A Critique on Subjective Element of the Civil Liability on Certified Public Accountant Regulated by Securities and Exchange ActScienter v.s. Negligence

• Main Authors: Lee, Ching-Ping, 李靜平
• Other Authors: 莊永丞
• Format: Others
• Language: zh-TW
• Published: 2013
• Online Access: http://ndltd.ncl.edu.tw/handle/41665767497880623341

碩士 === 東吳大學 === 法律學系 === 101 === Certified public accountants（CPA）play the role of a gatekeeper in the capital market. What is the subjective element applicable to a gatekeeper when he/she shall bear the civil liability under the Securities and Exchange Act? Over the years, regulators, companies, accountants and investors are concerned about this issue. Most securities regulators in the world refer to the U.S. Securities Act of 1933 and the U.S. Securities and Exchange Act of 1934 to regulate their capital markets. The Securities and Exchange Act of Taiwan was also drafted based upon and mirrors the U.S. legislation. To explore the legislative background of Paragraphs 1 to 3, Article 20 of the Securities and Exchange Act, we find it also refers to the U.S. Section 10 (b) which is a blank authorization. The case of the U.S. Supreme Court in 1976, Ernst & Ernst v. Hochfelder, ruled that CPA’s subjective element of civil liability is scienter（which shall be interpreted to contain recklessness）. However, our legal commentators and courts diverse on this issue: some of them argue that the subjective element is intent, some of them argue that it is gross negligence and others argue that it is negligence. In this thesis, first, our analysis focuses on the role played by the accountant in the capital markets. Second, we explored the legislative background of the Securities and Exchange Act which emphasizes the anti-fraud provision and the principle of mandatory disclosure, the U.S. Supreme Court in Basic Inc. v. Levinson admitted the fraud-on-the-market theory based on the assumption of the efficient capital market hypothesis and ruled that the issuer’s dissemination of information has a reliance relationship with the trading of stocks by investors. Third, Paragraphs 1 to 3, Article 20 of the Securities and Exchange Act refer to the U.S. legislative provision, the U.S. Section 10(b); the Securities and Exchange Act preempts the Companies Act; the trading environment in the capital market is non-specific person vis-à-vis non-specific person, unlike the traditional trading environment under the civil code, i.e., specific person vis-à-vis specific person. Therefore, the subjective element under Paragraph 1, Article 184 of the Civil Code, i.e., intent or negligence, cannot apply to the capital market. Finally, this thesis argues that Article 20 of the Securities and Exchange Act is an independent tort, the subjective element of which shall be intent（including reckless）. In 2005, CPA failed due to play a good gatekeeper role, Supervision units created an aggravating accountant civil liability, reference to the U.S. Private Securities Litigation Reform Act (PSLRA) of the Securities Exchange Act Section 20-1 paragraph 5, additional accountant subjective element of negligence civil liability. First, we explored the proportion of the legislative process to invoke civil liability environmental backgrounds fallacy. Second, supplemented by PSLRA and the legislative background of the capital market after the implementation of the merits and demerits to be demonstrated. Third, the argument Securities Exchange Act Article 20-1 a continuation of the Securities Exchange Act provisions Article 20, in essence, is still an independent tort, but also different from the civil law 185 special common violations. Finally, inferences to participate in scienter（contains recklessness）acts of all direct and indirect participants (including companies and accountants) should share the burden of joint and several liability, while the proportion of joint and several liability under the sole responsibility of the internal allocation problem. Our analysis the Yuan proposed the deletion of Article 20-1 of the Securities Exchange Act Paragraph 5 of negligence civil Proportion liability of accountants, and paragraph 3 provided on the civil liability of accountants added "joint and several" liability of the text and use it as the default method of rational norms of public choice.