Determination Of The Significance Of Securities Misrepresentation

China is in the reform period of comprehensive implementation of registration system,and the quality of listed companies will be determined by the market,and the regulatory authorities will relinquish the status of "supplement formal supervision".In this context,information disclosure is a reliable basis for investors to make investment decisions.If the basic facts relied on for investment are false,investors will bear huge losses,and the information disclosure agent will be held liable for the infringement of false statements.However,the stock market should not blindly "fatherism" entrusting information disclosure agents with excessive disclosure obligations,otherwise it will increase the burden of information disclosure agents and make investors indulge in redundant noise.Therefore,materiality is the boundary of information disclosure and one of the components of illegality of tort liability in terms of false statement.Based on the premise of the significance of false statements,this paper tries to put forward some suggestions to regulate the behavior of false statements from the embarrassment of the identification of significance in China..This paper consists of four parts.The first part discusses the incompatibility between the current binary standard system and the real securities market by expounding the meaning,standard and significance of the materiality standard,which is in the trend of being gradually broken.At the same time,it defines the materiality standard and outlines the positive role of the boundary between illegal acts and legal acts;Then,it summarizes the legal norms and concrete practices of material determination in China,discusses the characteristics of the court’s "transfer" of the determination of materiality in the post jiumin minutes era,that is,weakening the direct treatment of materiality,and indirectly clarifying the "materiality" through the demonstration of causality,so as to lay a solid foundation for the later analysis.The transformation of the court’s major review function and the dislocation of review steps are actually the embodiment of the disadvantages of unclear major review power.The second part analyzes and summarizes the dilemma of material determination of securities misrepresentation in China with the help of empirical research results.In terms of unclear material review power,the absence of material judicial review power will lead to the confusion of administrative responsibility and civil liability,endanger judicial independence and lead to the risk of abuse of litigation.The establishment of significant judicial review power will also lead to the thought of linking administrative procedure with civil procedure.In the application of the criterion of materiality is not clear,whether the criterion of materiality is the establishment element of illegality or the dependent element of causality;Different courts have different standards,which leads to the confusion of diversified trial standards,and investors’ decision-making standards and price decision-making standards are too vague and not practical.Concepts of significance fall into the trap of circular explanations;In terms of the imperfection of the determination of the significance of predictive information,China has ignored the importance of predictive information for a long time.In fact,many small and medium investors often rely on earnings forecast and other predictive information to make investment judgments.Therefore,the judgment logic and exemption of the significance of predictive information are in urgent need of legal guidance.In the third part,we draw lessons from the material determination of foreign securities misstatements,summarize the development of material determination of foreign securities misstatements,and study the constant revision of material determination by American courts in judicial practice: In the case of SEC vs.Texas Gulf Sulphur,the Probability/Magnitude standard was established.In The case of TSC Industries vs.Northway,the concept of rational investor was introduced into the investor decision standard and the degree of influence was clarified.In the case of Basic Inc.Vs.Levinson,the significance standard was reaffirmed and the significance of the predictive information of uncertainty was determined.In re Donald J.trump casino sec Litig.The standard of significance of predictive information is confirmed in the case.At Christine Asia Co.v.Alibaba GRP In the case of Holding Ltd.,the recent view of the United States Court on materiality was expounded.In addition,it also combs the materiality standards of the United States,Britain,Japan,Germany,the European Union,Australia and Chinese Hong Kong,trying to learn from the useful part.The fourth part is the path to improve the identification of the significance of securities misstatement in China: First,clear the court has significant right of judicial review,the effective connection of administrative procedure and civil procedure,the referee in the administrative law enforcement and civil lawsuit does not need to maintain consistency on the basis of encouraging program concurrence of courts and the securities supervision institutions to establish information exchange platform,suggested that shape the "expert" court of false statement cases To introduce financial knowledge to the jury to play an auxiliary role in the trial.Secondly,abandon the binary standard system which simply takes INITIAL public offering as the node,and constantly try the "new binary standard system" in practice,which gives consideration to investor decision-making standard and price decision-making standard,but gives priority to objective standard.At the same time,we should introduce the event analysis method to perfect the price decision-making standard,refine the concept of significance and limit the scope of rational investors with the help of quantitative analysis to improve the maneuverability of investor decision-making standard.Finally,improve the predictive information significant decision logic,under the precondition of events has the possibility of using a combination of quantitative analysis and qualitative analysis identified significant predictive information,build system of safe port at the same time,clear what is sufficient advance warning "meaningful",reduce the risk of the securities market overall level.