Study On Securities Underwriters’ Liabilities To Investors

With the definition of underwriter and underwriting as a starting point,the article discussed the legal relationships between underwriters andinvestors and pointed out obligations owed to investors by underwriters inthe process of securities underwriting. When underwriters violated thoseduties, they should be liable for damages to investors, either in the form ofcontract liability or tort liability.In practice, when illegal acts on disclosure of information, such asfrauds and misrepresentation, happens in the course of securities issuing,investors are always the ultimate victims. Issuers, to some extent, undertakeadministrative liability, criminal liability or civil liability, however,underwriters, as the direct trading party to investors, do not undertake theircorresponding legal liability to protect the legal interest of investors, whichmotivates this study. The aim of the article is to clarify the legal duties ofunderwriters and the forms of liability they will undertake when duties areviolated so as to protect the investors more soundly.The research mainly adopted the methods of doctrinal analysis andcase analysis. Based on the theory of rights and duties involved in salecontracts, the article states the obligations of underwriters in the process ofsecurities undertaking. Besides, the comprehensive study on six caseshelped to investigate the problems involved in protecting investors both inlegislative and judicial practice.The article is divided into five chapters, apart from the parts ofintroduction and conclusion.The first chapter discussed the definitions of securities underwriter and securities underwriting. The second chapter investigated the mainduties that underwriters owe duties to investors and the theoretical bases ofthe duties. The third chapter discussed underwriters’ statutory liabilities toinvestors under current law system. The fourth chapter investigatedunderwriters’ liability to investors from the perspective of judicial practicewith the help of detailed study on six cases. The fifth chapter proposedsuggestions on improvement of both substantial securities law andprocedure law in regulating underwriters’ duties and liabilities to investorsto protect investors’ interests more soundly.