Test on the law protection of minority investors in China: Perspective of misrepresentation in securities market.

Under the background of effectively building the legal system of the capital market and strengthening investor protection, an evaluation of whether China's legal system's reformations have improved investor protection is of great significance. Based on the lawsuits of 663 listed companies from 1997 to 2021, this paper finds the average annual proportion of listed companies punished by the China Securities Regulatory Commission and prosecuted by the investors is 40%, and since 2017, it has stabilized at around 70%. This paper also finds the "head effect" of the number of investors and claims in the misrepresentation cases over the years and the advantages of China Securities Investor Services Center's support in investor protection. Then, the negative binomial regression method is used to empirically find that investor protection gets better and better with the reformation of China's laws. Reformations in the legal system and key provisions have all led to an increase in the number of sued investors and claims. However, the time of legal proceedings only depends on the reform of the entire legal system. Finally, to reduce litigation costs and make all investors actually receive compensation after being infringed, we should establish the class action mechanism in the future reformation of China's legal system. [ABSTRACT FROM AUTHOR]