A Study On Civil Liabilities Of Intermediaries For False Statement In Securities

With the promotion of the registration system reform,the "gatekeeper" role of intermediary agencies becomes increasingly important.In practice,in order to further clarify the "gatekeeper" liability,the state adopts stricter legal liabilities on intermediary agencies.With the promulgation of the Several Provisions on the Trial of Cases of Civil Compensation for Infringement upon False Statement in Securities Market by the Supreme People’s Court in 2022,the crackdown on False Statement in securities will gradually change from administrative dominance to judicial dominance.Against the background that the number of False Statement disputes in China will increase significantly,the determination and boundary of intermediary agencies’ liabilities in securities False Statement disputes are imminent.The Several Provisions on the Trial of Cases of Civil Compensation Arising from Infringement of False Statement in Securities Market have cancelled the pre-trial procedure,further unified the discretion criterion of various courts in the trial of cases of disputes over False Statement,and regulated the application of law in aspects of materiality,fault,causation and other aspects in the determination of the liabilities of intermediary institutions.However,due to the diversity and concealment of intermediary agencies’ behaviors in securities False Statement,and their liabilities are in the intertwined areas of securities law,company law and tort law,the courts face greater challenges in the trial of securities False Statement cases.In the current practice of the judicial determination of intermediary agencies’ civil liabilities of False Statement,there still exist prominent problems of different constitutive standards and forms of assuming tort liability.In the light of the above phenomena,by sorting out and summarizing the relevant judicial decisions and administrative penalty cases and analyzing the courts’ decisions and reasoning thoughts,the crux of the problem is that the classification of intermediary agencies’ faults in determining intermediary agencies’ liabilities of False Statement fails to be differentiated according to the actual situation in the trial process,fails to consider the causal relationship between each act and the damage result separately,and fails to regard materiality as an independent constituent element and over-relies on administrative penalty.Based on the above findings,this article discusses the determination of intermediary agencies’ liabilities of False Statement starting from the materiality element,the causal relationship element and the subjective fault element.Finally,it points out that in the trial process,the courts shall distinguish the degree of intermediary agencies’ fault in different cases according to the "reasonable person" standard,and meanwhile shall recognize the existence of reasonable trust between intermediary agencies;transaction causal relationship presumed based on the fraud market theory is not an irrefutable presumption,and the courts shall strictly apply the presumption of transaction causal relationship in light of the actual situation;when determining the causality of losses,the courts shall refer to the opinions of professional appraisal agencies;it is clarified that as one of the statutory constituent elements for the determination of intermediary agencies’ liabilities,the courts may adopt "price-sensitive standard" and "investors’ decision-making sensitive standard",and refer to financial data indicators as the standard to measure the materiality element.With respect to the reasonableness and legitimacy of "proportionate joint and several liability" created by the court in order to deal with the "deep pocket" phenomenon of liabilities borne by intermediary agencies,this article,in combination with the several tort theory and the operation logic of the capital market,provides an argument from the theoretical and practical perspectives.The final conclusion is that,compared with joint and several liability and supplementary liability,"proportionate joint and several liability" is more conducive to protecting the rights and interests of investors while reasonably controlling the scope of liability borne by intermediaries.In addition,there is room for "proportionate joint and several liability" in the current Civil Code system,and it has even been used in environmental tort liability.This article also discusses the scenarios in which "proportionate joint and several liability" is used by the courts and the standards for the division of responsibilities under "proportionate joint and several liability",in an effort to standardize the application of "proportionate joint and several liability" in judicial decisions.