Perfection Of Identification Of Causal Relationship Of False Representation In Securities Market

In 2003,the Supreme People's Court issued“Trial of Civil Compensation Cases Arising from False Representation in the Securities Market Several Provisions",of which Articles 18 and 19 provide corresponding provisions for the identification of causality of the liability of false representation.however,as the practical experience accumulated by the courts in such cases at the time of its promulgation was is not yet mature,and it was not updated in a timely manner in accordance with the US Securities Law experience that it has borrowed,resulting in many dilemmas in the identification of the causation of false representation.Article 18 delimits the strict identification interval of causality,ignores the complexity of causality in practice,and excludes many possible cases of causality.At the same time,the causes listed in article 19 without causality are of limited practical value to the defendant,making it impossible for the defendant to effectively raise a defense.In order to solve these dilemmas,Further studying the connotation and development of the causation theory of securities fraud in the US Securities Law that it has borrowed from is necessary,so as to obtain useful inspiration for the practice of China's false representation cases,andre-sort false representationcausation theory from the perspective of the theory of interpretation around " Several Provisions”.First of all,we should clearly distinguish the transaction causality and the loss causality in the false representation causality.Under transaction causality,it should first be clear that the essence of paragraph 2,Article 18 of the "Several Provisions" is "rebuttable presumption of reliance".The plaintiff should not be ruled out to prove the existence of the transaction causation through direct evidence,and the defendant should be allowed to provide evidence to reverse such presumption.Second,the defendant can reverse such presumption from two aspects of proof:(1)the false representation did not affect the market price of the security;(2)the investor's securities transaction did not actually rely on the false representation.Under loss causality,China should continue to adopt ex post view,but allows ex ante view to prove loss causation in special circumstances.For special circumstances where the plaintiff sold securities before the date of exposure due to the revealing of false representation information for the purpose of timely stop loss,or the defendant intentionally manipulated the time and content of the disclosure and correction to avoid the responsibility,the plaintiff shall be allowed to adopt ex ante view to prove loss causation.In addition,in determining loss cause,non-false representations grounds should be excluded,and the court's determination of "other factors such as risk in the securities market system" should not be too conservative.