Core Points - The Shanghai Huaxin International Group Co., Ltd. case involves significant financial implications and numerous investors, with a trial period exceeding three years, raising industry-wide concerns regarding the responsibilities of intermediary institutions [1] - On October 28, the Shanghai Financial Court issued a first-instance judgment in the case of false statements related to Huaxin's bond issuance, holding five institutions liable for a total of 14.5% of the plaintiff's losses, amounting to over 18.56 million yuan [1][11] - The bonds in question were issued in 2017, with a total issuance amount of 2.5 billion yuan and a coupon rate of 7.5%, while the issuer, Huaxin, has already been declared bankrupt by the court [1][11] Summary by Sections Case Background - The case involves a total bond issuance exceeding 40 billion yuan from 2014 to 2017, with significant implications for similar cases in the industry [1] - The focus of the dispute includes whether Huaxin made false statements, the materiality of such statements, and the relationship between these statements and the plaintiff's investment losses [2] Evidence and Legal Proceedings - The plaintiff's legal team undertook extensive research to establish evidence of false statements, examining bond prospectuses and related transactions [3] - The complexity of Huaxin's corporate structure, with over 70 associated companies, complicates the identification of false statements [3] Court Findings - The court recognized that Huaxin failed to disclose numerous related party transactions, significantly impacting investors' assessments of the company's financial health [6] - The court set March 1, 2018, as the disclosure date, coinciding with media reports about the investigation of Huaxin's actual controller [6] Loss Assessment - A third-party expert was commissioned to assess the losses incurred by the plaintiff, distinguishing between losses due to false statements and those from other factors [7][8] - The expert opinion indicated that the total loss for investors was approximately 232 million yuan, with about 128 million yuan attributed to false statements [11] Implications for Investor Rights - The judgment opens new avenues for investor claims against intermediary institutions, marking a significant development in the protection of investor rights [12] - The case sets a precedent for future litigation involving false statements in bond issuance, particularly in the absence of regulatory investigations [12]