The civil compensation case of misrepresentation in the securities market can be tried as representative litigation

 The civil compensation case of misrepresentation in the securities market can be tried as representative litigation

Pilot representative litigation according to conditions

With regard to the relevant issues in the field of securities disputes, the minutes pointed out that since the implementation of the provisions of the Supreme Peoples Court on the trial of civil compensation cases caused by false statements in the securities market, new situations have emerged in the development of the securities market, and the trial of Securities False statements disputes has put forward higher requirements for judicial capacity. We should give full play to the role of expert witnesses so that the facts of the case can be identified in line with the basic common sense of the securities market and the generally recognized or recognized rules of experience. The responsibility should be matched with the infringement and the degree of subjective fault. While effectively safeguarding the legitimate rights and interests of investors, we should realize the function of deterring illegal activities through civil liability investigation, and maintain open, fair and just capital Market order.

According to the minutes, in the determination of the transfer of cases under common jurisdiction, if the plaintiff files a lawsuit against the defendant for the false statement act other than the issuer or the listed company, and the defendant applies for adding the issuer or the listed company as the joint defendant, the peoples court shall allow it. If the peoples court finds that other peoples courts with jurisdiction have accepted civil compensation cases caused by the same false statement in advance after the addition, it shall, in accordance with Article 36 of the judicial interpretation of the civil procedure law, transfer the case to the peoples court that filed the case first. In terms of the trial mode of cases, in addition to the traditional one case, one stand, and one trial separately, some peoples courts have carried out reforms such as combining part of the cases, entrusting mediation on the basis of the model judgment, etc., initially realizing the intensive trial of cases and the litigation economy. On the basis of summing up the practical experience of trial, the local peoples courts with conditions can choose the representative litigation mode stipulated in Article 54 of the civil procedure law for trial cases, and gradually carry out pilot work to ensure that investors can maintain their legitimate rights and interests conveniently, efficiently, transparently and cheaply, so as to build a securities civil litigation system in line with Chinas national conditions Trial experience. If more than one investor brings a lawsuit to the peoples court for the same false statement and can use the representative litigation method to try the case, the peoples court can register the investor as a joint plaintiff according to the number, nature, implementation date, disclosure date, correction date and other time nodes described in the plaintiffs indictment. If the plaintiff claims that the defendant has made multiple false statements, it may register the case separately.

If the peoples court decides to hear a case in the manner prescribed in Article 54 of the civil procedure law, it shall first examine whether the defendants act constitutes a false statement, whether the trading direction of the investor is consistent with the false statements of induced excess and induced emptiness, and the basic facts of the case such as the implementation date, disclosure date or correction date of the false statements before issuing the public announcement.

Where an investor protection institution established by the state brings a lawsuit in its own name, or accepts the entrustment of an investor to appoint a staff member or an agent ad litem to participate in the trial of a case, the peoples court may agree that the institution or the party acting as its agent shall act as a representative.

According to the minutes, the disclosure and correction of false statements refer to the fact that false statements are known and understood by the market, and their accuracy is not necessary for the mirror image rule, and it is not required to reach a comprehensive, complete and accurate level. In principle, as long as the trading market has an obvious response to the information such as the filing investigation of the regulatory authorities and the disclosure articles published by the authoritative media, the peoples court shall support one partys plea that the market has already known the false statement according to law.

The minutes pointed out that in the trial practice, some peoples courts had a confused understanding of the important elements and the trust elements, and it should be noted that the illegal act of information disclosure recognized by the administrative penalty had no impact on the trading decisions of investors, so as to deny the importance of the illegal act. Materiality refers to information that may have an important impact on investors investment decisions. If a false statement has been subject to administrative punishment by the regulatory authorities, it should be considered as a significant illegal act. In the process of the trial of the case, the peoples court shall not support the defense that one partys act of making the punishment decision by the regulatory authority is not significant, and shall explain to it that the defense is not the trial scope of civil and commercial cases, and shall be solved through administrative reconsideration and administrative litigation.

The contract of off-site capital allocation should be considered invalid

The minutes also includes that it is an important part of maintaining the transparency and financial stability of the financial market to bring the credit transactions of the securities market into the scope of the unified supervision of the state. Unregulated over-the-counter capital allocation business not only blindly expands the scale of credit transactions in the capital market, but also easily impacts the order of transactions in the capital market. As one of the main credit trading modes of the securities market and one of the core businesses of the securities operating institutions, margin trading is a financial business that is authorized by the state according to law. Without approval according to law, no unit or individual may illegally engage in capital allocation business.

From the perspective of trial practice, the over-the-counter capital allocation business mainly refers to the use of Internet information technology by some P2P companies or private capital allocation companies to build a financing business platform that is free from the regulatory system, connecting the three parties, i.e. the investor, the investor and the securities business department. The capital allocation companies use the secondary warehouse function of the computer software system to put their own funds Or the act of lending money to the user at a lower cost to earn interest income. The business activities carried out by these over-the-counter capital allocation companies are essentially financing activities that can only be carried out by securities companies according to law. They not only avoid the restrictions of regulatory authorities on the sources of funds, investment targets, leverage ratio and many other aspects in the margin trading, but also intensify the irrational fluctuations in the market.

In the trial process of the case, in addition to the securities companies that have obtained the qualification of margin trading and securities lending and the margin trading businesses carried out by the clients, the peoples court shall, in accordance with Article 142 of the securities law and Article 10 of the judicial interpretation (I) of the contract law, deem the over-the-counter capital allocation contract between any other unit or individual and the user as invalid.

After the over-the-counter capital allocation contract is confirmed to be invalid, the peoples court shall not support the request of the capital allocation party to pay the agreed interest and expenses to the user in accordance with the over-the-counter capital allocation contract; the peoples court shall not support the request of the capital allocation party to share the income generated by the use of the capital allocation in accordance with the over-the-counter capital allocation contract; the user shall take the investment loss caused by the use of the capital allocation as the reason The peoples court shall not support the request for compensation from the allocation party; if the user can prove that the user cannot close the position and stop the loss in time because the allocation party controls the account by changing the password or other means, and accordingly requests the allocation party to compensate for the losses incurred, the peoples court shall support it according to law; if the user can prove that the allocation contract is concluded due to the solicitation and inducement of the allocation party, the request shall be made If the allocation party compensates for all or part of its losses, the peoples court shall comprehensively consider such factors as the way of the allocation Partys solicitation and persuasion, the actual impact on the user, the users own investment experience, risk judgment and bearing capacity, and make a judgment that the allocation party shall bear the compensation liability corresponding to its fault.

Clarify five aspects of financial field

On the whole, the minutes focuses on the unified judgment thinking of the disputes in the trial of company disputes, contract disputes, guarantee disputes, financial disputes, bankruptcy disputes and other cases. The minutes responded to the disputes of agreement on gambling, accelerated maturity of shareholders contribution, restriction of voting rights, liability of liquidation obligor of limited liability company, denial of companys personality, external guarantee of company, etc., and clarified the validity of contract, performance and relief of contract and some disputes in loan contract. For the general rules of security, real estate security rights, real estate security rights, non typical security and other issues, the minutes also respectively responded.

The reporter noted that the part of the minutes related to the financial field includes five aspects: financial consumer protection, securities, business trust, property insurance, and bill dispute cases, and made clear provisions on the controversial issues in its practice. In order to further hear the bankruptcy cases, the summary again emphasizes the general idea and the next work focus of the bankruptcy trial work, and in terms of the handling of the debtors property preservation and execution procedures after acceptance, the debtors self-management in reorganization, the restoration and exercise of the security interest in reorganization, the relevant issues during the execution of the reorganization plan, the trial and responsibility bearing of the cases that cannot be liquidated, etc Allow for detailed explanation and clarity. At the same time, the summary also standardizes the outstanding procedural problems such as the action of dissent, the action of cancellation by the third party, and the intersection of civil and criminal.

Source: responsible editor of Securities Daily: Yang qian_nf4425