A Study On The Causality Of Civil Compensation For Misrepresentation In Securities

The essence of misrepresentation of securities is the violation of the obligation of information disclosure,which not only damages the order of securities,but also causes the investors to make mistakes in decision-making,which results in the investors' loss and the civil lawsuit.Combining the theoretical advantages and legal practice,our country mainly adopts tort liability to regulate the cases of misrepresentation of securities.Causality is an important bridge between the misrepresentation and the investor's loss.Based on the analysis of the cases of civil compensation for Securities Misrepresentation in the past three years,the author finds that there are three problems in the determination of the causality in such cases: identify the importance of misrepresentation from the administrative penalty,no clear standard for the disclosure day of misrepresentation,and the compensable situation is narrow.These factors all caused the dilemma in the causality determination.Summarizing the important theory of causality in the traditional civil law field,I analyze the particularity of causality in the case of misrepresentation of securities,including the complexity and non-specificity of securities market itself,the second derivation of causality and the presumption of reliance.The special theory of causality for security market in American law are briefly introduced in this secction — "presumption of reliance" and "fraud-on-the-market theory".Then It is used to make the whole deduction of the causality of the case of misrepresentation of securities,and to analysis the legislation in China.To solve those problems,we need to clearly distinguish the causal relationship in fact from that in law,and to explain its proof and disproof respectively.Add the standard for significance of misrepresentation and do independent judicial reviews,adopting double standards of decision-making influence and price sensitivity,and determining the importance in the light of the specific details of the case.We also need to clarify the statements for disclosure date,and to make clear whether the contents of the disclosure need to be clear and specific,how to insure the scope of the disclosure is national and subject is authoritative,and guarantee the day for the first.This Standard can base on the essential elements of the share price.At last add a new regulation for misrepresentation aimed at inducing securities selling.