Zhong Guo Jing Ying Bao·2025-08-14 09:35Core Viewpoint - The lawsuit against 39 defendants, including Geer Software, seeks to recover 372 million yuan due to their alleged collusion in financial fraud with ZeDa YiSheng, a company that has already faced penalties for fraudulent issuance [1][3][4]. Group 1: Legal Proceedings and Financial Implications - Geer Software and 38 other defendants are being sued by three intermediary institutions for a total of 372 million yuan, which includes compensation for investor losses and penalties paid to the regulatory authority [1][3]. - The three intermediary institutions, Tianjian Accounting Firm, Dongxing Securities, and Kangda Law Firm, are pursuing claims of 127.46 million yuan, 215 million yuan, and 33 million yuan respectively [3]. - The lawsuit is part of a broader trend where third-party entities that assist in financial fraud are being held accountable, marking a shift towards comprehensive liability in capital market fraud cases [2][5]. Group 2: Regulatory Context and Market Impact - The China Securities Regulatory Commission (CSRC) has noted a new trend in financial fraud involving third-party collusion, which disrupts market order and necessitates strict enforcement [2][5]. - The CSRC has previously penalized ZeDa YiSheng for fraudulent activities, and the ongoing lawsuits aim to extend accountability to all parties involved in the fraud ecosystem [6][11]. - Experts suggest that this legal action could deter future collusion in financial fraud by increasing the costs associated with such activities, thereby promoting a more responsible market environment [7][10]. Group 3: Implications for Intermediaries and Third Parties - The lawsuit emphasizes the need for intermediaries to conduct thorough due diligence and shift from mere formal reviews to substantive risk assessments [7][8]. - Legal experts argue that third parties who knowingly assist in financial fraud pose a greater risk to the capital market than intermediaries who may act out of negligence [8][11]. - The outcome of this lawsuit could set a precedent for how third-party involvement in financial fraud is treated legally, potentially leading to stricter enforcement and accountability measures [10][11].