[Direct answer]Compensation. Where the selling institution violates the obligation of suitability and causes losses to investors, it shall bear the liability for compensation. The compensation shall be based on the principal and interest as the basic framework, and the specific proportion shall be determined according to the degree of the institution's fault and causality. The key rule is the reversal of the burden of proof - if the institution cannot provide evidence that it has fulfilled the obligation of suitability, it shall bear the adverse consequences of the failure to provide evidence. For bank wealth management products, private equity funds, trust plans, and futures asset management, the rules are the same across different categories: the seller shall fulfill its due diligence obligations first, and the buyer shall bear its own risks afterwards.

I. Problem Background and Typical Scenarios

Retired elderly people are recommended high-risk private equity products by banks, young people are attracted by the "stable high returns" on apps and gamble everything, and enterprises' idle funds buy structured products that default when they mature — the scenarios of appropriateness infringement span across various financial products. A common misunderstanding among investors is that "once they sign the risk disclosure document with black and white terms, they can only accept their fate". In fact, signing the document does not mean exemption from liability: risk disclosure is just a formal requirement, and what the institution actually needs to review is whether it has sold the right product to the right person and whether it has explained the risks clearly.

II. Key points of contention

First, the constitution and performance judgment of the duty of appropriateness. Second, the establishment conditions of infringement liability. Third, the calculation standard of the scope of losses. Fourth, the defendant's choice of litigation path.

III. Professional analysis by Henglue Lawyers

The first layer is the obligation structure: The appropriateness obligation includes four aspects: understanding the client, understanding the product, risk matching, and informing and explaining. The Supreme People's Court's "Nine Notes on Private Investment Funds" established the basic rules for sellers to compensate for failing to fulfill their appropriateness obligations. Regarding performance judgment, the focus is on substance rather than form—for example, if the risk assessment does not match the client's actual situation, if the risk disclosure document contradicts the sales pitch, or if the qualified investor confirmation process involves questionable fund sources and identities, these may be deemed as performance defects. In the sales and management chain of financial products, the liability subject is determined based on their roles and faults, with the sales institution bearing primary responsibility for failing to fulfill its appropriateness obligations. The second layer is the liability elements: illegal acts—violation of appropriateness obligations (mis-selling, misleading explanations, and procedural fraud); losses—actual investor losses (principal losses and opportunity costs determined according to regulatory standards); causality—the link between the violation of appropriateness obligations and investment losses, with the most complete causality chain in mis-selling scenarios (where the product would not have been purchased based on the true risk level); fault—intentional misleading and procedural negligence differ in liability scope, with stricter penalties for fraudulent situations; and the four elements must be met for liability to be established. The third layer is loss calculation: The basic framework is principal plus interest—interest is determined according to benchmark interest rates for similar deposits during the same period; for partially loss-making products, losses are based on actual losses; for un-redeemed products, the determination point (redemption or evaluation) varies by case, with investors choosing the more favorable and evidence-based approach; the causality of market systemic factors and institutional faults is a contested issue—institutions must bear responsibility for their own faults, but this does not mean they must cover all market declines—investors should have reasonable expectations. The fourth layer is defendants and litigation pathways: Defendants are determined based on transaction structure—for bank-channel purchases, the bank is the defendant; for private placement products, managers, sales institutions, and custodians may be listed concurrently; and for third-party platform sales, the platform's role determines liability. Claims can be based on financial entrusted wealth management contracts or tort damages, with the latter offering the advantage of reversed burden of proof—institutions must prove they fulfilled their appropriateness obligations, and failing to provide recordings of dual recording, assessments, callbacks, or disclosures results in adverse outcomes. Beyond litigation, filing complaints with regulatory authorities is a parallel option, with regulatory outcomes supporting civil proceedings. The fifth layer is scenario differences: Private equity funds—qualified investor confirmation and cooling-off period callbacks are mandatory procedures, with each omission increasing claim space; trust plans—sufficient disclosure of fund investment and underlying assets is a review focus; bank distribution—illegal sales of non-bank-distributed products is the most severe form, with disputes over duty attribution for institutional management loopholes common; futures and derivatives—natural high risk levels, with defects in risk assessment and margin rules directly affecting liability determination. Different product categories require different evidentiary focus, with investors aligning their evidence with product categories.

IV. Practical suggestions and legal basis

The first step is to verify the procedures: evaluate, conduct double recording, conduct follow-up interviews, and confirm that qualified investors have no defects in each item. The second step is to determine the subject: identify the defendant according to the transaction chain, and review both sales and management responsibilities. The third step is to calculate the losses: list the loss base and interest rates, and reserve the space for the defense of causation. The fourth step is to choose the path: thoroughly understand the reversal of the burden of proof in infringement claims, and advance the supervision complaints in parallel. The main legal basis: relevant provisions of the Tort Liability Chapter of the Civil Code of the People's Republic of China, Articles 72 to 77 of the "Notice of the Supreme People's Court on Issuing the Minutes of the National Court Civil and Commercial Trial Work Conference", and relevant provisions of the Securities Investment Fund Law of the People's Republic of China; the specific application shall be subject to the currently effective provisions.

5. Henglu Law Firm's Reminder

Three key points of suitability claims: signing the agreement does not exempt from liability; did the substantive review institution sell the right products to the right people? The burden of proof lies with the institution, and procedural defects are the entry point for claims; the principal and interest are the foundation, and the defense of causality determines the final proportion. For cases involving suitability claims and financial disputes, you can seek assistance through legal channels.\nFinancial capital and cross-border transactions involving foreign entities.The service obtains an overall solution, which involves the combination of breach of contract and concurrence in commercial contractsBusiness and contract disputes in enterprisesFor reference, you can check the case study designs related to platesSpecialised legal servicesFor reference, you can check the section on collecting payments after winning the lawsuitCreditor's rights and debts, and enforcement cases板块。

VI. Frequently Asked Questions

Q1: How much is typically paid in compensation for appropriate sexual harassment?

Based on the principal and interest as the basic framework, the proportion is determined according to the degree of the institution's fault and the causal factors. Fraudulent situations are dealt with more severely.

Q2: Does this also apply to private equity fund losses?

Applicable. The requirements for procedures such as the confirmation of qualified investors in private equity and the follow-up visits during the cooling-off period are stricter, and there is a greater room for claims in the event of procedural omissions.

Q3: Within how long can I still claim compensation for losses?

According to the general rules of the statute of limitations, the time limit starts from the moment when the party knows or should have known that his/her rights have been infringed. It is advisable to fix the evidence as soon as possible, and it is recommended to consult an appraiser as soon as possible.

Q4: Should we pursue a path of infringement or breach of contract?

If the investor chooses to claim based on the financial entrusted asset management contract or infringement, the reversal of the burden of proof in the infringement path is more favorable to the investor.

Q5: How is the loss of products that have not been redeemed calculated?

The time point for determining the loss varies from case to case. It can be determined based on the redemption time point or the evaluation time point. When making a claim, it is advisable to choose a time point that is supported by evidence and favorable to oneself.

The above questions and answers are mainly based on the judicial practice in Beijing. There may be differences in the adjudication guidelines in other 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 the relevant evidence, so as to avoid missing the statutory time limit.Financial capital legal services·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on 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. If you encounter disputes, please consult a practicing lawyer in time.