Civil Liabilities of Securities Fraud

• Main Authors: Shih-Hao Wang, 王識豪
• Other Authors: In-Jaw Lai
• Format: Others
• Language: zh-TW
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/59043589925636016735

碩士 === 臺灣大學 === 國家發展研究所 === 98 === The corruption of exchange listed companies in our country’s stock market keep pouring in since 2000. It not only injures the equity of the stock market, but also harms the confidence of investors. If we keep indulging it, the investors who are placed in the position of the information minority would withdraw from the market one after another. It would make the enterprise unable to collect enough working capital, causing the capital market atrophied and the social competition ability will fall. Therefore, how to guard against illegal act on the stock market becomes an important topic that we must face at present stage. Recently, the main illegal act of stock market is securities fraud behavior. If a company uses false or fraud means, makes the investors arise misunderstanding and causes the damage of investors, the company must take civil liabilities, criminal liabilities and administration liabilities for its securities fraud. From the economic point of view, the majority of investors only fix attention on whether they acquire the civil compensation. Imposing crime liabilities or administration punishment on delinquents would produce determent effect, but has no substantial benefit for victim. However, the stock market management of our country is over-emphasized to the administrative supervision and the criminal liabilities, so the civil liabilities is neglected. The reason that the civil liabilities is ignored before, is not because of the law lack of the foundation of the right of claim of compensation, but operation of actual situation. In the civil liabilities, investors take an action for their damage against the defendant to claim on compensation. The litigation procedure is predominated by the investor, so the plaintiff must undertake the burden of proof, therefore affirming "causation" between the parties playing an important role in litigation procedure.The stock market has its feature ; if we use traditional torts claim for the securities fraud compensation, the burden of proof is undertaken by the plaintiff. It is almost imposible for plaintiff to get compensation through the litigation.So, in the compensation case of securities fraud, studies and judge in our country often quote American judicial precedent and "fraud-on-the-market theory" as a basis theories, leading to the conversion burden of proof.Although our judges have consciousness on this issue, there are still lack of opinion consistency. This will make an influence on the protection of the investor and the maintenance of the bargain market.Besides, there're still dissension on the nature of liability, such as, the scope of behavior person's subjectivity, the affirmance of compensator and the calculation of compensation. Therefore, the core of this paper is general securities fraud, causation and the scope of damage. Chapter 2 discuss the theories of securities fraud, explain the outline of securities fraud from the intension of misrepresentation, and extend it to Chapter 3 to discuss nature of liability, subjective requirement of compensator and judge standard. In Chapter 4, we talk about the causation theories of securities fraud, discussing if we could combine cause-in-fact of establish of liability from continental law system and transaction causation from American law? if we could combine cause-in-law of establish of liability and the causation of extent of responsibility and loss causation from American law? In Chapter 5, we talk about the theories of transaction causation, demonstrate if fraud-on-the-market theory should be established on efficient market and if the theories could be adopted on our stock market. Chapter 6 introduces American Federal trial court and Supreme Court decision, analyzes loss causation and review the standpoint from before and after the event, craving the most suitable affirming standard. Chapter 7 analyzes the difference between out-of-the-pocket method and gross income loss and the impact to the injuring party’s liabilities scope. Chapter 8 is the conclusion. This paper is expected to help reduce the antinomy and conflict of judicial decision, deter illegality and fill up damage.