Empirical Analysis Of The Disputes Over The Liability Of Securities Misrepresentation

With the development of China’s securities market,the problem of investors’ losses due to false statements made by the obligor of information disclosure is becoming more and more prominent,the awareness of small and medium shareholders to defend their rights is gradually growing,especially Xiang Yuan Culture,Zhao Wei and other securities misrepresentation liability dispute case has attracted national attention,making this type of case into the general public vision.The newly amended Securities Law of the People’s Republic of China establishes two special chapters on information disclosure and investor protection to strengthen the information disclosure system,highlighting the real needs of such cases.Combined with the newly amended Securities Law,China’s existing laws and regulations still have the problem of overly principled,imperfect or contradictory provisions on securities misrepresentation,such as inconsistent standards for the "materiality" of misrepresentation in legal provisions,unclear principles for determining the date of disclosure,systematic risk measurement is not provided for,resulting in judicial practice in such cases in the main dispute focus on adjudication rules are inconsistent,which is contrary to the litigation objectives of similar cases,as well as not conducive to maintaining judicial credibility and authority.In this article,we propose to use the 25 dispute resolution instruments of securities misrepresentation liability cases as a sample to analyze and refine the dispute focus,focus and difficulties of securities misrepresentation liability disputes in judicial practice,find the reasons for the inconsistency of resolution rules in the above five areas,draw on extra-territorial experience,combine with reality,and propose improvements and refinements to the above problems,with a view to promoting and protecting the healthy and orderly development of the securities market.In addition to the introduction and conclusion,this paper is divided into four parts.In the introduction,the background and significance of the selected topic of the paper,the current state of research in the domain and beyond,the research methodology,the significance and value of the research and the innovative points of the paper are presented.The first part is the general situation of the Hearing of Securities Misrepresentation Liability Dispute Cases.By collating and analysing the 25 sample documents,a summary of the proceedings in this category of cases was drawn up in terms of the focus of the dispute,the distribution of proceedings,the basic situation of investors’ access to compensation,the subject of civil liability,etc.The analysis found that the focus of this type of case in judicial practice and the main difficulties in the trial are four aspects: the determination of false statements,the date of disclosure,the determination of the causal relationship between the investor’s loss and the false statements and the calculation of the investor’s loss.The innovative point of this section is to find out the important points and controversies in the trial of this type of cases through the empirical analysis method,raise questions,and lay the foundation for the analysis of the full text.The second part is about the identification of misrepresentation.A review and analysis of existing laws,sample judgments and domestic and foreign theories and practices concluded that "materiality" should be used as a criterion to define misrepresentation,and that the "materiality" determination should be based on the investor’s decision-making criteria.Analysis of the obligation of judicial review of "materiality" in the absence of a predicate procedure.The third part,the determination of causation.First,the key principles of the two time nodes of the misrepresentation implementation date and the disclosure date should be clarified,while the court should select a professional appraisal agency to measure the system risk.In terms of causal refinement,both induced multiple misrepresentation and induced null misrepresentation should be defined in terms of both transactional causation and loss causation.This part of the innovation lies in the analysis of the causal relationship of the evasive misrepresentation that is not provided for in the current law,with a view to filling the gap in the law.The fourth part is the judgment of investors’ loss.Under the law,the key to calculating investor losses is to determine the average bid and ask prices of the stock.By analyzing the five loss calculations common in current judicial practice,it is more reasonable to choose the moving-weighted average method to calculate the bid-average and ask-average prices.