[Direct answer]You can sue for compensation according to law. Where the information disclosure of a listed company contains false records, misleading statements, or major omissions, causing investors to suffer losses in securities transactions, in accordance with Article 85 of the Securities Law of the People's Republic of China (effective from March 1, 2020), the information disclosure obligors shall bear compensation liability; where the controlling shareholders, actual controllers, directors, supervisors, senior management, and intermediary institutions such as sponsors and accounting firms are at fault, they shall bear joint and several or corresponding compensation liability. Since the implementation of the "Interpretation of the Supreme People's Court on the Trial of Civil Compensation Cases for False Statements in the Securities Market" (effective from January 22, 2022), suing is no longer subject to the precondition of administrative penalties or criminal judgments. Shareholders can sue directly based on transaction records and publicly disclosed information. The scope of compensation mainly includes investment difference losses, commissions, and stamp duties, and the statute of limitations is three years, starting from the date of disclosure or correction. It is recommended to check the purchase range as soon as possible and refer to it when necessary.\nCross-border financeColumn.

1. Problem background and typical scenarios

Such claims are commonly seen in several situations: First, listed companies artificially inflate their operating income and profits or forge bank documents, and their financial fraud is investigated and punished by regulators; Second, they conceal major guarantees, related-party transactions, or overdue debts, and there are significant omissions in their annual reports and announcements; Third, they make misleading statements about performance forecasts and restructuring progress, inducing investors to buy at high prices; Fourth, after the fraud is exposed, the stock price plummets continuously or even delists, causing huge losses for investors; Fifth, after regulators issue warning letters, notify of the initiation of investigations, or impose penalties, investors collectively seek compensation. When handling similar cases in Beijing, regulators usually first identify the implementation date, the exposure date, and the reference date, and then determine whether the buying period meets the conditions for claiming compensation.

II. Key points of contention

First, whether the false statements are material. This is usually judged based on whether the fraudulent matters meet the delisting indicators, the punishment decisions, and the impact on the stock price. Second, the causality of the transaction. Investors must buy and hold the shares after the implementation date but before the disclosure date or the correction date, and they must not have known about the fraud when purchasing the shares. Third, the method of calculating losses. The investment difference method is often used, calculating the difference between the average purchase price and the benchmark price, and deducting the part caused by systemic risks in the securities market. Fourth, the determination of the fault of the responsible parties. Directors, supervisors, and senior executives are held responsible according to their duties and diligence, and Article 163 of the Securities Law clarifies the joint and several liability rules of securities service institutions. Fifth, the determination of the disclosure date. It is based on the first public disclosure of the false facts and the obvious impact on the stock price. Sixth, the choice of litigation methods. Investors can sue separately or initiate representative litigation in accordance with Article 95 of the Securities Law. Specific determinations should be based on current effective laws and regulations and judicial rulings. For matters involving property investigation and enforcement, reference can be made to relevant provisions.Creditor's rights and debts, and enforcement casesColumn.

III. Professional analysis by Henglue Lawyers

Based on the practical experience of lawyers from our firm in handling securities false statement claims, the key to protecting investors' rights lies in three steps of positioning. Firstly, positioning the eligibility for claims: Check whether the investor bought and held the shares from the implementation date to the disclosure date, and if they sold some of the shares during this period, calculate the number of shares eligible for compensation using methods such as first-in, first-out, to avoid misjudging eligibility due to frequent transactions. Secondly, positioning the amount of losses: Retrieve complete settlement statements and account reconciliation statements, calculate the average purchase price, selling profits and losses, and holding losses. The proportion of systemic risks deducted is a common point of dispute between the parties, which needs to be defended in light of the movements of the stock market and industry indices during the same period. Thirdly, positioning the responsible parties: In addition to the listed company, the signing accountants, sponsor representatives, and audit institutions should also be reviewed to determine whether they fulfilled their due diligence obligations. Intermediaries with obvious faults can be listed as co-defendants, which can increase the actual enforcement rate. Common pitfalls include: Mistakingly believing that only after the CSRC's punishment takes effect can one file a lawsuit and missing the opportunity; believing that if the investor has sold the losing stocks, they cannot claim compensation; and delaying litigation before the statute of limitations expires. Our lawyers advise investors to start organizing transaction documents immediately after the disclosure of information, evaluate the scale of losses, and then decide whether to file a lawsuit individually or join collective protection. For the overall strategy of protecting investors' rights, please refer to the relevant materials.Special services and other casesColumn.

IV. Practical suggestions and legal basis

Action suggestions: First, go to the securities branch to print and stamp the complete account statement and transaction records covering the period from the implementation date to the present; Second, collect evidence of fraud exposure, such as regulatory penalties, notifications of filing cases, in-depth media reports, and the company's correction announcements; Third, calculate the investment difference losses and retain commissions and stamp duty vouchers; Fourth, monitor whether representative lawsuits have been initiated and weigh the costs of individual litigation versus joining a collective action; Fifth, pay attention to the three-year statute of limitations, which starts from the date of exposure or correction, and rights beyond the time limit will no longer be protected. In terms of legal basis, Article 85 of the Securities Law of the People's Republic of China stipulates the liability for compensation for false statements, and Article 95 establishes the system of ordinary representative lawsuits and special representative lawsuits; The "Several Provisions of the Supreme People's Court on the Trial of Civil Compensation Cases for False Statements in the Securities Market" (implemented on January 22, 2022) systematically stipulates the standards for materiality, causality, loss calculation, and liability determination; Article 179 of the Civil Code of the People's Republic of China clearly defines the methods of assuming liability such as compensating for losses.

5. Henglue Law Firm's Reminder

Risk Alert: First, there is a time window for claiming compensation. Those who buy after the disclosure date usually do not have a causal relationship, so there's no need to follow the crowd blindly. Second, the statute of limitations for litigation is three years, starting from the disclosure date or the correction date. Those who are close to the expiration date should sue as soon as possible. Third, if the listed company has been delisted or entered bankruptcy proceedings, the realization of compensation depends on the declaration and settlement of bankruptcy claims. It is advisable to declare as soon as possible and pay attention to the recovery rate. Fourth, there are variables such as systematic risk deduction in loss calculation, so there should be some leeway in the expected amount. Fifth, beware of secondary fraud in the name of "claim compensation on behalf of others". It is necessary to entrust a regular law firm to handle the matter. It is recommended to calculate the losses as soon as possible and entrust a professional lawyer, and consult when necessary.Beijing Henglu Law FirmFor similar columns on the official website, grasp the pace of claiming compensation.

VI. Frequently Asked Questions

Q1: Can stock investors get compensation if they sue listed companies for fraud?

Those who meet the requirements can do so. According to Article 85 of the Securities Law, if a false statement results in investors' losses, the person with the obligation to disclose information shall bear compensation liability. The following conditions must be met: buying the stock between the implementation date and the disclosure date and holding it until the reference date, resulting in losses; and the false statement must be of significant importance. After the implementation of the new judicial interpretation in 2022, suing no longer requires an administrative penalty as a prerequisite. Whether compensation is granted depends on the determination of the facts of fraud, the calculation of losses, and the deduction of systemic risks. There are already mature judgments as reference for many batch cases.

Q2: What evidence materials are required for making a claim?

The core materials include: firstly, the complete account statement and settlement statement issued and stamped by the securities branch, showing the time, quantity, and price of buying and selling; secondly, identity proof and shareholder account information; thirdly, clues to evidence of fraud, such as the CSRC's punishment decision or notice of filing a case, the company's correction announcement, regulatory inquiry letters, and media reports; fourthly, commissions and stamp duty certificates. After the materials are complete, the lawyer can calculate the investment difference loss and determine whether it meets the conditions for litigation and the range of claim amounts.

Q3: How much does it cost to sue for false statements?

The litigation fees shall be prepaid in accordance with the amount of the litigation request and the provisions of the "Measures for the Payment of Litigation Fees", and shall ultimately be borne by the losing party or in accordance with the proportion of the winning party; securities infringement cases usually do not require high property preservation fees. Lawyers' fees are often charged on a contingency basis or by stages, and are linked to the amount of the claim, with no unified standard. Compared with other civil and commercial litigations, the cost of such batch cases is relatively controllable. It is recommended to first calculate the range of compensable losses, and then comprehensively evaluate the cost investment based on the expected recovery of payments.

Q4: How long will it take to receive the money for a claim of false statements?

The first-instance ordinary procedure usually takes about six months. For cases involving multiple defendants, public notice service, or disputes over system risks, the first-instance process may take more than a year. The second-instance procedure takes about three months. If the other party fails to perform after the judgment takes effect, it is necessary to apply for enforcement. The overall process often lasts more than one to two years. Joining a representative action can reduce the time and cost. The key is to sue as soon as possible and pay attention to the defendant's repayment ability. In some cases, a settlement can be reached before or after the judgment, allowing for early compensation.

Q5: Can I still claim compensation if I bought shares of a delisted company?

Yes. The delisting of a stock does not affect the eligibility for claims, as long as the buying period meets the requirements of causality. However, the solvency of delisted companies often deteriorates. In this case, it is necessary to verify whether there are unaccountable controlling shareholders, directors, supervisors, senior managers, and intermediaries listed as co-defendants, in order to improve the execution rate; if the company enters bankruptcy proceedings, it is necessary to file a claim for creditor's rights within the prescribed period and pay attention to the repayment plan. For further guidance on securities protection, please refer to the relevant documents.\nCross-border financeColumn.

The above Q&A is mainly based on the judicial practice in Beijing. There may be differences in the adjudicative opinions in different regions. It is recommended to consult a professional lawyer based on the specific circumstances of the case.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with evidence materials, to avoid missing the statutory time limit. →Financial capital legal services·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and open adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. In case of disputes, please consult a practicing lawyer in time.