In recent years, with the continuous improvement of the legal system of China's capital market, the "toolbox" of investor protection system has become increasingly enriched. In addition to strengthening the protection of legislation, law enforcement, and judiciary, it is particularly important to promote the popularization of investor protection systems and enhance investors' self-protection awareness.

The first investor protection agency in the field of market manipulation in China to support litigation and loss calculation The case was won, and it was identified as a typical case of repeated stock manipulation by a habitual offender in the "2022 China Securities Regulatory Inspection 20 Typical Illegal Cases". According to the first instance judgment of the Fuzhou Intermediate People's Court on the case of supporting 8 investors in a lawsuit against Wang by the Investor Service Center, the court fully adopted the loss calculation opinion issued by the Investor Service Center, and all investors won the lawsuit, with a judgment of compensation of more than 600000 yuan, laying a case foundation for the subsequent issuance of relevant judicial interpretations.

1、 Brief description of the case

From June to November 2020, Wang controlled and used multiple securities accounts, continuously buying and selling two stocks through centralized funds and securities trading between the accounts he actually controlled, resulting in a significant deviation between his stock price and the overall market index.

The China Securities Regulatory Commission has issued the "Administrative Penalty Decision" and "Administrative Reconsideration Decision" regarding this matter, determining that Wang's above-mentioned behavior constitutes "manipulation of the securities market" as described in Article 192 of the Securities Law, and imposing corresponding penalties for his illegal behavior. Afterwards, eight investors believed that they had suffered investment losses due to Wang's manipulation of the securities market, and therefore filed a lawsuit with the Fuzhou Intermediate People's Court demanding that Wang bear the responsibility for compensation for the losses.

2、 Key points of the trial

The determination of the causal relationship between the manipulation of the securities market and the resulting damages, as well as the scope of compensation liability borne by the perpetrator and the calculation of losses caused, are the key to the trial of this case, "said Xu Jing, the handling judge of the Fuzhou Intermediate People's Court. The defendant Wang's manipulation of the target stocks was determined by the China Securities Regulatory Commission, and the plaintiff and eight others bought and sold the target stocks during Wang's manipulation, resulting in serious losses. Therefore, the defendant Wang should bear civil compensation liability in accordance with the law.

In terms of loss determination, the Fuzhou Intermediate People's Court conducted a review and analysis of the start date, end date, and impact elimination date of the manipulation behavior involved in accordance with the law. Drawing on the standard for determining the benchmark date in civil compensation for false statements in the securities market, the court reasonably limited the impact elimination date. At the same time, it entrusted the China Securities Capital Market Legal Service Center to assess the investment losses caused by the defendant Wang's manipulation of securities to the plaintiff and others, and based on this, ordered Wang to bear corresponding compensation liability.

3、 Event revelation

The manipulation of the securities market has a certain degree of concealment, and investors often find it difficult to detect in a timely manner. Especially for small and medium-sized investors, they are in a weak information position, with weak risk resistance and self-protection abilities, and face many difficulties in safeguarding their rights and claiming compensation. The verdict of the first civil compensation case for manipulating the securities market fully demonstrates the specific application of the civil compensation system for manipulating securities trading in judicial practice, which has reference significance for the handling of such cases in the future, and also helps to boost investor confidence and promote the healthy development of the capital market.

Every investor is the first guardian of their own legitimate rights and interests. They should start from themselves, fully understand their rights, actively exercise their rights, and protect their rights in accordance with the law. Participating in the securities market, investors have the right and obligation to supervise market manipulation behavior. If they discover market manipulation behavior, they can exercise their supervisory power by reporting it to regulatory authorities; If one suffers from infringement caused by manipulating the securities market, they can also file a claim in accordance with the law.

The materials are quoted from the website of China Securities Regulatory Commission and China Investor Network