Contents of Section

Chapter:

571 PDFTitle:SECURITIES AND FUTURES ORDINANCEGazette Number:L.N. 12 of 2003
Section:108Heading:Civil liability for inducing others to invest money in certain casesVersion Date:01/04/2003

(1) Where a person makes any fraudulent misrepresentation, reckless misrepresentation or negligent misrepresentation by which another person is induced-

        (a) to enter into or offer to enter into-
          (i) an agreement to acquire, dispose of, subscribe for or underwrite securities; or
          (ii) a regulated investment agreement; or
        (b) to acquire an interest in or participate in, or offer to acquire an interest in or participate in, a collective investment scheme,
the first-mentioned person shall, whether or not he also incurs any other liability (whether under this Part or otherwise), be liable to pay compensation by way of damages to the other person for any pecuniary loss that the other person has sustained as a result of the reliance by the other person on the misrepresentation.
(2) For the purposes of this section, where a company or other body corporate has made any fraudulent misrepresentation, reckless misrepresentation or negligent misrepresentation by which another person is induced to do any act referred to in subsection (1)(a) or (b), any person who was a director of the company or body corporate at the time when the misrepresentation was made shall, unless it is proved that he did not authorize the making of the misrepresentation, be presumed also to have made the misrepresentation.
(3) For the avoidance of doubt, where a court has jurisdiction to determine an action brought under subsection (1), it may, where it is, apart from this section, within its jurisdiction to entertain an application for an injunction, grant an injunction in addition to, or in substitution for, damages, on such terms and conditions as it considers appropriate.
(4) This section does not confer a right of action in any case to which section 40 of the Companies Ordinance (Cap 32) (whether with or without reference to section 342E of that Ordinance) applies.
(5) A person may bring an action under subsection (1) even though the person against whom the action is brought has not been charged with or convicted of an offence by reason of a contravention of this Part.
(6) Nothing in this section affects, limits or diminishes any rights conferred on a person, or any liabilities a person may incur, under the common law or any other enactment.
(7) For the purposes of this section-
        (a) "fraudulent misrepresentation" (欺詐的失實陳述) means-
          (i) any statement which, at the time when it is made, is to the knowledge of its maker false, misleading or deceptive;
          (ii) any promise which, at the time when it is made, its maker has no intention of fulfilling, or is to the knowledge of its maker not capable of being fulfilled;
          (iii) any forecast which, at the time when it is made, is to the knowledge of its maker not justified on the facts then known to him; or
          (iv) any statement or forecast from which, at the time when it is made, its maker intentionally omits a material fact, with the result that-
            (A) in the case of the statement, the statement is rendered false, misleading or deceptive; or
            (B) in the case of the forecast, the forecast is rendered misleading or deceptive;
        (b) "reckless misrepresentation" (罔顧實情的失實陳述) means-
          (i) any statement which, at the time when it is made, is false, misleading or deceptive and is made recklessly;
          (ii) any promise which, at the time when it is made, is not capable of being fulfilled and is made recklessly;
          (iii) any forecast which, at the time when it is made, is not justified on the facts then known to its maker and is made recklessly; or
          (iv) any statement or forecast from which, at the time when it is made, its maker recklessly omits a material fact, with the result that-
            (A) in the case of the statement, the statement is rendered false, misleading or deceptive; or
            (B) in the case of the forecast, the forecast is rendered misleading or deceptive;
        (c) "negligent misrepresentation" (疏忽的失實陳述) means-
          (i) any statement which, at the time when it is made, is false, misleading or deceptive and is made without reasonable care having been taken to ensure its accuracy;
          (ii) any promise which, at the time when it is made, is not capable of being fulfilled and is made without reasonable care having been taken to ensure that it can be fulfilled;
          (iii) any forecast which, at the time when it is made, is not justified on the facts then known to its maker and is made without reasonable care having been taken to ensure the accuracy of those facts; or
          (iv) any statement or forecast from which, at the time when it is made, its maker negligently omits a material fact, with the result that-
            (A) in the case of the statement, the statement is rendered false, misleading or deceptive; or
            (B) in the case of the forecast, the forecast is rendered misleading or deceptive.