How To Affirm False Statement In Securities Market

On Feb. 9th, 2003, the Supreme People’s Court published Rules about civil compensation for false statement in securities market. The rules for courts are main evidence to try false statement cases. However, the Rules gives an uncertain definition of false statement, which leads to difficulty in identifying the false action for administration of justice. Meanwhile, the Rules neither announces how to affirm systematic risk nor how to distinguish the degree of influence for investors of false statement and systematic risk in securities market. These defects generate a great deal of defendants to defend systematic risk to avoid compensation.Huawen Media case has mainly involved two problems, namely, the affirmation of securities false statement and the causal judgment between false statement and investors’ lose. The case reflects problems in legislation and practice of compensation comprehensively. The paper is on the basis of Huawen Media case to make certain several problems in distinguishing securities false statement and judging causal relationship so as to affirm false statement and to perfect causal relationship judgment to protect benefits.The paper includes three parts. The first part gives brief introduction to Huawen Media case to point out the main argument in the case so as to propose the main point discussed in the paper.The second part analyzes the securities false statement of Huawen Media, mainly focusing on the controversial point. This part involves significant criteria and theoretical and practical misunderstanding of regulated programs in securities laws. It also analyze the causal relation between false statement and investors’ lose in Huawen Media case. It stresses to distinguish the influence degree of systematic risk and false statement on the premise that existing systematic risk.The last part draws a conclusion and enlightenment after analyzing Huawen Media case.