A Study on the Rules of Determining Misrepresentation of Transaction Causation in Securities Market——An Analysis from the Perspective of Higher Duty of Care
Where the courts determine whether there is a transaction causation in the securities market misrepresentation,some investors will be required to bear a higher duty of care.There is no consensus in academic research and judicial practice on the rules relating to the higher duty of care.Through the analysis of the relevant cases involving the higher duty of care,the obligors of the higher duty of care can be ascertained by the professional investor test or the specific investor test;the content of the higher duty of care includes two aspects:formal and substantive elements;the burden of proof of the higher duty of care includes the burden of proof borne by the plaintiff and the burden of proof borne by the defendant.However,there are some deficiencies concerning the approach to determining the scope of obligors,the specific content of obligations and the distribution of the burden of proof.Therefore,the obligor should be identified by the specific investor test;it is necessary to further clarify or exempt the formal requirements imposed on individual investors and determine the range of the substantive elements sparingly through the process-focused approach.Meanwhile,the major burden of proof shall be imposed on the plaintiff and the defendant only bears the supplementary burden of proof.
securities misrepresentationprofessional investorshigher duty of care
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