"From theThe giant network, Focus Media American group litigation case"

The giant network, Focus Media because the net swims the data listed "prospectus", and after the announcement of third quarter earnings data are different, so it becomes the American lawyers launched the latest group litigation of securities fraud, this case has aroused widespread concern, the domestic media and investors actually, China enterprises encounter group action is not the first time in America after the listing, the past, NetEase, china.com, Chinese life also have had a similar experience, listing Corporation in the USA encounter group litigation is a sparse ordinary things.

The giant network in the "prospectus" in relevant data and notice how no legal flaws, even the existence of the issuance of securities fraud, this should be American court to recognize; at the same time, the giant network two data quarterly in the third quarter on the decline, is not within the normal operating range of allowable values, is a false statements, these must wait until that American court to make a decision.

Group litigation system originated in Britain in thirteenth Century 12, equitable. In American, 1848 was recognized in the legislation of New York civil procedure, with the twentieth Century 60's USA emerged a number of typical group litigation, the Federal Supreme Court in 1966 USA modified the "federal rules of civil procedure" twenty-third, the group litigation system is perfect, 70 years, group litigation America numbers soared, mainly focus on the protection of rights and interests of consumers, product liability, antitrust, environmental protection, catastrophe claims, the protection of human rights, and oppose racial discrimination and the recovery is infringing upon the citizen's right to litigation, and in 1995 the "Private Securities Litigation Reform Act of 1998", "Securities Litigation uniform Standards Act", America on group litigation system and the some adjustment. At present the group litigation system is adopted by many countries.

Group lawsuit system allows one or more people, for their own and others that have similar suffer impaired people to sue and be sued, is an efficient and economic method to the court and the parties. The rationality of group litigation, which solves the modern civil disputes in the presence of "the majority of small" "perishable rights" relief, civil liability of the "Securities Law" in the administrative supervision departments can not bear, with natural judgment expansion and accessible to the medium and small investors makes it with a certain public welfare, and solves the problem of "public law", social instability problem, problem group claims. But critics believe, group litigation are procedures complicated, costly, time-consuming long, difficult management, influence surface is big, big social cost, excessive intervention of public policy and management.

And Chinese common litigation system, is a separate action, the one party or both parties consist of two or more persons, litigation is common or object of action is of the same species, said the court shall be consolidated, or can be tried in combination with the consent of the parties, and in the form of a court of. In the joint action, a litigation representative, that is a party the number reached more than 10 people, may elect a litigation representative 2 - 5. When the number is determined, by the joint action of its members recommended by the litigation representative, and authorized to implement action; when the number of uncertain, registered by the court or by the court and the rights of people elected agreed to produce the litigation representative, and is representative of representative litigation, the court of prosecution after the announcement, can, right to notice to court registration within a certain period of time.

However, there are considerable differences between the system of joint action and group litigation system. The different performance of the two biggest in: first, the group litigation rights as long as people do not express out of the group as at, including not to participate in the litigation rights of the representative litigation representative, his delegation to take implied recognition mode, and the common litigation rights only to participate in the proceedings or the registration rights, the litigation representative represent only to participate in the proceedings or the registration rights, its authorized to take explicit confirmation or majority negotiation. Secondly, the group litigation decision with the expansion of power, in addition to the express from the group, its effectiveness and to all the victims suffer the same infringement, and the common court only to registered the victim, rights are not registered in the period of limitation of action is not applicable in the verdict. Thirdly, group action in chief prosecutor, other group members do not have to personally participate in litigation proceedings, evidence in court and, once the amount of compensation is determined, all members are proportional share of claims, and each member of joint action must be directly participate in the proceedings, and is responsible for the litigation process. Fourth, group litigation lawyer with the chief prosecutor to deal with, so it will not bring any social problems, but one can solve social problems many investors claim, joint action requires many lawyers were more organizational work, job description, it will lead to social problems. In this way, makes the joint action in the subject of litigation, litigation, scope of compensation deterrence and flexibility in litigation are far below the group litigation.

The distance between the joint action and group litigation, the joint action under the group action on the protection of investors, from China capital market, the power law enforcement efforts to strengthen significantly in recent years has, even a little solo dart, and the progress of private interest litigation has been limited, also need to increase the promotion of market specification, protect the rights and interests of investors and enhance the confidence of investors on the strength of. Due to the differences of legal knowledge, policy considerations and judicial practice restrictions, the recent years China's restrictions on private interest litigation has increased, showing not into the anti back, specific performance: the group litigation, limitation does not accept common litigation and representative litigation, litigation period is long the judicial interpretation of the revised, slow. Public enforcement and private interest litigation should be two important aspects of the relief and protection of the rights and interests of investors in the capital market, should not neglect it, but should promote each other, the development of both.

Although we introduce American group litigation system is worthy of discussion, that between theory, practice and judicial departments, the legislative, administrative supervision departments and there are considerable differences, however, the system in the norm USA listing Corporation corporate governance and the protection of the rights and interests of investors, does have merit, this is an indisputable fact that.

Attached: "the stock market" vulture "at China listing Corporation opened beauty firm csgrr mysterious veil"

Huang Qingyan He Yong daily economic news [2007-11-30]

Coughlin American lawyers collective action giant, focusStoiaGelerRudman&Robbins (hereinafter referred to as the csgrr), what is the system of norms under the "stock market woodpecker", malicious litigation benefit mechanism or hidden evil? After this newspaper reported yesterday, the law firm aroused the reader's attention and debate.
    It is reported, this is a home in the United States ranked around 200 law firms, in the past few years, their expertise is check listing Corporation violates records of securities law, then through collective action profit, a American peer called "stock market". Yesterday, our reporter found in the follow-up, the collective action of professional firms, in USA counterparts in mind, the evaluation does not seem to be very high.

    Csgrr law firm to stir up trouble?
In a series of the csgrr announcement, the reporter noted that, in October 30th, the NASDAQ listed Nanjing Electric Co. Ltd. (hereinafter referred to as the "solar power photovoltaic") mentioned collective action, and recently due to not finding chief prosecutor in pending. Interesting is, before September, China Sunergy because "registration statement and prospectus of IPO content in the substantive errors and misleading views, fraud and misrepresentation" was called LawOfficesofEricJ.O 'Bell, LLC and KahnGauthierSwick, LLC two American local firms of collective action, the industry personage points out, because the financial problems plagued beauty law firm "encirclement and suppression" things It is often seen.
    "A listed company they bought dozens of stocks, if they can set ten such shareholders can sue you. Buy 20 shares means that the prosecution of qualifications, as long as the stock market boom or slump, can tell you not to disclose the information, or find other faults." According to informed sources, USA such law firms are usually counterparts "fastidiously".

According to the normal way of collective action, is injured investors commissioned lawyer to do, but in the actual operation is the opposite. Law firm to find a listing Corporation, and then he looking for investors, and then issued a circular to call the damaged investors, then the network registration or phone registration. Registration of the investors once reached compensation agreements, or an appeal in the court, everyone can get compensation according to the extent of damage. Reporters in the USA part lawyer website to know, basically each of the listing Corporation have a list, as long as a certain place"Seam drill", it may cause an immediate attention and initiate litigation law firm.

In the eyes of American peer csgrr -- "the stock market"

"I don't have much understanding of the law firm, we have 600 lawyers, law firms in the United States ranked 100th, they should be about 200." Yesterday, said a American lawyer when accepting a reporter to interview.
    According to public information on csgrr, the biggest business comes from the securities class action, "this has become their main way of life, in the peer in what we call 'the stock market the vultures', all listing Corporation in their list, one finds any errors, it will immediately summoned investors to initiate proceedings."
    The lawyer said, according to the normal way of collective action, is injured investors commissioned lawyer to do, but in the actual operation of csgrr is on the contrary, they first find a listing Corporation, and then he looking for investors, and then issued a circular to call the aggrieved investors, then the network registration or phone registration. "They may be in the premises without any fees, mortgage property, launch collective action, and then get high returns, but there are also some examples of failure." For this method of operation, the lawyer thought and mainstream means not USA lawyers, it is some place not on the table, not too bright image.
Like a raging fire chief who called CsgrrThe giant denied the silence
    As of yesterday, the giant network of American law firm CoughlinStoiaGelerRudmanAll charges &Robbins strongly opposed, Focus Media would not comment. CSGRR is like a raging fire into a duly called main prosecution stage.
    In accepting the "daily economic news" interview, almost all experts agree that the odds are not American, investors, and accused of enterprises to avoid more unnecessary negative impact, both the prosecution of 70% is likely to end reconciliation. According to informed sources, in American listed Chinese enterprises, 20% had received litigation, possibility just listed companies indicted more.

    In the giant must prove its act in good faith and without fraud
    USA Allan LLP litigation business department in charge of RobertS.Beaii is introduced, at present, in the information disclosure in the liability principle of misrepresentation, American regardless of the legislation or judicial practice are presumed fault liability principle, namely information providers such as can not prove that their behavior does not have fault, not fraud, is presumed fault, should bear civil liability to investors,USA"Securities Act" in 1934 eighteenth made such regulations.
    In American Barchris a case, a director to do not understand the situation on the ground in the prospectus defense, the court presumed not to be dismissed, it also used the principle of presumption of fault. Therefore, the giant network if you want to win, we must prove that their behavior is good, there is no fraud.
    In giant network statement, the repeated, giant network has clear disclosure of relevant numbers in the prospectus, which has disclosed ACU, PCU 9 as of the end of the figures in the prospectus in first and eighty-fifth pages, ninety-fourth pages of disclosure of the number curve. The first page in the prospectus, the reporter saw the giant network has this description"Comparison of the 06 quarter and 07 in the three quarter. Peak online06 in the first quarter at the same time the number of online users and the general time and number of online users were 120037 and 51202, rush hour 07 in the third quarter at the same time the number of online users and the general time and number of online users are respectively 888146 and 481054 ", and later the third quarter earnings released online game player number completely consistent, eighty-fifth page display data with the same.

But reporters saw in the prospectus in ninety-fourth related curve, number, ACU, PCU in 07 years in the two quarter of May both reached the highest value in June, but then declined, in the subsequent 7, 8, 9 three months, although the rebound, but the growth rate obviously no two quarter. That is to say the book number curve was evident in the giant network of three quarter ACU, PCU decline than the second quarter.
    That USA csgrr law firm, the giant network in violation of the provisions America "Securities Act of 1933" Eleventh and twelfth. The reporter understands, the two are related to "civil liability caused by the false registration manual" and "civil liability" prospectus and communication related provisions.
    In addition, a publisher in disclosure stage because of the damage caused by the violation of the relevant obligations and responsibilities, "Securities Act" in 1934 eighteenth has made the stipulation, the strip (a) paragraph, the provisions of this article selected for by any"The Securities Exchange Act of 1934" the declaration behavior, therefore, it is suitable for "the Securities Exchange Act of 1934" registration statements, annual reports and other regular reports and interim reports. The "Exchange Act" stipulates, anyone in the sale of securities, because trust the file or report on the major facts wrong or misleading statements and cause damage, may file lawsuits.
    "The relevant data of giant network prospectus notice whether there was a flaw, it depends on how to identify the USA court; at the same time, the giant network three quarter of the two data is not allowed in the normal operating range, is a false statement, which is also to make decisions according to the court identification of." The China law commercial law research will be the deputy director of Shanghai Lawyers Association, securities and futures legal research committee Yixin lawyer said the song.

    A similar procedure is time-consumingReconciliation or way out
    "Similar collective action takes 3, 4 years, in order to avoid the continuous price cause more energy consumption and long legal process down, general listing Corporation to end reconciliation." According to America senior lawyers William introduction, general class action lawsuit needs every year to spend 8000000 - 10000000 dollars in legal fees, and long time action will bring many adverse effects to the listing Corporation's reputation, therefore, more than 80% of the company will choose private reconciliation, but and solutions also need to pay a high price, usually in the hundreds of millions of about us.

"In some cases the listing Corporation itself and not much wrong, if you really want to come into court, involved too much energy. Compensation is not much, choose the lesser of two weevils, sometimes make mistakes on the court should be able to win. But this process is too long, involved too much energy, rather than lost money. But in most cases, more examples or listing Corporation has fault, the listing Corporation information disclosure does have a fault, the end is also settled out of court."
    It is reported, the collective action must be to American court to do the registration, listing Corporation with the law firm a settlement agreement, the agreement must through the investor, then the judge accepted. Lawyers collective action in the "win to collect fees" to improve the small and medium-sized investors rights consciousness, let everyone in a reasonable way to supervise the listing Corporation, in addition, one win all the victims were equal compensation. It is understood, in order to play along with the lawsuit, some USA lawyer even mortgage their property, and high return around 32% also make law firm like a flock of ducks on collective action.

News extension

Overseas listing The climate does not suit oneLegal adviser have knowledge
    In August this year, Alibaba group appointed Shi Yide (TimothyA.Steinert) served as general counsel group. Prior to this, Shi Yide served in the lawThe firm as a senior partner), has 17 years of experience in legal affairs. From 1999 to become the Hongkong lawyers partner, is mainly responsible for the legal affairs China enterprises listed overseas and cross-border mergers and acquisitions. Reporter in the interview to understand, in order to cope with the problems encountered in The climate does not suit one. overseas listing, high paying dug senior legal adviser to the new proposition facing Chinese listed enterprises.
    The personage inside course of study points out, in order to ensure the American listed are not detectedPILeakage, the Ministry of justice within the enterprise must be able to adapt to the USA audit system, secondly, should be good at using financial PR, is doing a good job on the relationship between the firm and investors. For China Company, USA law particularly strict, let not the point of fault and error, plus the language, culture and industry itself to understand the problem, China enterprise fault rate is quite high.

Hangxiao lawsuit was a "halt"From the United States collective action voice again
    In the "Chiese Teams" to the early stock financing American, china.com, NetEase became the first two encounters the shareholder group litigation China enterprises. In fact, the domestic have experts and scholars called China whether the reference American collective action.
    From the legislation, our country does not have the group litigation system, not only with the similar number representative lawsuit system or the system of joint action. However, regulations of our country about "joint action" or "representative action" and the "USA group action system" has the very big difference, and is too simple and there are many restrictions. Director, manager of the Shenzhen stock exchange, the legal department of international financial law, Qiu Yonghong in NetEase encountered collective litigation once wrote that Chinese international economic law, China"The representative litigation" and a large number of complex litigation technical problems, such as the selection of representative litigation, appeals, notices etc.. Therefore, he thinks, our country current reference is necessary American group lawsuit system, for the full protection of the legitimate rights and interests of investors, establish and perfect the securities fraud civil litigation mechanism.
    While the hang Xiao steel procedure after the suspension, more strongly the call.
    In February this year the hang Xiao steel(600477) events, Chinese lawyer tried to launch similar in a class action lawsuit. In May 17th, Shanghai Song Yixin Xinwangwenda lawyer, lawyer Zhang Yu, Beijing Great Tao plovers lawyer law firm and Hebei Gongcheng law firm Xue Hongzeng Lawyers Association, to the rights and interests of Hang Xiao steel stock investors joint collection agency. Nearly 100 Hangxiao investors were collected to. These people are the basic retail, Dacheng Law firm registered in Beijing the biggest losses more than 700000 yuan; lawyers will represent the damaged investors timely filed a civil compensation lawsuit to hang Xiao steel.
    But last week, in addition to Hebei Gongcheng law firm Xue Hongzeng lawyers Hangxiao steel case has not received any notice of the court, Zhejiang Yufeng Law Firm lawyer Li Jian case, Chen Rong Shanghai Tianming law firm lawyers acting case has been court "stop".
    "Chinese joint action system does and America collective action system is the gap, the distance is not enough to protect investors." Song Yixin lawyers said yesterday in an interview, "although we totally into USA collective litigation system is debatable, but this system in the regulation of listing Corporation management and protect the interests of investors is indeed worthy of our study."