FINANCE

Analysis: Surge in China’s Securities Fraud Lawsuits Tests Courts

Published: Sep. 22, 2025 4:30 p.m. GMT+8

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Three years after China removed a key hurdle for suing listed companies, securities fraud lawsuits have risen sharply, reshaping the legal landscape for courts and businesses.

In January 2022, China’s top court issued a judicial interpretation — binding guidance to lower courts — that removed the requirement for investors to wait for regulators to impose administrative penalties or for criminal cases to conclude before filing civil claims over misleading disclosures by listed companies.

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Securities fraud lawsuits in China have risen sharply since a 2022 judicial interpretation lowered filing thresholds and expanded civil liability.
The number of misrepresentation cases at the Shanghai Financial Court increased significantly from 2022 to 2024, with case complexity also rising.
Courts use “model judgments” and representative litigation to streamline proceedings, balancing investor protection with efficiency, but legal risks for listed companies have grown.

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What Happened When

January 2022：: China’s top court issued a judicial interpretation that removed the requirement for investors to wait for regulators to impose administrative penalties or for criminal cases to conclude before filing civil claims over misleading disclosures by listed companies.

Between 2022 and 2024：: The number of newly sued listed companies at the Shanghai Financial Court rose significantly, attributed to lower thresholds for filing lawsuits.