Our reporter Jia Li
The rhetoric that once caused a sensation for leading the name change of "Pitupi" is now in the spotlight again because of a class action lawsuit.
According to information from the Shanghai Financial Court, on the morning of July 25, the Shanghai Financial Court held a public hearing to hear a case concerning the liability dispute between the plaintiff Yu and other 13 investors and the defendant Xian Yan for manipulating the securities trading market.
This case is the first civil compensation dispute involving securities manipulation in the A-share main board market heard by the Shanghai Financial Court.
Liu Junhai, a professor at the Law School of Renmin University of China, said in an interview with a reporter from Securities Daily, "Xian Yan's civil compensation dispute over alleged stock price manipulation has attracted a lot of attention. The trial of this case also means that securities trading and insider trading are manipulated. Such malicious illegal acts are not only the focus of the relevant departments to crack down in accordance with the law, but also become a hot and difficult issue in civil litigation. Looking ahead, the illegal cost of manipulating the market will be further increased, and the protection of investors will be further strengthened.”
Loss identification and other issues become the focus
Xian Yan can be said to be an "old player" in the capital market. He has participated in the "Pitupi" name change farce and "1001 wonderful proposals". Today, the mess he left behind is still plaguing investors.
"It was miserable, and we are still waiting for the result." On July 26, an investor who filed a lawsuit against Xianyan told the "Securities Daily" reporter.
He filed the lawsuit along with 13 investors.
It is understood that there are not only 13 investors who have filed lawsuits against Xianyan, and some other investors have given up this right due to the small amount involved.
The case dates back to 5 years ago.
On March 30, 2017, the China Securities Regulatory Commission issued an Administrative Penalty Decision [2017] No. 29, arguing that during the period from January 17, 2014 to June 12, 2015, Xianyan adopted the advantages of centralized funds, shareholding, and information. Continuous trading, manipulation of the stock price of Shanghai Duolun Industrial Co., Ltd. (hereinafter referred to as "Duolun Shares", later renamed "Pitupi") by means of transactions between securities accounts actually controlled by him, false declarations, etc. The listed company's stock behavior shall be ordered to deal with the illegally held securities in accordance with the law, the illegal income of 578 million yuan shall be confiscated, and a fine of 2.892 billion yuan shall be imposed.
According to preliminary statistics, the stock price of Duolun shares rose from 6.68 yuan to 22.61 yuan during the period that the China Securities Regulatory Commission believed that the stock price was manipulated, an increase of 238%.
It is the investors who bought stocks during this period who made a claim against Xianyan this time.
The plaintiff investor alleges that it suffered losses by buying and selling Duolun shares during Xianyan’s manipulation of the securities market, that investment decisions were influenced by the manipulation, and that there was a causal relationship between the investment losses and the manipulation, and requested that the defendant Xianyan be ordered to be ordered. be liable for all of its investment losses.
But the plaintiff's claim was not endorsed by the defendant's fresh words.
Xian Yan believes that the plaintiff's trading behavior has no causal relationship with the defendant's manipulation behavior.
During the trial, the focus of disputes between the two parties mainly included the identification of manipulation, the causal relationship between transactions and losses, the specific method of calculating losses, and the statute of limitations.
The case will be decided on a sentencing date.
Can investors recover their losses?
Compared with civil compensation cases for misrepresentation, there are very few civil compensation lawsuits for manipulating the securities market.
Qi Chengjun of Beijing Yingke (Wuxi) Law Firm told the "Securities Daily" reporter, "The reason is that there is no clear judicial interpretation for reference, and judicial practice has not formed a unified judgment view, and it is very difficult to prove causality. "
In Qi Chengjun's view, "the calculation of investment losses should deduct the impact of abnormal stock market fluctuations and investors' irrational investment in 2015" in this case is one of Xianyan's important defenses, and it will also be a point of intense controversy in the trial.
However, because the result of the violation is relatively clear, Xian Yan has to bear the burden of proof for the establishment of this point, which is a relatively arduous task.
"At present, the court investigation and court debate phase of this case has ended. Generally speaking, the trial period of this case usually does not exceed one year. The aforementioned period deducts the period from the filing of the case to the court hearing is the time limit for the court to choose a day to pronounce judgment." Yingke Zhou Chuikun, a partner at the global headquarters, told reporters that in this case, Xian Yan's behavior of manipulating the market has basically been confirmed.
It is quite possible that investors can recover some of the losses, but it is more difficult to recover all the losses.
"One is whether Xianyan has sufficient compensation capacity; the other is that there may still be many implementation-level problems in reality."