme People's Court announced "A number of provisions on the trial of civil compensation case of security market caused by misstatements" in January 9, 2003. The judicial interpretation and legislation technique is of great value at the policy level, but argument still exists in a number of the basic theoretical issues, such as the scope of applications, pre-procedure, determination of a cause-effect relationship and the loss affirmations. In this dissertation, an analysis starts with the composition of civil liability for misstatements. Combined with practical considerations for civil liability for misstatements, the following conclusions are reached by means of its potential impacts to China's similar system of major countries and regions in the world: the problems of China's security market can be solved and security market can develop healthily only by further improving our system of civil liability for misstatements. Based on this basis, a false representation of our civil liability system can be built by expanding the application scope, removing pre-procedure, attaching importance to applications of "fraud on the market" theory in determination of the cause-effect relationship and reasonably determining the scope of compensation.