Research On Several Legal Issues Concerning Civil Liability Of False Statements In The Securities Market

Securities market as a vital part of market economy, its activeness is the important indicator to measure whether national economy operates stably. However, due to its specialization, complexity and information asymmetry, frauds may occur. Frauds in securities market mainly include false statements caused by information asymmetry, insider dealing by using insider information,market manipulation by taking advantage of capitals and customer-defrauding to name but a few.The damages led by false statements are particularly serious.Since the embarking on securities market in China in the 1990s,tremendous achievements have been made. But owing to the short period of domestic securities market and the imperfection of its related regulations, as well as he tendency on criminal and administrative regulations of existed legislation, in the real sense, a completely systematic civil liability system on the infringement in securities market has not been set up.False statements refer to the false records or misleading statements of big events by the specific person with legal obligation of information disclosure, and major omissions or improper disclosure during the process of information disclosure. Because of the imperfection of its related regulations, many major issues covered by false statements have not been tackled effectively in our country. Civil liability system on false statement involve many complicated issues, therefore several major ones are chosen to discuss here. including the followings:(1)On the identification standard of 'materiality' in information disclosure in securities market. By introducing the use of'Rational Investment Theory' established in America's judicial practice of legal precedents,for meaningful reference in domestic, it tries to solve the problem of standard dualization of'whether it affects investors decision' in the period of issuing securities and'whether it has great impact on stock price'in the period of continuous information disclosure;(2)On the imputation principles of false statements in securities market. It is the core of Tort law that the difference in burden of proof is generated by applying different principles to different subjects like issuers?initiators or listed companies?actual controller?securities underwriters?the securities listing recommended? directors with accountability?supervisors?senior managers and professional intermediaries etc.; (3)On the causal relation between false statements and damages. It mainly refers to the generation and application of fraud on the market theory established in America's legislative practice as well as arguments. It also analyzes the trouble in ascertaining causation in Securities Law in China and tries to put forward ways to address it; (4)On the calculating standard of damages caused by false statements in securities market. The scope of damages covers spread loss and interests and other losses. Among them, spread loss is the main part of damages. It tries to seek a solution on the issues of the scope and amount of damages, by comparing and analyzing two commonly used computing methods on spread loss, Actual Damages Method and Arithmetic Method.