Misrepresentation In Securities Finds That The Legal Issues In The Study

False statement in the stock market violates the information opening system, infringes upon legal rights of investors and affects the national economy developing soundly and steadily. Therefore, it is one target of securities legislation to restrain the occurrence of false statement behaviors in several countries. On January 9 of the year 2003, the Supreme Court issued Some Regulations on Hearing Civil Compensation Cases Resulting from False Statement in Stock Market, which make judicial explanations about legal application to these compensation cases systematically. False statement is a complex act, whose clear definition is a prerequisite for proceeding civil compensation cases.Divided into four sections, this paper tries to make thorough and deep studies and investigation on false statement in the stock market, making both domestic and international researches for reference.The first section defines false statement in the stock market. The concept of false statement originated from the contract law and tort law in British common law, which thereafter has been absorbed in the securities law. Gradually there forms the perfect supervisory system restraining false statement in the stock market. The definition of false statement has been regulated in the law and judicial interpretations of our country, however, they are not sufficient and perfect. The author thinks false statement is an act of tort. According to the subjects, phases, and objects of information opening, false statement can be divided into different categories.The second section studies on the determining criteria of false statement. The author considers that it include "Signifiance"standard, "Rational Human" standard, and "Damage"standard. The information that the actors of false statement made is significant, which lead to the investors make wrong judgments. The judgement of the subjective fault of false statement relies on "Rational Human". The generation and development about the concept of "Rational Human" provides theobjective determining foundation for the subjective fault. The actors of false statement violate the obligations of "Rational Human". The actors of false statement violate the obligation of the information opening system, which leads to that the investors make wrong judgments and suffer from damages.The third section studies on the actors of false statement in the stock market. The actors of false statement refer to the unit and person who exercise false statement and undertake the according responsibilities. Considering the regulations about the actors of false statement in other countries, the author points out the actors include initiators, issuers, or listed companies, underwriters, insiders, and professional intermediate service organizations or persons and so on.The fourth section is on the constitutive elements of false statement. The author considers that the constitutive elements of false statement consist of four points as follows: the formation of false statement, the harmful consequences of false statement, the causality between the action and harmful consequences of false statement and the subjective fault of false statement. The formation of false statement consists of five kinds of behaviors, which are false record, misleading statement, major omission, unjust opening, false evaluation and false predication. False statement goes against the principle of good faith and doctrine of information publicity, violates the lawful rights of investors and destroys the harmonious order of securities market. Due to the theory of frauding market, the securities legislation of U.S. A thinks the trust requirement is the determining basis of the causality. Some Regulations issued by the Supreme Court adopts shifting the burden of proof on the base of the frauding market theory, but there exist some problems in it. The subjective fault of false statement in the stock market include both intention and negligence.