CX Daily: Court Ruling Sets Off Debate About Bond Fraud Compensation
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In Depth: Court ruling sets off debate about bond fraud compensation
A court verdict triggered debate over two key issues in a fraud case involving a Chinese company’s two bond issuances — who should be allowed to sue for compensation, and how much they should be able to receive.
The verdict and accompanying debate offer a bit of clarity on how courts are interpreting a set of provisions that China’s Supreme People’s Court issued in January 2022 about trying civil lawsuits in which one party sues another for “misrepresentation” in the securities market, a crime that includes behavior such as filing false earnings reports. The provisions were drafted based on how the stock market works, and courts are still working out how to apply them to the bond market.
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