Summary of the Key Points
This news article provides an in-depth analysis of the latest developments in a well-known capital case that has spanned nearly a decade in the A-share market. Xu Xiang, once hailed as the "king of private equity," colluded with Xu Changjiang, the actual controller of Wenfeng Shares in 2015, to manipulate the stock price and profit from retail investors. Together, they pocketed billions of yuan through this scheme and were later convicted of manipulating the securities market. After the criminal case was concluded, thousands of retail investors who suffered losses filed civil claims. These claims are now undergoing legal proceedings, and the latest second-instance judgments have not only clarified the responsibilities of all parties for compensation but also resulted in some cases where the entire compensation was ordered to be borne by Xu Xiang personally. Xu Xiang, who was released from prison in 2021, has repeatedly attempted to re-enter the capital market, only to face setbacks. The billions in fines imposed on him and the outstanding claims from retail investors have yet to be settled.
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Detailed Explanation
1. The audacious scheme used by the two "Mr. Xu's"
Many may wonder how the two conspired to deceive retail investors. The logic was straightforward: they were simply stealing money outright. At that time, the stock price of Wenfeng Shares, which was traded on the retail market, was relatively stable. Xu Changjiang, wanting to sell his shares for cash, was afraid that a direct sale would cause the price to plummet and prevent him from getting a high price. He approached Xu Xiang, who was known for his skills in trading and his ability to drive up stock prices. The two agreed on a split of the profits: the minimum selling price was set at 14 yuan per share, and any profit above that amount would be divided equally between them. Xu Xiang then used hundreds of retail investor accounts he controlled to buy a large number of shares from Xu Changjiang and subsequently drove the stock price up through aggressive trading on the secondary market. Once the price reached a high, he sold all the shares to the retail investors who had bought in at the higher price. Xu Changjiang alone made 6.7 billion yuan from this manipulation, of which 3.4 billion yuan was illegal gains. Xu Xiang also profited significantly. By the time the two had finished their scheme, the retail investors who bought in at the high price were left with huge losses.
2. Why have the claims from thousands of retail investors taken so long to be resolved?
The reason why the compensation judgments only started in 2025, even though the incident occurred in 2015, is due to the legal rule of "criminal proceedings before civil claims." The court had to first establish the criminal charges against Xu Xiang and Xu Changjiang for market manipulation and obtain a criminal judgment to prove their involvement in illegal activities before retail investors could file claims. Therefore, it was not until 2021 that the court began to process the first batch of claims. In total, 1,017 retail investors have filed claims, amounting to a total loss of over 86 million yuan. Ironically, the amount of money Xu Xiang and Xu Changjiang have actually paid in compensation to the investors is only 109.63 yuan, which is almost negligible; the initial 430,000 yuan in compensation was paid by Wenfeng Shares itself. The two cases where the second-instance judgments changed the outcome to require Xu Xiang to bear all the compensation indicate that the court is now targeting his personal assets to cover the losses.
3. Why can't the once-revered "king of private equity" cause a stir anymore?
Xu Xiang was once considered a deity among retail investors in the A-share market, with the belief that following his advice would guarantee profits. However, after his release from prison in 2021, his attempts to re-enter the capital market and influence the governance of listed companies failed repeatedly. There are three main reasons for this: First, his success in the past relied on illegal practices, such as colluding with company executives or using insider information. A-share regulations are now so strict that even multiple purchases of the same stock can attract attention from authorities. Second, his assets have been frozen, with the judiciary seizing 21 billion yuan of his family assets and imposing a 11 billion yuan fine, leaving him with very little disposable cash. He also lost the 90 million shares he held in a listed company, which were used to pay the fine through a judicial auction, leaving him without any voting rights. Third, the A-share market has changed significantly; retail investors no longer blindly believe in the power of "big names." The era of easily manipulating prices has passed.
4. What lessons can ordinary investors learn from this decade-long case?
First, don't believe in the myth that following a "big name" in trading will guarantee profits. So-called "Xu Xiang concept stocks" or "stocks heavily held by private equity leaders" are often part of a pre-planned scheme. By the time you learn about the news and buy in, it is usually the time when the sellers are ready to profit. You may think you are benefiting from their expertise, but in reality, you are just becoming their "victim." Second, if you suffer losses due to a company's manipulation of the stock price or false information disclosure, don't accept it as fate. The collective compensation mechanisms in the A-share market are now well-established, and there are specialized legal teams that can help you file claims. You don't have to go through the legal process yourself, and you only need to pay for legal fees to recover a portion of your losses. Many eligible retail investors are able to get most of their losses back.