Violation Of Securities Disclosure Obligations Of Civil Liability Study

So far misrepresentation on securities in our country occurs frequently, because the relevant law had been in vacancy for a long time and some law on securities available is not according to China. However, as a certain number of formulations about civil compensation cases brought in by misrepresentation in securities market from the Highest Court and the new Securities Law and some other relative law and regulations were brought out, regulations about the civil liability for misrepresentation on the securities market are more and more comprehensive and operative. But there are still many problems unsolved which are not beneficial to protecting the stockholders. This paper is going to analyze the civil abilities for misrepresentation on securities market in substantial and procedural law, and propose my own advice on the improvement in discussing a certain number of formulations about civil compensation cases brought in by misrepresentation in securities market from the Highest Court and the new Securities Law.This paper is divided into four parts. The first part of this paper focuses on the definition of misrepresentation and discusses the following topics. First of all, this paper compares the conception of misrepresentation with those of false statement, misleading statement, omission, improper disclosing and false forward-looking statement. Then this part introduces the division of misrepresentation, which should include false forward-looking statement apart from false statement, misleading statement, omission and improper disclosing which existing in the securities law available. Finally, this part analyses the standard of materiality of misrepresentation, and maintains that, in the environment of our country today, we should adopt standard of "influencing the decision of investors as standard to determine the materiality of the information.The second part examines the nature and forms of civil ability of misrepresentation. First, the author insists that it is the concurrence of contractual liability and liability on tort in the process of issuing securities and liabilities on tort in the process of transaction. Secondly, this part discusses the civil liabilities forms, which should also include abandonment of contract in the contractual liabilities and stop tort in the ability on tort besides compensation for loss.The third part is about the constitutive requirements of civil liability on tort of misrepresentation. The author seriously maintains that liability subject should be one of the requirements as. well as the four others, i.e. illegal act, harmful consequence, causal relationship and fault. First, this part talks about liability subject, which is fixed wide enough to include almost all the possible subjects, which also bring new questions to be solved by the securities law. The author believes that it is better to make clear and definite that subject of the forbidding obligation should responsible for civil liability as investors can not be compensated with no civil liability provision about these subjects in the securities law available. Moreover, it deserves approval that the new securities law makes clear the civil liability of holding stockholders. But both a certain number of formulations about civil compensation cases brought in by misrepresentation in securities market from the Highest Court confuses the conceptions of actual controller, initiator of securities and holding stockholder and make mistakes in using them. It is a big progress that the new Securities Law makes clear that initiator or holding stockholder is out of the scope of actual controller. Secondly, this part analyses the harmful consequences. The author holds that harmful consequences on securities market should not only refer to the prospect, but also to right. The third part discusses the causal relationship. By examination of the presumptive rule on causal relationship referring to the relative institute of America, the author thinks that we should learn from America and build the presumptive rule on causal relationship of misrepresentation and harmful consequences. The forth part analyses the doctrine of liability fixation and grounds for exemption. The author insists that there should be three different standards of liability fixation consequently which are strict liability, liability for presumptive wrongs and liability for wrongs, and different subjects should have different grounds for exemption according to their major levels on the problem and different doctrine of liability fixation.Part four is the discovery on the questions about system of relief on procedural law. The first question is the procedural forms which the author suggests that we should bring in group action in the procedural of misrepresentation on securities market. The second problem is the administrative or criminal penalty ahead of the civil procedural of misrepresentation on securities market. The author thinks that this kind of provision is unlawful, so it should not exist in securities law any more. The third question is the limitation of actions. The author insists that the 2-year-limitation is too long to solve the securities issues in appropriate way and we should shorten the limitation to 1 year.