A Study On The Causality Of Securities Misstatement Under The New Judicial Interpretation

In 2022,the SPC issued the Provisions of the Supreme People’s Court on the Trial of Civil Compensation Cases Involving False Statements in the Securities Market(hereinafter referred to as the "New Provisions"),which divides causation into transaction causation and loss causation,further improves the determination of causation,explicitly includes false statements in the scope of adjustment,and also abolishes the provision that administrative penalties or criminal penalties are used as pre-procedures,giving courts the authority to independently judge materiality.Misrepresentation violates statutory information disclosure obligations,affects investors’ reliance on public information to make rational investment decisions,causes investors to suffer economic losses,and is not conducive to building a fair and just development environment for the securities market,and needs to be regulated through legislation.Taking the traditional civil tort liability theory as the starting point of research,this paper analyzes the feasibility of using two-tier causation for securities misrepresentation.Summarize the problems existing in the determination of causation in judicial practice.Chapter 2 of this paper introduces the connotation and judgment methods of causation under the traditional tort liability laws of mainland and common law systems from the general theoretical research of causation in the traditional tort liability law of mainland and common law systems,and puts forward the practical basis for applying factual causation and legal causation.In view of the particularity of misrepresentation cases,it is necessary to adapt the application of traditional causal relationships,and the burden of proof should be favored in view of the inherent weakness of the plaintiff’s insufficient ability to provide evidence.The securities market is complex,and the decline in stock prices is usually caused by multiple reasons,considering that misrepresentation is only part of the cause of investors’ losses,so the deduction method of intervention factors is also the focus of this study,so as to avoid excessive liability for defendants and reflect the concept of fairness in the law.Chapters 3 and 4 of this article describe the connotation of the two causal relationships in accordance with the logic of the causal dichotomy in the New Provisions,introduce the theory of fraudulent market in the transaction causation,discuss the determination of transaction causation from the perspective of the original defendant,introduce and compare the materiality criteria after the cancellation of the pre-procedure,and discuss the enhancement of the plaintiff’s ability to present evidence and the reasonableness of the expansion of the applicable subjects and venues of the transaction causation due to the continuous development of the securities market.In the causal relationship of loss,the advantages and disadvantages of the "ex ante view" and "ex post view" of the loss calculation method are introduced,the current situation of unclear nature of professional institutions in practice brings inconsistency to judicial adjudication is discussed,and finally the deduction of systemic risks is compared with common practices in the judiciary and their own views are stated.In Chapter 5,this article responds to the issues discussed in the above chapters and puts forward case trial suggestions for the improvement of the determination of transaction causation and loss causation,on the one hand,to enhance the plaintiff’s ability to adduce evidence,and on the other hand,to adopt principled standards for the deduction of systemic risks,so as to avoid the phenomenon of different judgments in the same case.At present,materiality is independently reviewed by the court,which will become an inevitable focus of dispute in judicial practice,and the establishment of false statement causation cannot be separated from the review of materiality,so this article proposes to take the "investor rationality standard" as the principle to overcome the deadlock caused by the failure of the "price sensitive" standard.