This is the 175th time we met in Lao Zhang’s backyard
(insert an advertisement, Lao Zhang’s backyard Douyin account (laozhanghouyuan) has been launched. If you are interested, you can follow it and leave a topic you want to hear)
April 27丨According to Tencent News, the China Securities Regulatory Commission has currently dispatched an investigation team to Luckin Coffee html, which is deeply involved in the financial fraud scandal, for more than 4 days. In addition, several auditors are conducting audits on Luckin's financial situation. A person close to the CSRC said that the revised Securities Law of the People's Republic of China, which came into effect on March 1, 2020, gives the CSRC the right to "long-arm jurisdiction": if securities issuance and trading activities outside the People's Republic of China disrupt the market order within the People's Republic of China and damage the legitimate rights and interests of domestic investors, they shall be handled and held legally responsible in accordance with the relevant provisions of this Law.
If you don’t know the whole story, please review:
Lao Zhang said: Luckin’s Little Blue Deer’s full perspective
The Canadian man behind Luckin— Lu Zhengyao
This matter has signs.
Luckin revealed that on the same day, SEC ( US Securities and Exchange Commission ) sent a letter to the China Securities Regulatory Commission, requiring both parties to cooperate and thoroughly investigate the matter.
htmlOn April 3, the China Securities Regulatory Commission stated: "Highly pay attention to the financial fraud incident of Luckin Coffee and strongly condemns the company's financial fraud. No matter where it is listed, listed companies should strictly abide by the laws and rules of the relevant market and fulfill their information disclosure obligations in a true, accurate and complete manner." htmlOn April 15, Liu He presided over the meeting of the Financial Committee of the State Council: Heavier handling of fraud, fraud, etc.On April 22, Bank and Insurance Regulatory Commission once again spoke out about the coffee fraud incident: "Luckin Coffee's financial fraud incident is bad in nature and has profound lessons. The China Banking and Insurance Regulatory Commission will firmly support and actively cooperate with the competent authorities to severely punish them in accordance with the law, always maintain a zero-tolerance attitude towards financial fraud, and jointly maintain a good market environment."
And on April 27, it was reported that the China Securities Regulatory Commission's investigation team has settled in Luckin Coffee and exercised the right of "long-arm jurisdiction", and Luckin Coffee has been fully taken over.
It is inevitable that the CSRC will enter Luckin Coffee.
On March 1, 2020, the revised Securities Law of the People's Republic of China began to be implemented. The CSRC has also been granted the right of "long-arm jurisdiction". According to Article 2 of the New Securities Law, if securities issuance and trading activities outside the People's Republic of China disrupt the market order within the People's Republic of China and harm the legitimate rights and interests of domestic investors, they shall be handled and held legally responsible in accordance with the relevant provisions of this Law.
The Luckin Coffee will become the first case under the jurisdiction of the new " Securities Law ".
What is long arm jurisdiction ?
Long-arm jurisdiction refers to a country's ability to exercise jurisdiction over commercial institutions in other countries according to its own country's laws, such as conducting investigations on foreign companies in accordance with the laws of the United States involving business. The term
is an "imported word". It first came from a concept in the US civil procedure law. As we all know, American laws vary from state to state, and long-arm jurisdiction can allow the laws of a state in the US to manage enterprises outside the state. Nowadays, this concept is widely used in the management of international trade and cross-border business. Long-arm jurisdiction has become very popular.
Give an example from the EU. In 2018, the EU introduced the strictest data protection law in history, the " General Data Protection Regulation " (GDPR). The regulations state that for Internet companies, even if you do not work in the EU region, as long as your users have citizens of EU countries, they must comply with EU data protection regulations. This is also a kind of long-arm jurisdiction. At the beginning of 2019, the French National Information and Freedom Commission issued an announcement stating that due to the US Google company violating relevant data privacy protection regulations, France will impose a fine of 50 million euros, or approximately 380 million yuan. This is the first ticket issued in accordance with the EU's General Data Protection Regulation. According to a report on April 14 this year, Facebook has faced $8 billion worth of complaints for alleged violations of the new EU data law.
According to reports, the U.S. Council of Institutional Investors (CII) has submitted a written application to PCAOB after the Luckin incident, requesting to review whether EY Huaming can continue to exist in the PCAOB's audit firm list. After the Luckin Coffee incident was exposed, several lawyers in the United States have publicly stated that investors who have purchased Luckin Coffee stocks between November 13, 2019 and January 31, 2020 can contact the law firm if they try to recover their losses. The deadline for the chief plaintiff is April 13, 2020.
So Luckin will face a class action lawsuit filed by investors.
LuCin’s future is likely to be that senior executives are collectively facing lawsuits, and related audit institutions, those who have helped Luckin enter the US IPO will be implicated.
Then as for whether it will go bankrupt, because it involves employment for many people, it may be reorganized.
Under U.S. law, crimes that provide false financial reports and intentional securities fraud are sentenced to 10 to 25 years in prison, with fines for individuals and companies up to $5 million and $25 million.
cup is too small, and you can't let go of your dreams...
It's okay if you cheat Americans. The problem itself lies in director liability insurance. It is indeed a routine operation for listed companies to purchase director liability insurance, but you cannot threaten it with self-destruction, and you have to drag Ping An's large insurance company into the water.
Indeed, it looks flawless in the process, but if you get the wool and get it on Tai Sui, there is always a reason to kill you.
If you go to the insurance company to claim compensation for intentional fraud, Ping An will probably sue Luckin.
Luckin and the Shenzhou Group probably played a lot in Hong Kong and US stocks, and used procedural justice and judicial isolation to jump left and right. Don’t forget how Kuaibo beat the procuratorate in court that year.
In addition, the current long-arm jurisdiction is probably to take the compensation that domestic institutions and insurance companies can get first...
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