Research On The Causality Of Civil Liability In Securities Misrepresentation

The securities false statement is a special form of the general civil false statement in the field of securities law.There are some differences between the general civil false statement and the securities false statement in the subject,mode and causal relationship.China’s securities law learns from the fictitious causality of the U.S.market fraud theory,that is,presuming the causality between the investor’s loss and the misrepresentation.The purpose of the legislation of such presumptive causation is to protect the investors in the securities market,to lighten their burden of proof in the cases of compensation for misrepresentation,and to regulate the participants in the securities market such as listed companies.But in the judicial practice,the presumptive causal relationship of fiction also brings some problems.On the one hand,this kind of presumptive causation inevitably increases the burden of proof of the defendant.In practice,it is common that the defendant can not fully prove the reasons of defense.On the other hand,if the burden of proof on the defense is too loose,the burden of proof on the defendant will undoubtedly be greatly reduced,which is not conducive to the protection of investors.Therefore,it is of great value to study how to balance the subject of liability for misrepresentation of securities and the interests of injured investors by making clear the presumption of causality and its defense.Secondly,the operating mechanism and laws and regulations of China’s securities market are relatively imperfect,and the application of the securities law to the presumption of causality does not distinguish bond market from stock market,different sections of stock market,professional institutional investors from individual investors.Therefore,under such background,it is of great significance to study how the theoretical basis of presumptive causation and the grounds for defense apply to the securities market of different forms,how to divide the securities products of different characteristics,how much evidence should be provided for different grounds for defense,and whether the court should determine the grounds for presumptive causation and defense at its own discretion in major and complex cases.Specifically,this paper is divided into the following five parts:Firstly,because of the great difference between the securities misrepresentation and the general civil misrepresentation,we must make clear the definition and constitutive elements of the misrepresentation in the background of the securities market before analyzing the theory of the securities misrepresentation,that is,the general mode of the misrepresentation,the subject of the misrepresentation,the consequences of the misrepresentation,and the causal relationship between the misrepresentation and the consequences.Secondly,the presumptive causality applied in the case of misrepresentation of securities comes from the American market fraud theory,which has its specific theoretical background and its application.By analyzing the practice and theoretical basis of market fraud theory,this paper further explores the application of market fraud theory and presumptive causality in China’s specific securities market.Thirdly,the above-mentioned presumptive causal relationship can be subdivided into transaction causal relationship and damage causal relationship,both of which are presumptive but rebuttable causal relationship,Clarifying the defendant’s right of defense and the way and boundary of exercising the right is of great significance to the loss of constant misrepresentation of securities.However,although our country’s laws,regulations and judicial interpretations list a limited number of defense grounds,there are no clear operating rules on how the people’s court determines the defense grounds and how the defense grounds affect the loss of investors.Therefore,this paper will refer to the practice of foreign judicial practice,combined with the reality of China’s securities market,for the above issues normative standards.As to the transaction causation,the defendant may raise a defense that the false statement is not material and the investor is an institutional investor.First,for the defense that the misrepresentation does not have the materiality,the judgment standard of materiality should be made clear first.Based on the standard of materiality derived from American judicial cases,this paper clarifies its concept and scope of application,and provides reference for the examination standard of materiality.Secondly,for the defenses that investors are institutional investors,this paper defines the boundaries of institutional investors and their subjective attitudes in securities trading.Fourthly,for the causality of damage,this paper analyzes the impact of systematic risk and non-systematic risk on the loss of investors.The main problem is how the people’s court analyzes and divestitures the impact of systematic risk and non-systematic risk on the loss of investors in the act of misrepresentation of securities,that is,the determination of defense.Secondly,on the basis of affirming the reasons of defense,this paper puts forward the operation mode of reference for the people’s court to define and calculate the proportion of the above-mentioned external factors in the loss of investors by carding the cases.Finally,this paper will summarize the above research results,and put forward systematic research conclusions.