Research On Proportional Joint And Several Liability Incurred On Securities Intermediaries In Securities Misrepresentation

The current Securities Law of the People’s Republic of China clearly stipulates that where false information disclosure causes losses to investors,the intermediary agency shall be deemed to be at fault and shall bear the joint and several liabilities together with the issuer or the listed company for the losses.In practice,most courts adjudicate pursuant to this provision.For example,in the “Dazhihui” case,the court ruled that the Securities Law stipulates that the subjective constituent element of the intermediary institutions’ tort liability for false statement is the presumption of fault,but does not further distinguish whether the subjective state is intentional intent or negligence.Therefore,the intermediary institutions shall assume joint and several liabilities if they are unable to prove that they are not at fault.However,scholars denounced that blindly requiring securities intermediaries to bear joint and several liabilities without distinguishing their subjective status is highly likely to result in disproportionate punishment,which is not only unfair to the intermediaries,but also excessive protection to the investors.No matter from which angle,it is not conducive to the healthy development of the securities market.Therefore,many scholars proposed that the scope of joint and several liability should be limited,but how to limit and there is no unified standard.Based on the public positions of academic circles,some scholars hold that if an intermediary commits negligence,it should only bear share liability for the part for which it has fault while some scholars believe that the intermediary should adopt supplementary liability when there is no collusion between the intermediary and the issuer.Generally speaking,scholars believe that we should distinguish "intention" and "negligence" of agency,and should not make agency bear the same responsibility regardless of its subjective status.The article agrees with such suggestions.However,there are still room for further discussions on issues such as what form of civil liability should be adopted,whether this form of liability assumption is in line with the false representation of the intermediaries,and how to apply such forms to false representation disputes.Therefore,this paper compares several mainstream civil liability modes advocated by the theoretical and practical circles,and holds that proportional joint and several liability is a feasible mode.Through case analysis and theoretical elaboration,it is considered that the proportional joint and several liability can not only conform to the law and the pattern of tort of intermediary’s misrepresentation when the intermediary is only a general fault,it can also allow intermediaries to assume their responsibilities fairly.On the basis of this,it is proposed that the fault types of intermediary institutions should be distinguished so that they bear the corresponding responsibility.The first chapter of this article defines the scope of the securities intermediary,and combs the relevant provisions of China’s current law on the intermediary’s responsibility for misrepresentation,although the strict joint and several liability stipulated in the securities law conflicts with the judicial interpretation related to the company law and the audit business,in practice most courts still follow the provisions of the securities law.But this kind of responsibility bearing way which does not distinguish the subjective fault will cause many disadvantages: the fault and the responsibility mismatches,possibly causes the intermediary organization to exit;The high agency fees charged by intermediaries are still ultimately "the bill" for investors.Therefore,the article proposes to limit the application of joint and several liability from the angle of balancing the professional interests and social interests of intermediary institutions.Chapter two compares the traditional liability of civil compensation in tort law,namely,joint liability,supplementary liability and joint and several liability,with joint and several liability respectively,it is found that these liability-bearing methods either do not measure the interests between investors and intermediaries well,and bring many obstacles to investors’ claims,or do not help to urge intermediaries to perform their duties diligently.Then,this chapter introduces "proportional joint and several liability" from the case,and finds that it is not only the most consistent with the current "Securities Law" logic,but also limits the upper limit of the intermediary’s compensation,is advantageous to the intermediary organization "excessively punishes equally".Therefore,this chapter discusses the theoretical basis of proportional joint and several liability and joint tort theory,and holds that the intermediary agency has the space to apply proportional joint and several liability in case of misrepresentation.The third chapter firstly demonstrates the legitimacy of intermediary’s liability under "General Fault",and then proposes that intermediary’s liability should be distinguished from its fault type.In the case of intentional and gross negligence,the intermediary and the information disclosure obligor should be held jointly and severally liable for the result of the damage;The proportional joint and several liability shall apply to the misrepresentation caused by the intermediary’s general negligence.And that the fault should be identified according to the intermediary’s duty of care to measure,and the degree of fault to determine the size of the responsibility has an important role,at the same time,the determination of "proportion" in "proportional joint and several liability" should consider the action degree of cause.