What Shapes Private Securities Enforcement in China? An Empirical Study of Chinese Securities False Statement Civil Compensation Cases

42 Pages Posted: 28 Jun 2017

See all articles by Li Huang

Li Huang

Fudan University Law School; Stanford Law School

Date Written: June 28, 2017

Abstract

Securities litigation has become a common topic around the globe. As recognized, within the framework of securities enforcement, private litigation serves as a significant supplement to public enforcement. Distinct from systems in other jurisdictions, Chinese securities litigation features a dependence on public enforcement. However, obtaining a decision from public authorities does not necessarily ensure compensation. Many cases have been dismissed despite satisfying the public enforcement requirement, so it seems that other variables are also in play. What shapes securities litigation in China is the main concern of this research project. To answer this question, the paper demonstrates both quantitative and qualitative methods, incorporating multi-variable regression as the main methodology, supplemented by qualitative methodologies. The employment of multiple methodologies reduces bias due to a small sample, as do the diverse perspectives engendered via qualitative methodology. The major finding of the empirical study is that in addition to the influence of public enforcement, the considerations of social stability, local economic development, and the contemporary market conditions do shape the outcomes of securities civil cases in China. The result, to some extent, evidences a “piggy-back” effect on public enforcement, while local protectionism policies and a bad market sometimes might correlate to more conservative decisions.

Keywords: Securities Litigation, False Statement, Local Protectionism, Public Enforcement, Private Enforcement

JEL Classification: K4

Suggested Citation

Huang, Li, What Shapes Private Securities Enforcement in China? An Empirical Study of Chinese Securities False Statement Civil Compensation Cases (June 28, 2017). Available at SSRN: https://ssrn.com/abstract=2993634 or http://dx.doi.org/10.2139/ssrn.2993634

Li Huang (Contact Author)

Fudan University Law School ( email )

Beijing West District Baiyun Load 10th
Shanghai, California 100045
United States
8613917300377 (Phone)

Stanford Law School ( email )

Stanford, CA California 94305
United States
6504414103 (Fax)

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