Wang And Others V.Wuyang Construction,Etc The Legal Analysis Of The Liability Dispute Case Of Securities False Statement

In recent years,China’s bond market has developed rapidly,but at the same time,bond market defaults have occurred from time to time.In some of the bond default cases,there are also bond misrepresentation and fraudulent issuance.China’s Securities Law on bond misrepresentation tort liability is only principle-based,and the manner of liability is unclear.The rulings on cases of joint and several liability of securities intermediaries have been concluded with different results.By analyzing the case of Wang Mou et al.v.Wuyang Construction et al.Securities Misrepresentation Liability Dispute,in conjunction with the "Several Provisions on the Trial of Civil Compensation Cases for Misrepresentation in the Securities Market" issued by the Supreme People’s Court on January 22,2022,based on the determination of the date of disclosure of misrepresentation,the determination of causation,and the determination of due diligence of securities intermediaries,and with reference to the "fraudulent market theory" of U.S.securities,we discuss the determination of misrepresentation and civil liability of intermediaries in the bond market,and reach the following conclusions.First,on the determination of the date of disclosure of misrepresentation,the court should consider the factors such as the first time of disclosure,the relevance of the content,the nationwide impact and the warning of the risk according to the differences of each case.Secondly,the determination of materiality and determination of causality are found to be imperfect in the new regulation: The new regulation,based only on the stock market,identify the significance of misrepresentation based on the standard of "price or volume sensitivity",and adopt the principle of "constructive reliance" to determine the transaction causality.However,due to the special nature of the bond market,this rule is not applicable,and relevant rules applicable to misrepresentation in the bond market should be formulated in the future to enhance the coordination of the bond market legal system.Thirdly,in determining whether intermediaries are diligent,different cases such as intentional and negligent should be distinguished,the boundaries of intermediaries’ duties should be clarified,and the reasonable reliance system should be improved.Finally,when judging the intermediary’s external liability for misrepresentation,the court needs to take into account the degree of fault and the size of the causal force.It is appropriate to clarify the proportion of internal liability sharing among intermediaries in the judgment to avoid litigation among joint and several liable persons,reduce the burden of litigation and save judicial resources.