Key Litigation Points in Securities Fraud Misrepresentation Liability Disputes

Taking Beijing as an example, among first-instance cases of securities fraud misrepresentation liability disputes filed over the past five years, all fall under the jurisdiction of the Beijing Financial Court. II. Litigants (A) Plaintiffs Eligible to File Civil Compensation Claims for Securities Fraud Misrepresentation Investors, security holders, trustees, and asset management product managers—among whom investors and security holders include market participants such as securities firms, fund management companies, insurance companies, trust companies, and commercial banks, acting through legally established securities investment products. (B) Liable Parties III. Types of Misrepresentation IV. Loss Assessment The scope of civil compensation liability borne by information disclosure obligors is limited to the actual losses suffered by plaintiffs as a direct result of the misrepresentation, specifically including: (A) Investment differential loss; (B) Commissions (0.03%) and stamp duty (0.1%) attributable to the investment differential loss. In securities fraud misrepresentation liability disputes, the term “Three Dates and One Price” refers to: the date of misrepresentation implementation, the date of disclosure (or correction), the benchmark date for calculating investment differential loss, and the benchmark price for calculating such loss. Implementation Date: The date on which the information disclosure obligor makes the false statement or on which the false statement occurs. Disclosure Date: The date on which the false statement is first publicly disclosed and becomes known to the securities market via nationally influential media—including newspapers, radio, television, regulatory agency websites, trading venue websites, major portals, or industry-renowned self-media platforms. Benchmark Date: The cutoff date prescribed to reasonably delimit the calculation period for losses, thereby confining plaintiffs’ recoverable damages strictly to those caused by the false statement. In markets employing centralized bidding, the benchmark date is the day on which cumulative trading volume of the affected security reaches 100% of its freely tradable shares, commencing from the disclosure or correction date. If cumulative turnover rate reaches 100% of freely tradable shares within ten trading days, the tenth trading day serves as the benchmark date; if not reached within thirty trading days, the thirtieth trading day is designated the benchmark date. Benchmark Price: The average closing price of each trading day between the disclosure (or correction) date and the benchmark date, used as the benchmark price for loss calculation.

When Biotech Companies Are Swept Up in a Wave of Lawsuits

Compiled by Jim Edited by Bu Qi The biotechnology industry is facing a legal storm—and litigation growth has already outpaced the industry’s own development. Justin Kozak, Head of Life Sciences at Founder Shield, notes that biotech-related securities litigation rose by 4.7% in 2024 compared to 2023: of the 222 securities class-action lawsuits filed in U.S. federal courts in 2024, 47 targeted biotech firms—representing a striking 21.1%. This figure marks the highest level since 2020. Before exploring the drivers behind this surge, it is essential to understand what constitutes a securities class-action lawsuit. In short, such suits are typically brought collectively by investors alleging corporate fraud or misconduct that caused them financial harm. In the biotech sector, many securities class actions stem from financial misconduct—for instance, clinical trial failures or misleading financial disclosures. Kozak cites Frequency Therapeutics, which faced litigation after its clinical trial for a hearing-loss treatment failed to meet its primary endpoints. Investors alleged the company had made misleading statements regarding the trial’s prospects. Another example is Kiromic BioPharma. The SEC filed suit against the company, accusing it of failing to disclose critical information about the clinical hold placed on two of its drug applications—a material omission that misled investors about the status of its clinical trials. Clearly, the biotech industry faces mounting legal risks. The question is: What should biotech companies do? 01 Why Are Lawsuits Against Biotech Surging? It bears noting that while the surge in biotech litigation warrants attention, it is not the only sector experiencing such growth. Financial services, manufacturing, and healthcare industries are likewise witnessing similar increases in litigation. According to Kozak, this broader trend is driven by multiple factors—including heightened regulatory scrutiny and evolving legal standards. So why are biotech firms especially vulnerable to securities class actions? First, the FDA’s intensified focus on patient safety and data integrity has led to stricter oversight, thereby increasing litigation exposure for pharmaceutical companies. Second, intellectual property in biotech is inherently complex—particularly in emerging fields like CRISPR—making patent disputes frequent. As widely observed, patent litigation is common in biotech, especially concerning novel technologies. With intensifying competition, companies increasingly resort to litigation to protect their innovations. Moreover, innovation often outpaces regulation—and AI development is advancing especially rapidly. As AI applications in drug discovery grow more widespread, they bring new legal and ethical challenges. A novel trend emerged in 2024: securities class actions alleging “AI fraud”—i.e., companies exaggerating their AI capabilities to mislead shareholders. In 2024, questions arose whether the AI industry stands on the brink of a bubble burst—much like the internet sector did in the 1990s. Back then, excessive investor enthusiasm for internet companies drove stock prices skyward, even though many lacked proven profitability or viable business models.

Chemours Company Faces Securities Fraud Class Action Over Opteon Demand Claims

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A securities fraud class action lawsuit alleges Chemours made misleading statements regarding Opteon product demand, causing a stock drop. Investors have until December 7, 2026, to file lead plaintiff motions.

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Chemours Co. Faces Securities Fraud Lawsuit Over Opteon Demand Claims

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Chemours Company Faces Securities Fraud Class Action Over Opteon Demand Claims

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