"Investor Protection-Rules, Risk Knowledge" 30.

-- Insider trading, market manipulation, how do investors claim compensation?

What is the main basis for investor claims 1. insider trading and market manipulation cases?

Article 76 of China's Securities Law stipulates: "If insider trading causes losses to investors, the perpetrator shall be liable for compensation in accordance with the law." Article 77 stipulates: "If the manipulation of the securities market causes losses to investors, the perpetrator shall be liable for compensation in accordance with the law." The above two legal provisions are the main legal basis for investors to claim compensation for insider trading and market manipulation.

How can 2. insider trading investors claim?

Insider trading is a serious securities violation and has always been one of the focuses of securities regulation. At present, civil lawsuits filed by investors against infringers, in practice, insider trading and market manipulation cases are heard by the people's courts with reference to the existing judicial interpretation of misrepresentation acceptance standards and court jurisdiction rules.

Typical cases of insider trading investor rights protection:

The series of disputes over securities and futures insider trading liability between investors and Everbright Securities Co., Ltd. is the first insider trading claim in China that investors win through judicial judgment.

Case Brief: At 11:05 on August 16, 2013, Everbright Securities Company used a strategic trading system to purchase shares with a huge amount of funds of 23.4 billion yuan due to a procedural error when conducting a redemption arbitrage transaction for a trading open-ended index fund (hereinafter referred to as ETF), and the actual transaction was 7.27 billion yuan. After the market opened at 13:00 on the same day, Everbright Securities Co., Ltd. hedged the risk by selling short stock index futures and ETF without disclosure. It was not until 14:22 that it announced that "the proprietary business of the company's strategic investment department has problems in using its independent arbitrage system". In November of the same year, the China Securities Regulatory Commission made an administrative penalty decision on Everbright Securities Company, and determined that Everbright Securities Company's conversion of its stocks into ETF sales and short stock index futures contracts before the disclosure of inside information constituted insider trading, and imposed confiscation and Penalties such as a fine of 0.52 billion yuan. Since December 2013, investors v. Everbright Securities Company securities and futures insider trading liability disputes have been sued to the Shanghai Second Intermediate People's Court.

The court held that the administrative penalty of the China Securities Regulatory Commission and the effective judgment of the relevant administrative litigation have determined that Everbright Securities Company's conversion of its shares into ETF selling and selling short stock index futures contracts before the disclosure of inside information constitutes insider trading, which can be used as the basis for the determination of this case. Everbright Securities, which conducts so-called hedging operations to avoid losses without disclosure, should be found to be at fault. In terms of causality determination, during the insider trading period of Everbright Securities Company, if the plaintiff investor conducts 50ETF, 180ETF and its constituent stocks, IF1309, IF1312 transactions and its main trading direction is opposite to the insider trading direction of Everbright Securities Company, it is presumed that there is a causal relationship. Everbright Securities Company shall compensate investors for the losses caused by its fault. As for the calculation of the loss, the amount of the loss should be reasonably calculated based on the actual trading situation of the plaintiff investor, taking into account the difference between the transaction price and the benchmark price. As for the transactions conducted by the plaintiff investors during the non-insider trading period, it is a follow-up purchase damage. Everbright Securities Company is not at fault for the investor's losses, and it cannot be determined that there is a legal causal relationship, and the investor bears the investment risk.

3. how do investors defend their rights against market manipulation?

All acts of manipulating the securities market will inevitably affect the normal trading price of securities, disrupt the trading order of the securities market and harm the interests of investors. The majority of investors are the main body of the securities market and have the right and obligation to supervise market manipulation. If investors find that there is market manipulation, they should promptly report to the securities regulatory authorities and firmly say "no" to market manipulation ".