Although the new judicial interpretation of misrepresentation in the securities market has established a standard system for judicial rulings,there remain many disputes in practice regarding the boundary of being legal or illegal,liability or non-liability,strict liability or proportional liability of misrepresentation in various financial products as cases become complex and diverse.Upon closer examination,most disputes arise from the questions of whether a financial product constitutes a security and whether intermediary institutions should bear joint and several liability.This paper suggests that based on the concept of"substantive securities"under the principle of functional regulation,it is essential to fully recognize the different risk logics of equity and debt,reasonably consider the distinctions between public offering and private offering as well as exchange trading and over-the-counter trading,accurately define the application scope of the"fraud-on-the-market theory,"appropriately allocate liabilities between issuers and intermediaries,and correctly understand the rule for"fault determination"under the new judicial interpretation of misrepresentation.All of these serve as the premise and foundation for interpreting and applying joint and several liability under the Securities Law.
distinction between equity and debtmisrepresentationpublic offeringexchange tradingjoint and several liability
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