Li Jing, senior reporter of The Paper
On May 11, the Shanghai Financial Court publicly sentenced the plaintiff Wei and other 315 investors and the defendant Shanghai Feile Audio Co., Ltd. in the case of a liability dispute for securities misrepresentation.
The scene of the trial was taken by Chen Wei.
The Paper (www.thepaper.cn) The reporter learned from the Shanghai Financial Court that the case is the Supreme People's Court's "Regulations on Several Issues Concerning Representative Litigation in Securities Disputes" (hereinafter referred to as "Representative Litigation Judicial Interpretation"). ”) was the first national representative litigation case for securities disputes after its introduction. According to the first-instance judgment, the defendant should pay the plaintiff a total of more than 123 million yuan in compensation for investment losses, with an average compensation of more than 390,000 yuan.
According to the Shanghai Financial Court, in August 2020, 34 individual investors including the plaintiff Wei Mou jointly selected 4 of them as litigation representatives, claiming that they are investors of Feile Audio (stock code: 600651). In November 2019, the Shanghai Supervision Bureau of the China Securities Regulatory Commission made an administrative penalty decision, finding that Feile Audio did not meet the conditions for project recognition revenue, resulting in inflated revenue and profit in the 2017 semi-annual report and the third quarter report, and the corresponding pre-increase announcement. precise. The plaintiff believed that the defendant's above-mentioned misrepresentation caused its significant investment losses, and sued for the defendant to compensate for the losses. 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 became the plaintiffs in this case, and 5 plaintiffs were elected representatives. The defendant compensated for investment losses, attorney fees, and notification fees totaling 146 million yuan.
The defendant argued that the misrepresentation had no causal relationship with the plaintiff's investment decision, and that the plaintiff was mainly affected by favorable industry policies and other factors to buy stocks; the part of the defendant's stock price affected by systemic risk should be deducted, and the defendant's business situation The loss caused by the deterioration is a normal investment risk and should not be compensated by the defendant, and the plaintiff's claim should be dismissed.
On March 30 this year, the Shanghai Financial Court heard the case in public. During the trial, the parties discussed whether there is a causal relationship between the defendant's misrepresentation and the plaintiff's purchase of stocks, whether there is a causal relationship between the defendant's misrepresentation and the plaintiff's losses, and whether the plaintiff's claimed attorney fees and notification fees are reasonable. After full debate, the members of the collegiate panel gave full play to their professional advantages to conduct in-depth investigations into the determination of the causal relationship of losses, the influence of system risks and other factors.
The Shanghai Financial 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.
315 plaintiffs all 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.
The defendant's evidence cannot prove that the plaintiff knew that the false statement involved in the case still bought the stock, nor could it prove that the plaintiff's transaction was not affected by the false statement, and that the favorable industry policy and other factors proposed by the defendant were not enough to rule out the establishment of the causal relationship of the transaction, but it was affected by the false statement. There is no causal relationship between some of the losses caused by the risk factors in the securities market and the misrepresentation involved, and the defendant should not be liable for compensation.
The court adopted the loss assessment opinion issued by the China Securities Capital Market Service Center, and determined that the amount of loss that the plaintiff should be compensated was the sum of the loss of the investment difference after deducting the risk factors of the securities market and the corresponding loss of commission, stamp duty and interest.
The risk factors of the securities market are deducted by the method of synchronizing the decline of individual stocks with the average decline of the index over the same period. This method takes the broad market index, the Shenwan first-level industry index, and the Shenwan third-level industry index as the combined reference index system, which fully considers investors. The weight of each transaction can objectively reflect the specific impact of market risk factors on the stock price of different plaintiffs during their holding periods.
For the attorney fees and notification fees incurred by the representative in the litigation to protect the rights of investors, the court shall support the reasonable part according to the law, and make the above judgment accordingly.
The Shanghai Financial Court stated that the successful handling of the above-mentioned cases provided a replicable sample of the Shanghai Financial Court for the further promotion of my country's securities class action system nationwide, and was of great significance for building a fair, efficient and convenient judicial protection system for small and medium investors. .
editor in charge: Gao Wen
proofreading: Liu Wei
