The Principle Of "Caveat Emptor"

It is not tend to the securities firms which has capital and infor-mation superiority, and not neglect the investors who at the disadvantage on capital and information, but for in the question that when conflicts arise between investors and securities dealers and stock, In the judicial proceedings lack the referee basis. To find a solution and in order to better safeguard the operation of China’s securities market."Caveat emptor" principle originated in simple commodity trading process, is the oldest basic trading principles. In different historical periods, under different economic background of "caveat emptor" principle of justice in the economic field and in the understanding of the application is also different. In the modern history of the development process as the protection of consumers and investors after the interests of the regime established meaning of the principle of "caveat emptor" principle are developed along a straight line has undergone some changes, but no matter what changes, this line is the economic territory of the principles applied more widely, more and more complex understanding of justice and more abundant. Today this principle has become the financial and securities transactions is a basic principle, is one of the codes of conduct of market participants.Now we study the "caveat emptor" principle is not discussed in the finance and securities trading which is the application of this principle. But how to use the principles and guidelines for how to use the functionality of the principles of the trial in which justice. Simple commodity economy trading process,"caveat emptor" judicial understanding and use of relatively simple. Because the parties to the transaction relatively equal economic status, a relatively small amount of information trading, exchanges convenience, high transparency. But with the social and economic development, especially in the financial and securities transactions increased, the economic status of the main transactions between produced a huge gap. Although the law is equal between the transaction subject. But the financial product provider mastered the transaction information release, the commanding heights of absolute financial products trading content, but investors only provider of financial products based on the information released, and market-related information to determine the feasibility of the investment. Therefore, the "caveat emptor" principle in the application and administration of justice in the field of applied economics become the focus of many contradictions. These contradictions concentrated in liability values determined economic efficiency and legal fairness between tort liability and judicial remedies after the occurrence of these two aspects. In examining the financial and trading securities efficiency and fairness issues, we can finance law and securities law is understood as a process of equitable fairness, and efficiency is the efficiency of a system. Reasonably accurate use of "caveat emptor" principle can achieve balance and integration between economic efficiency and legal fairness binary values. So the court applied"caveat emptor" principle Magistrates and Responsibility. In order to optimize the use of the principle of judicial guidelines to protect the interests of the function of investors. The need to promote the"caveat emptor"principle from the legislative and judicial aspects of the legal system.