The Civil Compensation System Of Securities Fraud

The system of civil liability for damages concerning fraudulent securities transaction is the bottleneck under Chinese securities legislation. The elements of civil liability formation fault, delict, causation, damages are the key to establish such civil compensation system. The causal relationship between fraudulent securities transaction and damages is rather complicated. This article focuses on causal relationship and studies the substantive and procedural law subject to the following clues: (1)who should be liable for damages ;(2)which civil liability theories should be accounted ;(3)how much should be compensated for the damages. -. Chapter one focuses on the legal concepts of fraudulent securities transaction and the nature of liability. The value of establishing civil compensation system with juristic economics theories are studied. A comparison between the resemblant regulations in China and that in some other counties and districts are made. Chapter two discusses the subject of misrepresentation and the regulation of liabilities due to the different legal subjects. Causation presumption of law and prima facie evidence mle have been proved to be effective to examine causal relationship in special tort, e.g. fraudulent securities transaction. In the misleading statement cases, the courts tend to look to the losses suffered by plaintiffs who bought or sold on the basis of the misleading statements. Chapter three analyses the characteristic of insider trading in Chinese securities market with sociological theories. how to determine the damaged party in insider trading is the premise of remedy of damages, in the insider trading cases ,the current approach is to measure damages by the defendants?profit, rather than the plaintiffs?losses. Chapter four concerns unlawful market manipulation, another fraudulent securities transaction. The manipulator抯 intent to deceive is regarded essential to determine his civil compensation liability. Chapter five involves some suggestions for Chinese securities legislation and system of civil compensation liability.