Research Of The Materiality Standard In Securities Lawsuit

This article begins with the case of Blackstone Group L.P. initiated by public investors, researches deeply into the standard of materiality in the system of information disclosure and need of disclosure in the area of predictive soft information, aims at whether it has the focus of materiality in the misrepresentation and omission of Blackstone IPO registry documents, and then gives specific analysis with components of American securities lawsuits.Beside with the introduction and epilogue, the whole dissertation is composed of three chapters. The first chapter uses the historic data to indicate market gloom in the real estate was already apparent。With that background, it analyzes the whole course of group lawsuit to Blackstone group, points out that is to divide the obligation of information disclosure of Blackstone group into two parts, the first is that whether it should disclose the existing continuous loss and possible big loss in the future, the second is whether Blackstone should disclose the enormous risk exposed in the downstream trend of subprime mortgage business to its invested company.The second chapter is the hardcore of the dissertation. The first section gives a summary of case and indicates the "soft information" disclosure obligation is the key to the research. The focus of Blackstone group is to predict economical recession may take a serious effect on companies and thus the latter should bear the obligation of disclosure. Here we should distinguish cognition afterwards and predicament; that is law doesn't permit reasonable charge, to prove the materiality of predicament should according to the information we mastered when making predicament. The second section talks about the quantitative and qualitative analysis of materiality standard, and strengthen the factor of nature can bring error to serious legal issue. The third section emphasizes disclosure obligation is the premise of materiality standard. We must keep balance between justice and efficiency and stress that the protection of investors is with inclination.The third chapter illuminates the using of materiality standard in the securities civil action. The first section shows that explicit right of action only needs to prove"materiality",but private right of action needs not only"materiality"but also"subjective factor". The second section illustrates that materiality standard is closely linked to trust, and recognizes that the plaintiff should prove the materiality of predicative information as well as price is also affected by it. The third section illustrate that what the financial crisis consider as the intervening causation in order to abstract and dispense the civil compensation.