Comparative Study On Civil Liability Of Illegal Information Disclosure Of Chinese And American Listed Companies

Sunshine is the best preservative,information disclosure system is just the sunshine in the stock market.Information disclosure is the continuous responsibility and obligation of the listed company,the bridge connecting the listed company and investors,and the main way for the securities regulatory authorities to supervise the listed company.In the capital market caused by financial fraud of listed company’s information disclosure violations have become common case,although China’s criminal law and administrative penalty for this kind of case occurred frequently,to some extent,maintain the order of the securities market and stable,but the two do not restore the confidence of the investors in the securities market,Nor can it make up for the losses suffered by well-meaning investors.At this time,the importance of the provision and application of civil liability is more prominent.In contrast,in the United States,where the securities market system is relatively developed,the civil liability provisions and the relevant civil litigation system for the disclosure of illegal information have been quite mature.In 2019,China revised the Securities Law.Combined with the development of the current securities market,a special chapter was set up to protect the rights and interests of investors and to strengthen the punishment of listed companies’ disclosure of bank interest violations from the perspectives of civil,administrative and criminal liability.And combining with China’s position on the world stage of growing,more and more in domestic and overseas related transactions of listed companies,in order to strengthen the supervision of the enterprise and the new "securities law" to increase the terms of the extraterritorial effect,namely the scope of its jurisdiction will be extended to about our country securities market transactions in foreign trade activities.In the new era,in order to ensure that the registration system can be smoothly implemented and fully developed in China’s securities market,the information disclosure requirements for issuers and listed companies have changed from formal standards to substantive results.The financial fraud of Luckin Coffee in 2020 seriously violates the requirements of both China and the United States on securities information disclosure.Because Luckin Coffee has business in both China and the United States,and there are many investors,so it has a lot of financial fraud.The forms of illegal information disclosure stipulated in the new Securities Law of China include false records,misleading statements and major omissions.It requires the information disclosure obligatory to disclose information in a timely,true,accurate,complete,concise and clear,easy to understand,and fair manner,and the simultaneous disclosure at home and abroad is also required.The civil liability for violation of information disclosure is mainly stipulated in Article 85 of the Securities Law,which defines the subject of civil liability for violation of information disclosure and the representative litigation system.Article 220 provides for the principle of precedence in civil compensation.If a person violates the provisions of this Law and should be liable for civil compensation and pay a fine or fine,and his property is insufficient to pay,priority shall be given to him for civil compensation.However,this principle is difficult to be implemented in practice for a long time and is almost dormant.The Securities Act of 1933,the Securities Exchange Act of 1934,and the 10B-5regulation of the Federal Securities Regulatory Commission have set up the legislative benchmark for the disclosure of illegal information and the mode of civil compensation litigation.And on the basis of the long-term experience of case law,he has gradually explored and created a series of mature standards of listed companies’ information disclosure obligations,the identification of illegal acts and the establishment of the form of group litigation.American jurists use the market fraud economics theory to deduce that there is a causal relationship between the damages suffered by investors and the behavior of false statement,thus placing the burden of proof on the defendant company to refute,effectively protecting the weak position and damaged entity rights and interests of medium and small investors in the securities market.Suggestions are put forward to improve the implementation of civil liability regulations on illegal information disclosure of listed companies in China.First,to accelerate the improvement of civil liability regulations on illegal information disclosure with "Accounting Law" as the main body;Second,to accelerate the implementation of the representative litigation system of illegal information disclosure;Third,the priority system of civil compensation for illegal information disclosure of listed companies shall be implemented.We will strengthen the protection of investors and ensure the timely,true,accurate and complete disclosure of securities market information.