Practical Guide to Stock Investor Rights Protection (Civil Compensation for Securities Misrepresentation)

I. What Is Stock Investor Rights Protection? Stock investor rights protection generally refers to civil redress actions whereby investors—having suffered losses due to illegal acts committed by listed companies, such as misrepresentation, fraudulent issuance, insider trading, or market manipulation—lawfully claim compensation from responsible parties. Currently, the most common and institutionally supported type is civil litigation concerning liability for securities misrepresentation. Common forms of misrepresentation include: fabrication of financial statements; failure to disclose material events; misleading statements; and grossly inaccurate earnings forecasts. II. Three Conditions That Must All Be Met to Claim Compensation III. Four Key Time Points IV. Scope of Compensable Losses Pursuant to Article 25 of the Provisions on Several Issues Concerning Civil Compensation for Tortious Acts of Misrepresentation, the scope of compensation is limited to the investor’s actual losses, including: 1. Investment differential loss (the core component)—calculated as the difference between the average purchase price and the average sale price (or benchmark price), multiplied by the number of shares held; 2. Commission and stamp duty corresponding to the investment differential loss; 3. Interest losses on the above amounts (calculated at the prevailing demand deposit interest rate of commercial banks). V. Remedial Channels (ordered from lowest to highest cost) VI. Statute of Limitations VII. Documents Required for Filing a Lawsuit 1. Identity documentation: photocopy of ID card (for natural persons) or business license (for institutional investors); 2. Evidence of misrepresentation: administrative penalty decision issued by the China Securities Regulatory Commission (CSRC), company announcements, notice of initiation of investigation, etc. (if available); 3. Transaction records: securities account information and trade statements (stamped with the official seal of the securities firm’s branch office), specifying transaction dates, quantities, and prices;

Key Litigation Points in Securities Misrepresentation Liability Disputes

Taking Beijing as an example, among first-instance cases concerning securities misrepresentation liability disputes filed over the past five years, all fall under the jurisdiction of the Beijing Financial Court. II. Litigation Parties (A) Plaintiffs Eligible to Initiate Civil Compensation Claims for Securities Misrepresentation Eligible plaintiffs include investors, security holders, entrusted managers, and asset management product managers. Investors and security holders encompass market participants—including securities firms, fund management companies, insurance companies, trust companies, and commercial banks—that lawfully establish securities investment products. (B) Liable Parties III. Types of Misrepresentation IV. Loss Assessment The scope of civil liability borne by the information disclosure obligor is limited to the plaintiff’s actual losses incurred as a result of the misrepresentation, specifically including: (A) Investment differential loss; (B) Commission (0.03%) and stamp duty (0.1%) attributable to the investment differential loss. In securities misrepresentation liability disputes, the term “Three Dates and One Price” refers to: the date of implementation of the misrepresentation, the date of disclosure (or correction), the benchmark date for calculating investment differential loss, and the benchmark price for calculating investment differential loss. Date of Implementation: the date on which the information disclosure obligor made the misrepresentation or on which the misrepresentation occurred. Date of Disclosure: the date on which the misrepresentation was first publicly disclosed and became known to the securities market via media with nationwide influence—such as nationally circulated newspapers, radio or television stations, regulatory authority websites, exchange websites, major portal sites, or industry-renowned self-media platforms. Benchmark Date: the cut-off date established to reasonably limit the calculation period for losses, thereby confining compensable damages strictly to those caused by the misrepresentation. In centralized bidding markets, 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 date of disclosure or correction. If the cumulative turnover rate reaches 100% of freely tradable shares within ten trading days, the tenth trading day shall serve as the benchmark date; if such threshold is not reached within thirty trading days, the thirtieth trading day shall be the benchmark date. Benchmark Price: the average closing price of each trading day between the date of disclosure (or correction) and the benchmark date, used as the benchmark price for calculating losses.

Chemours Company Faces Securities Fraud Lawsuit Following 18.63% Stock Drop

Oct 20, 2026

The Law Offices of Frank R. Cruz filed a securities fraud class action against Chemours after its stock fell 18.63% due to revised guidance on Opteon product demand. Investors have until December 7, 2026, to file as lead plaintiff.

PR Newswire

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