1999 Articles

Private Securities Litigation In China: Of Prominence And Problems

Cai, Wenhai

Effective enforcement is the bedrock of any investor protection framework. The neglect of private remedies for public investors and the difficulty in enforcing criminal sanctions, coupled with ill-fated selfregulation, give justifiable concerns that the current framework will not rise to the enforcement tasks of the future. The current paternalistic approach to investor protection represents a recipe for failure to either thwart securities frauds or create an aura of effectiveness. Before fundamental changes are instituted, it may be prudent to err on the side of conservatism in ensuring the effectiveness of the long-awaited Securities Law.