On The Case Of FSL Securities Misrepresentation

Misrepresentation in securities market breached the code of genuineness,accuracy,integrity and timeliness that information disclosure required,severely undermining the market economic development;therefore,it's prohibited by the securities law.However,the legislation to the civil liability of misrepresentation at present can't meet the changes brought by new situations of the security market in our country,also the diversity of concept and value led to different verdict in judicial practice,which caused the investor heavy loss.Hence,it's significant to study the securities misrepresentation by the specific cases of judicial practice.This paper studied the FSL securities misrepresentation case on three aspects,i.e.,the identification of misrepresentation,the causal link between misrepresentation and the damage,and the evaluation of loss,drew on the advanced experience and theories of U.S,and come to below conclusions.Establish the materiality standard and measure the misrepresented facts by the impact on reasonable investor's decision and the fluctuation of securities price.Take the reasonable investor's decision as the prior factor,combining the securities price to comprehensive analysis.Add the cognate trade in the material fact list in order to promote the public company's self-regulating.Repeal the preceding procedure in securities civil lawsuit,and recognize the decision of administrative penalty as evidence benefited to investor,no longer restrict the investor's right of civil action.Modify the legislation pattern of causal link,refining it to transaction causation and loss causation.Consider the intervening cause thorough from its character,extent and predictability.Since the type of misrepresentation that lure investor to bear operation threatened the securities market as well,it's necessary to add the regulation of this type misrepresentation in the legislation.The investor's loss should include the transportation fees,attorney fees,notarization cost,and lost income which are foreseeable and obviously resulted from the misrepresentation.Use moving weighted average method to calculate the bid average price of investment margin loss,which is a scientific approach to properly compensate the investor's loss.“Sunlight is said to be the best of disinfectants.” said by Judge Louis D.Brandeis.Information publicity is an efficient way to eliminate the unfairness resulted from information monopoly and advantage,avoiding investor suffering loss because of the asymmetric information.In a word,it's imminent to enhance the legal regulation to securities misrepresentation and improve the information disclosure system in the transition period.