The Zhitong Finance App learned that in order to effectively protect the legitimate rights and interests of financial consumers and investors, standardize the operations of financial institutions, and create a good financial legal environment, the Supreme People's Court, the People's Bank of China, the State Financial Supervisory Administration, and the China Securities Regulatory Commission have jointly released six typical cases of protecting the legitimate rights and interests of financial consumers and investors. The published cases cover various fields such as financial borrowing, fund management, digital finance, personal insurance, securities investment, etc., focusing on realistic hot spots and judicial difficulties such as formal clauses, fair trade, proper obligations, rights remedies, and multiple dispute resolution, focusing on showing the value leadership of financial trials for the high-quality development of the financial industry, and demonstrating the exemplary significance of building a fair, transparent, honest and secure financial market ecosystem.
The original text is as follows:
The Supreme Court, the People's Bank of China, the General Administration of Financial Supervision, and the China Securities Regulatory Commission jointly released typical cases of protecting the legitimate rights and interests of financial consumers and investors
Finance is the lifeblood of the national economy, and financial consumers and investors are important participants in the financial market. The People's Court has always been guided by Xi Jinping's idea of the rule of law, based on financial adjudication functions, strict and impartial administration of justice, and collaborated with supervisory authorities to improve financial consumer and investor protection mechanisms to help build a strong financial nation. In order to effectively protect the legitimate rights and interests of financial consumers and investors, standardize the operations of financial institutions, and create a good financial legal environment, the Supreme People's Court, the People's Bank of China, the State Financial Supervisory Administration, and the China Securities Regulatory Commission jointly issued six typical cases of protecting the legitimate rights and interests of financial consumers and investors.
The published cases cover various fields such as financial borrowing, fund management, digital finance, personal insurance, securities investment, etc., focusing on realistic hot spots and judicial difficulties such as formal clauses, fair trade, proper obligations, rights remedies, and multiple dispute resolution, focusing on showing the value leadership of financial trials for the high-quality development of the financial industry, and demonstrating the exemplary significance of building a fair, transparent, honest and secure financial market ecosystem. The first is to insist on legal protection and strengthen the obligation to explain formal provisions. In accordance with the law, people's courts properly grasp the dialectical relationship between equal protection and preferential protection, freedom of contract, and contractual justice to adjudicate financial disputes, so that people can truly make independent decisions and enjoy financial services fairly. Case 1 clearly states that financial institutions have an obligation to indicate and explain the formal terms of adjusting interest rates on loans, demonstrating the value orientation of protecting financial consumers' right to fair trade and the right to know in accordance with law. The second is to consolidate institutional responsibilities and implement proper management and seller due diligence. Financial adjudication and financial supervision are moving in the opposite direction and are being promoted in concert, and financial institutions are urged to strictly implement their obligation of appropriateness. Case 2 and Case 3. According to law, it is determined that sales institutions have failed to fulfill their obligation of suitability to sell financial products and should bear corresponding liability to promote the actual implementation of the “seller's responsibility, buyer's own responsibility” principle, forcing financial institutions to improve internal control compliance systems and embed consumer rights protection into the entire business process. The third is to break down technical barriers and ensure the right to choose financial consumer relief procedures. With the development of digital technology, while speeding up the development of technology finance business, financial institutions are also using technological advantages to seize the initiative in financial transactions and dispute resolution methods. They have established unreasonable conditions for financial consumers, and there is an urgent need to regulate them. Case 4 makes it clear that the fund company's act of forcibly changing dispute resolution methods after consumers have subscribed to the product by relying on the technical advantages of the app has no legal effect. Fourth, collaborative governance to perform the functions of multiple substantive dispute resolution mechanisms. Adhering to diversity of substance and efficient resolution of disputes in the financial sector is the common goal of administration of justice and supervision. In response to the characteristics of financial cases, with the support and cooperation of the supervisory authorities, the People's Court made comprehensive use of diversified resolution, mediation and settlement, model judgments, representative litigation, etc., to simplify the rights protection process, reduce disposal time limits, reduce rights protection costs, and provide financial consumers and small and medium-sized investors with convenient, efficient, and low-cost dispute resolution methods, and achieved good dispute resolution results. Case 5 eliminated the long cycle of initiating forensic examinations through legal mediation, enabling policyholders to obtain critical illness insurance claims in a relatively short period of time; Case 6 innovatively and comprehensively applied “model judgment+commissioned mediation+representative litigation” to perform the functions of multiple substantive dispute resolution mechanisms and protect the legitimate rights and interests of many small and medium-sized investors.
In the next step, the People's Court and financial supervisory authorities will closely follow the requirements for the deployment of the “Five Major Articles” of finance, deepen cooperation between government and courts, unite joint efforts to regulate financial service practices, and protect the legitimate rights and interests of financial consumers and investors in accordance with the law. Continuously optimize the financial legal environment, and focus on forming a good pattern of compliant management of institutions, rational consumption by the masses, precise regulatory measures, and strong judicial guarantees to help high-quality financial development.
Cases of protecting the legal rights and interests of financial consumers and investors
table of contents
Case 1: Financial institutions are obligated to prompt and explain the formal terms of the adjustment of loan interest rates
——A bank sued Pan and Li in a financial loan contract dispute
Case 2: Banks must not be exempted from the obligation of appropriateness on the grounds that there is no deceptive or misleading marketing behavior
——Su's lawsuit against a bank to entrust a financial management contract dispute
Case 3: Securities institutions should achieve “seller due diligence” when selling private equity products
——Yang XX sued a securities sales department, a third party, Chen, and an investment management center in a financial entrustment contract dispute
Case 4: Relying on the technical advantages of the app, the fund company's act of forcibly changing the dispute resolution method after subscribing to the product has no legal effect
——Fang's lawsuit against a fund company in a property damage compensation dispute
Case 5: Mediate and efficiently resolve critical illness insurance claims disputes according to law and promptly remedy the rights and interests of the parties
——Wu sued a life insurance company in a personal insurance contract dispute
Case 6: Innovate “Model Judgment+Delegated Mediation+Representative Litigation” to give full play to diverse dispute resolution efforts
——Liability dispute for misrepresentation of securities of a listed company
Case 1
Financial institutions are obligated to prompt and explain the formal terms of adjusting interest rates on loans
——A bank sued Pan and Li in a financial loan contract dispute
[Basic facts of the case]
Pan and Li signed a financial loan contract with a bank and loaned 750,000 yuan to a bank. Regarding the loan interest rate, there are three agreements in the contract: first, it is agreed that the initial loan interest rate is 6.9%; second, if the borrower fails to repay the principal amount in accordance with the agreement, 50% penalty interest will be added according to the agreed loan interest rate, and interest not paid in accordance with the contract will be compounded at the penalty interest rate; third, if the borrower fails to repay any of the principal and interest charges in accordance with the agreement and is continuously overdue for more than 15 natural days, the loan interest rate will be adjusted to apply the four-year loan market rate from the date of issuance The fixed interest rate is doubled, and the corresponding penalty interest is adjusted. In addition, the contract also stipulated details such as cancellation of default, collateral guarantees, and payment of the costs of fulfilling the claim. After the contract was signed, a bank issued loans to Pan and Li according to the agreement. Later, due to Pan and Li's failure to repay the loan, a bank filed a lawsuit, demanding that Pan and Li repay the full loan principal, interest, penalty interest and compound interest calculated at four times the one-year loan market quoted interest rate (LPR) and then raised 50%, as well as lawyers' fees, litigation fees, etc., and claimed that they had priority payment rights over the collateral disposal.
[Judgment details]
The People's Court of Shunde District, Foshan City, Guangdong Province found in the first instance that the interest rate clause was the core clause of the loan contract, that the lender had the obligation to fully disclose the loan interest rate, and that the guarantee of the loan contract was an expression of the borrower's true intention. Financial institutions shall promptly, truthfully, accurately, and fully disclose the expenses and penalties that financial consumers should bear. In this case, by applying the interest rate adjustment clause, the lender claimed that the borrower's interest rate was first adjusted from an annual interest rate of 6.9% to an annual interest rate of 15.4% and then increased by 50%. Based on this, it was determined that the overdue interest rate was 23.10% per annum, more than three times the normal loan interest rate, and claimed that the borrower's liability for default was calculated from the date the loan was issued. The above interest rate adjustment clause was not bolded. Whether in terms of prominence, or in terms of overall consistency with loan interest rate clauses and overdue interest rate clauses, it did not meet the legal standards sufficient to attract consumers' attention. Therefore, the court upheld a bank's claim that the principal amount of the loan, interest at an annual interest rate of 6.9%, penalty interest at an annual interest rate of 10.35%, compound interest, and lawyers' fees were lost in accordance with the contract, and that the mortgaged property enjoy priority compensation rights. However, there is no support for a bank's request to adjust interest rate terms based on the contract, claiming that interest is calculated four times the one-year LPR on the loan issuance date, and that the loss of penalty interest, compound interest, and corresponding partial legal fees calculated on this basis is increased by 50%, that is, an annual interest rate of 23.10%. After the first instance verdict was handed down, neither party appealed.
[Typical Significance]
In recent years, with the widespread development of financial lending services, some banks charge high default interest rates by setting multi-tier interest rate clauses. Financial consumers often ignore contract details and only discover that the actual loan cost is far higher than expected until after the loan is issued. In this case, the loan interest rate adjustment clause agreed upon by the two parties is a formal clause with a major interest relationship with the borrower, and has the characteristics of being non-consensual and unconventional. The court applied the relevant provisions of the Civil Code relating to the mandatory rules of formal clauses and the obligation to prompt and explain. According to law, if the lender has failed to fulfill the obligation to prompt and explain, it is not authorized to calculate overdue interest rates in accordance with this provision. The ruling in this case reflects the value orientation of protecting financial consumers' right to fair trade and the right to information in accordance with the law and promoting the reduction of financing costs for the real economy. It is of great exemplary significance in guiding financial institutions to carefully and compliantly prepare contract texts, standardize credit business development, and create a good financing environment.
First Trial: (2023) Guangdong 0606 Minchu No. 26168
Case 2
Banks must not be exempted from the obligation of appropriateness on the grounds that they did not deceive or mislead marketing
——Su's lawsuit against a bank to entrust a financial management contract dispute
[Basic facts of the case]
On October 27, 2016, after being promoted by a bank account manager, Su signed an asset management contract online and invested 6 million yuan to purchase asset management products sold by the bank on behalf of the bank through his online bank account. The contract stated that the principal amount of the asset management product might have been lost, but the contract provided by a bank and the original materials such as the “Risk Tolerance Questionnaire” and “Risk Disclosure Statement” were not confirmed by Su's electronic signature, and it is impossible to conclude that the bank fully revealed the risk to Su and made a risk match. The supervisory authority's investigation opinion also pointed out that the bank had problems such as incomplete marketing materials and unclear product descriptions in product sales. On September 27, 2018, the asset manager of this product issued an announcement stating that since the net reference share value of the asset management plan hit the stop loss line, the plan was terminated early in accordance with the contract agreement and the settlement procedure was entered as agreed. Su received liquidation allocations one after another, but the principal investment was lost. So Su filed a lawsuit and sued a bank to pay compensation for investment losses.
[Judgment details]
The court of first instance found that a bank, as the seller's agency, had failed to fulfill its obligation of propriety, and ordered a bank to pay compensation of 66,2671.57 yuan to Su, and the parties concerned filed an appeal. The Zhengzhou Intermediate People's Court of Henan Province found in the second instance that in the field of promoting and selling high-risk financial products and providing high-risk financial services, the fulfillment of the obligation of appropriateness is the main element of “seller due diligence,” and is also a prerequisite and foundation for “the buyer's own responsibility.” Su's investment losses actually existed. In the process of selling the asset management products involved in the case, a bank failed to reveal key information such as product risk, product characteristics, investment direction, and open redemption arrangements to Su in an appropriate manner, nor did it explain how the product risk matched Su's risk tolerance. Although a bank did not deceive marketing to induce the purchase of high-risk products, it cannot be inferred that it has fulfilled its obligation of appropriateness, so the judgment rejected the appeal and upheld the first instance judgment.
[Typical Significance]
Seller institutions assume the obligation of appropriateness. The purpose is to ensure that financial consumers make independent investment decisions on the premise that they fully understand the nature and risks of relevant financial products and investment activities, and bear the corresponding benefits and risks. Financial institutions that sell high-risk financial products have a higher obligation of appropriateness than ordinary civil transactions. They cannot claim that they have fulfilled their obligation of appropriateness on the grounds that there are no deceptive or misleading marketing practices; they should examine and judge whether they have carried out “seller due diligence” based on the specificity of the financial product. In this case, it was determined that the bank had failed to effectively fulfill its obligation of propriety and ordered it to bear corresponding liability, demonstrating the important function of the administration of justice to effectively protect the legitimate rights and interests of financial consumers and regulate the order of the financial market.
Second trial: (2025) Yu01 Minzhang No. 14673
Case 3
Securities institutions should achieve “seller responsibility” when selling private equity products
——Yang XX sued a securities sales department, a third party, Chen, and an investment management center in a financial entrustment contract dispute
[Basic facts of the case]
In June 2015, Chen, the head of a securities sales department, peddled a private equity fund to various investors and promoted that the fund was a project operated by a securities company. Without investigating and evaluating investors' risk perception, risk appetite, and risk tolerance, he conducted several roadshows on the project. Mr. Yang is a VIP securities customer of a securities sales department. Based on his trust in this securities company, he signed an “Asset Management Contract” to purchase a share of 1 million yuan in this private equity fund. After the contract period expired and the investment project met the exit conditions, Mr. Yang failed to receive a refund. When he asked Chen for payment, he discovered that his investment was not a product authorized by a securities sales department, and that the product was extremely risky, so he complained to the Securities Regulatory Bureau. In March 2022, the Securities Regulatory Bureau issued a warning letter to the sales department and Chen, believing that there were the following problems: 1. Unauthorized sale of private equity products not sold by securities companies; 2. The sales department's blank contract text management was inadequate. In August 2023, Mr. Yang filed a lawsuit and sued the sales department to pay compensation of 1 million yuan for investment funds and interest losses of more than 300,000 yuan. The sales department believes that the contract counterparty for this private equity fund product is an investment management center, and the warning decision made by the Securities Regulatory Bureau is an internal industry reminder. Being warned is not equivalent to having to bear the commercial risk of an investor's investment failure, and that Mr. Yang manages his wealth all year round and is aware of investment risks, so the sales department should not bear Yang's investment losses. During the lawsuit, the private equity fund manager believed that the investment purpose of the asset management plan could not be achieved, decided to enter into a loss settlement procedure, and made a liquidation distribution plan. According to the liquidation distribution plan, Mr. Yang sued a securities sales department for damages.
[Judgment details]
The court of first instance ruled to dismiss Yang's lawsuit. Mr. Yang filed an appeal. The Ma'anshan Intermediate People's Court of Anhui Province found in the second instance that a securities sales department failed to prove that it had assessed Yang's risk perception, risk appetite, and risk tolerance, and failed to risk grade the product and complete the suitability of the product with the customer, in violation of investors' appropriateness obligations. However, as an investor with some financial management experience, Mr. Yang was unable to read the terms of the contract carefully and fully understand the product information. In other words, he invested in high-risk products that were higher than he could bear, and he also had some mistakes himself. As a result, the first instance verdict was annulled, and a securities sales department was commuted to indemnify Yang for losses of 57,6716.97 yuan.
[Typical Significance]
“Seller due diligence” is an inevitable requirement for compliance with due diligence obligations, and is an important institutional arrangement to protect the rights and interests of financial consumers. This case makes it clear that financial institutions and their employees must not use the reputation of financial institutions to privately sell unauthorized products, and must strictly implement appropriate obligations such as investor risk assessment, product risk rating matching, and information disclosure. Otherwise, they should be liable according to the degree of fault in accordance with the law; financial consumers should also pay attention to investment risks and purchase financial products that match their ability to invest. The ruling in this case not only encouraged financial institutions to strictly regulate sales practices, curb the occurrence of situations such as exaggerating profits and concealing risks at the source, but also guided financial consumers to take the initiative to raise awareness of risk prevention, which is of positive significance in regulating the sales behavior of private equity fund products and ensuring the high-quality development of the financial market.
Second trial: (2024) Anhui 05 Minzhong No. 1088
Case 4
Relying on the technical advantages of the app, the fund company's act of forcibly changing the dispute resolution method after subscribing to the product has no legal effect
——Fang's lawsuit against a fund company in a property damage compensation dispute
[Basic facts of the case]
In December 2015, 74-year-old Fang subscribed to a 1 million yuan fund product through an offline promotion by a fund company salesman. Since then, the product lost money. By the time it was redeemed through the fund company's app in December 2024, the cumulative loss was about 380,000 yuan. Mr. Fang believes that the fund company misled the investment with false promises of “low risk and high return” and should be liable for compensation, so he sued it in court in September 2025.
Before the first court session, a fund company filed a supervisory objection, arguing that the case should not be tried by the court, but should be handled by an arbitration institution. It also claimed that as a result, the competent objections in similar cases were not supported by the court, so the app system was upgraded and the dispute resolution clause was adjusted. Mr. Fang logged on to the upgraded app in October 2025 and checked a series of service agreements containing arbitration clauses online. The arbitration clause clearly traced back to the past, and reminded in bold. Based on this, the two parties have reached a valid arbitration agreement, and the case should be referred to an arbitration committee for arbitration.
Mr. Fang said that no dispute resolution method was agreed upon when purchasing fund products. The fund company abolished its offline office around 2018, so the app became its main channel for checking product information and processing subscriptions and redemptions. It logged in to the app in preparation for the trial of this case. At the time, the app had already been upgraded. Even if it checked a series of service agreements, it was a passive operation to complete the login, and it was not possible to determine that it agreed to be bound by the arbitration clause based on this.
[Judgment details]
The People's Court of Hongkou District of Shanghai held in the first instance that the competent arbitration authority for disputes should presuppose the existence of a valid arbitration agreement between the parties. A fund company provides users with a series of service agreements through an app. Although it prompts users to read the content of the agreement in a pop-up window and displays the arbitration clause in bold, the page only sets the two options of “agree and sign” and “disagree and withdraw”. If users do not agree to the contents of the agreement, they cannot continue to use the app. Even if Fang only views the product information of the fund involved in the case, he must click the “Agree and Sign” series of service agreements on the app before he can log in to view it. This signature method is mandatory and violates the principle of voluntary arbitration. Therefore, the available evidence does not prove that Party has the true intention to resolve the dispute in this case through arbitration. The arbitration agreement is not binding on the other party, and the dispute in this case should be resolved through litigation. Therefore, it was decided that a fund company's supervisory objection to this case was rejected. A fund company disagreed with the ruling of the first instance and filed an appeal. The Shanghai Financial Court upheld the original ruling in the second instance.
[Typical Significance]
According to the relevant provisions of Article 4 of the Arbitration Law of the People's Republic of China, when the parties choose arbitration to resolve disputes, they shall follow the principle of voluntarism and reach an arbitration agreement; the arbitration agreement shall include an expression of intent to request arbitration, arbitration matters, and an arbitration institution selected. Therefore, the effective establishment of an arbitration agreement not only requires a corresponding external form, but also requires that the parties have a true agreement to request arbitration as the core element. A fund company sets acceptance of arbitration clauses as a precondition for investors to access existing product information. This contract model violates the principle of voluntary arbitration, and the resulting arbitration agreement is not legally binding on investors. This case is of great exemplary significance for regulating financial institutions to use technological advantages to force changes in dispute resolution methods and guarantee the right of financial consumers and investors to choose dispute resolution, and highlights the principle of fairness and the rigid protection of the legal rights of financial consumers in the digital finance era.
Second trial: (2026) Shanghai 74 Civil Administration Final No. 26
Case 5
Mediate and efficiently resolve critical illness insurance claims disputes in accordance with the law and promptly remedy the rights and interests of the parties
——Wu sued a life insurance company in a personal insurance contract dispute
[Basic facts of the case]
On September 11, 2020, Xu applied for a lifetime critical illness insurance and additional exempt critical illness insurance from a life insurance company for her daughter Wu. The basic insurance amount is 400,000 yuan, the annual premium payment is 4,840 yuan, and the payment period is 19 years, and the insurance period is lifetime. The insurance contract includes “hepatolenticular degeneration (Wilson disease)” in the scope of critical illness coverage, but a number of strict clinical diagnosis requirements are set.
In February 2024, Wu was treated at the Children's Hospital Affiliated to Zhejiang University due to abnormal liver function. He was diagnosed with “hepatolenticular degeneration (Wilson disease)” on February 4, 2024 after multiple specialist tests. The hospital issued a “diagnosis certificate” in accordance with the law. Wu then applied for a critical illness insurance claim from a life insurance company and requested an exemption from renewal premiums in accordance with the contract. A life insurance company reviewed and found that although Wu's illness fell within the category of serious illnesses listed in the contract, it did not fully meet all of the clinical components stipulated in the contract for the disease, and decided not to make a claim or exempt him from renewal premiums, so Wu filed a lawsuit.
[Mediation content]
After examination, the People's Court of Intelligent Manufacturing New Town in Quzhou, Zhejiang Province found that the insurance liability clause relating to the insurance contract involved in the case was a formal clause provided by the insurance company. The clause set strict claim requirements and did not provide sufficient instructions to explain the obligation, and that there was insufficient basis for a life insurance company to refuse compensation based on this. If the trial continues in accordance with the litigation procedure, this case will inevitably initiate an examination and objection and review of the expert opinion, and the litigation cycle will be long. Wu urgently needed to settle the claim for follow-up treatment. In order to promptly remedy the rights and interests of the parties and substantially resolve the dispute, the court gave priority to organizing mediation work between the two parties.
After the court presided over the mediation, the parties voluntarily reached a mediation agreement on May 17, 2024:1. A life insurance company paid Wu 360,000 yuan in a one-time critical illness insurance claim; 2. A life insurance company exempted Wu from 16 renewal premiums of 77,440 yuan after being diagnosed on February 4, 2024; 3. The personal insurance contract dispute between the plaintiff and defendant came to an end, and there was no further dispute between the parties. On May 25, a life insurance company fulfilled its payment obligation. The trial of the case took only 20 days.
[Typical Significance]
In judicial practice, some critical illness insurance contracts set strict and detailed professional diagnosis requirements to objectively raise the claim threshold for insurance consumers. There are many insurance claims disputes arising from this. This case accurately applied the formal clauses and rules of the Civil Code and the principles of maximum honesty and adverse interpretation of the Insurance Law, clarified the legal boundary between diagnostic criteria agreed in insurance contracts and routine clinical medical diagnosis, clearly guaranteed that insurance companies must not refuse to settle claims based on contract clauses that exceed clinical diagnosis specifications, protect the legitimate rights and interests of financial consumers in accordance with the law, and guide insurance institutions to regulate claims processing business practices. At the same time, this case is based on the actual plight of the sick party in urgent need of treatment, actively carries out litigation and mediation, effectively avoids complicated medical assessment procedures, efficiently implements insurance coverage functions, and substantially resolves contradictory disputes, and has good exemplary significance for properly handling similar personal insurance claims disputes.
First trial: (2024) Zhejiang 0891 Minchu No. 1028
Case 6
Innovate “model judgment+commissioned mediation+representative litigation” to give full play to diverse dispute resolution efforts
——Liability dispute for misrepresentation of securities of a listed company
[Basic facts of the case]
In October 2016, a listed company initiated a major asset restructuring to acquire 100% of the health company's shares from 16 counterparties including Fang XX, the original actual controller of a health company in Shenzhen, by issuing 21.7899 million shares and paying 440 million yuan in cash. The total transaction consideration was 1 billion yuan. After the acquisition was completed, a health company became a wholly-owned subsidiary of a listed company and included in the scope of a listed company's consolidated financial statements. An investigation by a securities regulatory bureau revealed that from May to December 2017, health companies signed false contracts with customers, fictitious orders in the ERP system (enterprise resource planning system), and falsified a full set of processes and business data such as procurement, production, and delivery; used personal and corporate accounts controlled by the company to provide customers with funds to pay for goods, inflated business revenue by 97.343 million yuan and inflated profit by 408.386 million yuan, respectively, accounting for 3.7% and 15.67% of the amount disclosed by a health company. Due to the inclusion of financial data of a health company in the consolidated financial statements of a listed company, its financial fraud caused false records in the “2017 Annual Report” disclosed by a listed company. In June 2023, a provincial securities regulatory bureau issued an “administrative penalty decision” to a listed company and related parties.
[Mediation content]
Since the administrative penalty was imposed in June 2023, several investors have successively filed securities misrepresentation liability disputes with the Guangzhou Intermediate People's Court of Guangdong Province, requesting that a listed company be ordered to pay compensation for investment losses. The Guangzhou Intermediate Court handed down a model judgment on the case, unifying adjudication standards and loss calculation measures to guide the parties to rationally negotiate, and entrust a securities and futures mediation organization to carry out the mediation. Guided by the model judgment, 178 investors reached a mediation agreement with a listed company and received a total compensation of about RMB 11.78 million; 119 investors voluntarily withdrew their lawsuits and settled a total of 294 cases through mediation and withdrawal, accounting for 99% of the total number of lawsuits during the same period. In the case where mediation failed, the court initiated ordinary representative litigation proceedings in accordance with the law and handed down a judgment in December 2025.
[Typical Significance]
In recent years, there has been a continuous increase in mass securities disputes arising from financial fraud involving mergers and acquisitions of listed companies. Such disputes involve a large number of people and are very difficult to resolve. People's courts collaborate with supervisory authorities to organically link administrative enforcement with civil administration of justice, and innovate the “model judgment+commissioned mediation+representative litigation” diversified dispute resolution pattern. Through model judgments, legal boundaries are clarified, parties' expectations are stabilized, and parties are guided to negotiate voluntarily and on an equal footing to quickly achieve rights and remedies through entrusting mediation, and handle disputes under the cover of lawsuits by ordinary representatives, so as to achieve integrated arbitration and hierarchical handling, and efficient substantive resolution of disputes. This case effectively links administrative penalties with civil prosecution, strengthens deterrence against financial fraud in the capital market through civil compensation, effectively reduces the cost of rights protection for small and medium-sized investors, regulates the disclosure of information on listed companies and mergers and acquisitions, improves the diversified dispute resolution system in the securities sector, and maintains capital market order.
Second trial: (2024) Guangdong Minchou 1971/1972
This article was edited by the Supreme People's Court, Zhitong Finance Editor: Chen Wenfang.