Tort Law Analysis Of Civil Liability For Misrepresentation Of Securities Lawyers

In recent years,false statements in the securities market have occurred frequently,and the interests of investors have been seriously damaged.The civil liability of issuers and other actors has yet to be implemented.In the cases of false statements that have occurred,most of them have financial fraud.In such cases,whether securities lawyers should bear the liability for compensation and how much share of compensation should be borne need to be further explored.According to the analysis of false statements by domestic scholars and foreign treatment mode of experts' misrepresentation,the behavior of the false statement should be characterized as tort.Therefore,if securities lawyers are required to assume the civil liability for false statements,the premise is that the elements of tort liability have been met: injurious act,damage,causal relationship between injurious act and damage,fault.There are three forms of injurious acts in false statements of securities,including making false records,misleading statements or major omissions in relevant documents.However,the information of false statements should satisfy certain ‘Significance'criteria.False records,misleading statements or major omissions of unimportant information will not incur civil liability for false statements in securities law.In order to better protect the legitimate interests ofinvestors,the criterion of ‘investor decisionmaking' should be established as the only‘Significance'criterion.Loss is the precondition for investors to claim civil compensation.Investors who profit from buying and selling the securities after false statements are not allowed to claim damages.The damage caused by false statement is the loss of price difference in securities trading,which includes the loss of buying thesecurities affected by false good news,and loss of selling secureties affected by bad news.The causal relationship between securities false statements and investor losses is a difficult point in securities tort disputes.Compared with general tort,the causal chain of false statements is longer and there are many factors,which makes it difficult for traditional causal theories such as ‘But for'or‘Conditional theory'to solve the factual causal relationship.According to relevant provisions of the United States Securities Law,when dealing with securities fraud cases,American courts generally infer the establishment of factual causality by the criterion of‘Significance'or the fraud on the market theory,and can be overturned by the defendant.In view of the fact that China's securities market is not an effective market,this paper suggests that domestic courts directly infer the establishment of factual causality according to the criterion of the ‘Significance'when dealing with disputes of false statements,thus alleviating the burden of proof of investors.In terms of legal causality,this paper suggests adopting the direct result theory.Investors need to prove that false statements lead to securities trading at an unfair price.If the defendant intends to overturn the legal causality,they must prove that the loss of investors was caused by other independent and abnormal factors.The fault of securities lawyers can be divided into intent and negligence.The lawyer who knew there were false statements in the documents and still signed them should be regarded as intentional.It usually happens when security lawyers and issuers conspire to make false statements.Negligence is essentially a violation of the duty of care.For business matters related to law,securities lawyers should pay the average level attention of the legal profession to these matters.For other matters which are unrelated to the law,securities lawyers only need to do the general duty of care of ordinary people.This paper suggests that legal matters should be distinguished from other matters by the method of syllogism.Financial statement auditing,asset appraisal,profit forecast and other matters do not conform to the working mode of syllogism,and do not belong to matters related to law.Securities lawyers only need to fulfill the general duty of care of ordinary people to such matters.In the case of satisfying the elements of the tort liability,the securities lawyers shall assume the civil liability for the investor.According to the theory of joint tort,securities lawyers should bear joint and several liability with the issuersin the case of intentional fraud.In the case of false statement,it is difficult to satisfy the theory of ‘joint intent'or‘joint fault'.So it should not bedefined as joint tort.Its civil liability should be stipulated as sharing liability.Among the subjects who are liable for compensation,the issuer should bear the main liability for compensation.And then,the sponsor shall bear the second liability for compensation.Finally,the securities lawyers and other professional intermediaries should bear a relatively small share of the liability.