A Study On The Legal Risks Of China 's Listed Companies In The US And The Countermeasures

Since China.com confronted with class action lawsuit in the U.S., Chinese corporationslisted in the U.S. have been inundated with class action lawsuits. Class action lawsuit, maynot only cause Chinese corporation listed in the U.S to incur extraordinary legal expenses andrelated costs, but also may result in a serious fluctuation of share price with progress of thelawsuit. The worse thing is that getting involved in class-action lawsuit may damage thecorporate image and the brand influence; besides, in the long term, it has adverse impact onfurther offering and market development. Nevertheless, most class action lawsuits filed toChinese corporation are resulted from lacking of understanding of laws and regulations oflocal capital market and are not used to comply with them. In order to reduce the occurrenceof abovementioned situations, it is necessary and urgent for Chinese corporations to study therisks resulted from class action lawsuits so as to come up with correspondingcountermeasures to address the problems.This article was written based upon reflections on a series of class actions lawsuits facedby Chinese corporations listed in the U.S. This article demonstrates the necessity to studylegal risks and countermeasures concerning Chinese corporations listed in the U.S. byanalyzing several cases, as well as provides suggestions through self-criticism andinternational experience.The first part introduced the concept of the class action in the United States, the UnitedStates Securities and the evolution of the legal system and the main content, and finallysummed up the significance of the legal system of the United States Securities entire generalbriefing of the legal system of the United States Securities.The second part mainly around the legal risk of Chinese listed companies in the UnitedStates suffered a securities class action commenced. First introduced to Chinese enterpriseshave the status and the main reason for listing in the United States, and then use leads toadverse consequences to the enterprise in the Chinese listed companies in the United Statessuffered a securities class action case.These three points of the third part of China the listed enterprises face class action in theUnited States the main reason is the lack of understanding of the American legal culture andlegal regulations and attention, information disclosure is not standardized, and not toestablish a comprehensive corporate governance mechanism reason The fourth part of the article set forth in the above analysis based on Chinese listedcompanies in the United States should Securities Group litigation legal risks andcountermeasures, mainly including：1. fully understand and are familiar with and master thelaws and regulations of the U.S. capital markets and regulatory requirements;2. to takeeffective measures to ensure that timely and accurate disclosure of information;3. to improvethe company ’s internal controls and governance mechanisms;3. to establish and perfectcorporate counsel system, and actively respond to the securities class action...