Since the Supreme People’s Court released interpretations regarding civil liability arising from false statements in securities markets in 2002,1 a large number of investors have filed lawsuits against listed companies as soon as an administrative penalty decision is issued by China Securities Regulatory Commission (“CSRC“), or a criminal conviction is confirmed by the People’s Court for false statements. Under such circumstances, should the listed companies successfully utilize correct legal tactics, they do not necessarily have to bear the burden of civil compensation to the investors. In a recent case, Liu vs. CEC CoreCast Corporation Limited, the People’s Court dismissed all claims filed by the investor for compensation on the grounds of false statements against CEC CoreCast Corporation Limited.2

I.Facts

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