DeHeng Lawyers Successfully Represented China's First Case of NEEQ Market Manipulation Claims

2022-09-29

Recently the judgment of a case represented by DeHeng lawyers on behalf of a well-known fund, China's first case of NEEQ (National Equities Exchange and Quotations) market manipulation claims, formally came into effect. The defendant then voluntarily complied with the judgment and paid over RMB 3 million in full. 

This is the largest compensation investors have ever received for market manipulation on not only the NEEQ system, but also all exchanges.  

The Shanghai Financial Court held that the defendant's manipulation affected the plaintiff's investment decision and had a causal relationship with the latter's investment loss. The court also held that the plaintiff had fulfilled the duty of care as a professional investor and was not at fault. After careful examination and trial, the court ordered the manipulator to compensate the plaintiff for the loss of more than RMB 3 million. 

The case is also the first in China involving securities trading manipulation. It involved many emerging legal issues, such as the determination of the causal relationship between the investment decision of investors of private placement and the illegal act of market manipulation, and the calculation of the investment loss. Its trial is forward-looking and of significant reference value. 

In particular the case has important reference value for claims cases where the investment portfolio managed by institutional investors has illegal circumstances such as false statement and market manipulation.

Chen Bo, Long Wenjie and Zhou Ziruo of DeHeng's Shanghai Office successively appeared in court on behalf of the client.