CCTV news
CCTV news news on May 11, in November 2019, the Shanghai Regulatory Bureau of the China Securities Regulatory Commission made an administrative penalty decision on the listed company Feile Audio, finding that Feile Audio did not meet the conditions due to the project's confirmed revenue, resulting in the half of 2017. Inaccurate announcements of annual report, third-quarter report revenue, profit increase and corresponding performance pre-increase announcements. Since August 2020, several stock investors of Feile Audio have filed a lawsuit with the court as plaintiffs, arguing that the defendant Shanghai Feile Audio Co., Ltd. has caused major investment losses due to the above-mentioned misrepresentation, and demanded compensation from the defendant. The Shanghai Financial Court made a civil ruling to determine the scope of rights holders and issued a rights registration announcement. According to the "Several Provisions on Representative Litigation", a total of 315 investors in became the plaintiffs in this case, and 5 plaintiffs were elected as representatives. The defendant is requested to compensate more than 146 million yuan for various investment losses.
After the trial, the court held that the defendant Feile Audio's inflated operating income and gross profit in the published financial statements constituted an infringement of securities misrepresentation and should be liable for civil compensation. All 315 plaintiffs bought Feile Audio shares from the date of implementation of the false statement involved to the date of disclosure, and incurred losses due to selling or continuing to hold after the date of disclosure. It should be presumed that there is a causal relationship between their transactions and the false statement. In the end, the court made a judgment in accordance with the law based on the loss assessment opinion of the China Securities Capital Market Legal Service Center. sentenced the defendant to compensate the plaintiff for various losses totaling more than 123 million yuan, with an average compensation of more than 390,000 yuan. It is understood that this case is the first judicial practice of ordinary representative litigation after the promulgation of the Supreme People's Court's "Regulations on Several Issues Concerning Representative Litigation for Securities Disputes".
The reporter learned that in order to facilitate such securities dispute litigation, relevant investors can use a series of information application systems such as the representative litigation online platform of the Shanghai Financial Court and the protection cabin for small and medium investors to realize the acceptance of cases, review of the scope of rights holders, The registration of rights, the selection of representatives, the trial of the case and the subsequent filing of lawsuits by investors are all carried out online.
Since March 24, 2020, the Shanghai Financial Court issued the country's first specific implementation regulations on the representative litigation mechanism for securities disputes, and in strict accordance with the "Representative Litigation Judicial Interpretation", it has conducted an in-depth exploration of the entire process of ordinary representative litigation. The successful handling of this case provides a replicable sample for the further promotion of my country's securities class action system nationwide, and is of great significance for building a fair, efficient and convenient judicial protection system for small and medium investors.
Senior Editor of this issue Xing Tan
