Strategies for Public Law Enforcement in Securities Class Action Amid the Knowledge Economy Revolution

Liyuan Wang ()
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Liyuan Wang: Central University of Finance and Economics

Journal of the Knowledge Economy, 2025, vol. 16, issue 2, No 36, 6984-7015

Abstract: Abstract This study explores the dynamics between public and private enforcement mechanisms within China’s evolving securities regulatory landscape. Focusing on the landmark Kangmei Pharmaceutical case, which marked the inaugural class action lawsuit under China’s innovative Securities Class Action system, the study delves into the strengths and limitations inherent in China’s predominantly public-oriented approach. The research highlights the importance of balancing public and private enforcement, considering the strengths and weaknesses of each. It proposes a public–private coordination model that leverages public enforcement resources to guide and regulate private enforcement within a regulated framework. A market-oriented competition mechanism is suggested to facilitate collaboration and competition between the public and private sectors within Securities Class Action. Theoretical implications of this research challenge the binary perspective of securities law enforcement by advocating for a more dynamic and context-specific conceptualization. It encourages scholars to explore the intricacies of hybrid enforcement models and adapt enforcement strategies to the unique characteristics of the securities market. Managerial implications extend to legal practitioners, regulatory bodies, and corporate entities. Legal practitioners are urged to adopt an integrative approach that maximizes the strengths of both public and private systems. Regulatory bodies can benefit from streamlining enforcement procedures while maintaining a balanced approach, fostering a responsive and resilient regulatory environment. Corporate entities are advised to navigate securities litigation scenarios with a nuanced understanding of public–private collaboration to protect their interests effectively. This research contributes to the ongoing discourse on the optimal design of Securities Class Action systems, providing valuable insights for policymakers, legal practitioners, and stakeholders in China’s securities market. It underscores the importance of adaptability and collaboration in the ever-evolving landscape of global securities markets, promoting adequate investor protection and deterrence of securities violations.

Keywords: Securities law enforcement; Public–private coordination; Securities Class Action; Investor rights protection; Knowledge economy; Institutional balancing (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s13132-024-02017-5

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