In-depth Analysis of the Case Where CITIC Securities Was Ordered to Pay 29.28 Million Yuan in Compensation

On December 26, 2025, the People’s Court of Futian District, Shenzhen City made a first-instance judgment on the financial management dispute case between Fuanna (002327.SZ) and CITIC Securities (600030.SH). The court ordered CITIC Securities to compensate Fuanna for principal losses of approximately 29.2863 million yuan within ten days from the date of the judgment’s entry into force [1][2]. At the same time, the funds recovered from the subsequent liquidation of the involved asset management plan will be split equally (50% to 50%) between Fuanna and CITIC Securities, but the amount paid to CITIC Securities shall not exceed its total compensation amount.

The case originated in 2021, when Fuanna spent 120 million yuan to purchase a fixed-income wealth management product named “Fu’an No.1” under CITIC Securities. However, the product experienced overdue redemption on March 19, 2022. As of September 30, 2025, the final net asset value of the product was only 77.8205 million yuan, and Fuanna still had approximately 106 million yuan in remaining principal and related expected returns unrecovered [1].

A key point of contention in this case is CITIC Securities’ dual identity. According to relevant reports, CITIC Securities is both the manager of the asset management plan and the main creditor of Peking University Founder Group, an affiliated party of the underlying assets [2]. This potential conflict of interest, coupled with concentrated investment in a single high-risk asset, has brought the loopholes in the manager’s performance of duties and underlying asset review in asset management business into the spotlight.

Legal professionals analyze that in the determination of compensation liability for relevant wealth management loss cases, major fault requires more than 70% compensation, general fault requires about 50% compensation, and minor fault requires about 20% liability. Combined with the judgment’s mention that the funds recovered from subsequent liquidation will be split 50% by both parties, it can be inferred that CITIC Securities has significant fault in the eyes of the first-instance court [2].

From the perspective of absolute amount, the compensation amount of 29.28 million yuan is relatively limited compared to CITIC Securities’ size. According to CITIC Securities’ 2025 third-quarter report data, the company’s performance was strong, with net investment banking revenue of 3.689 billion yuan in the first three quarters, a year-on-year increase of 30.88% [1]. Therefore, a single compensation expenditure of 29.28 million yuan will not have a substantial impact on the company’s overall financial condition.

It is worth noting that CITIC Securities’ asset management business has faced certain scale adjustment pressures in recent years. As of the end of 2024, CITIC Securities’ collective asset management scale, single asset management scale, and special asset management scale were 343.243 billion yuan, 908.982 billion yuan, and 290.121 billion yuan respectively [2]. Although all increased compared to the previous year, compared to 2019, the single asset management scale dropped the most, decreasing by about 356.2 billion yuan, a 5-year decline of more than 28%. This trend reflects the impact of changes in the regulatory environment and intensified market competition on the traditional asset management business model.

Although the direct financial impact is limited, the potential impact of such litigation cases on CITIC Securities’ reputation cannot be ignored. As a leading domestic securities firm, the professional image that CITIC Securities has established in the minds of institutional clients is one of the core competitiveness of the company’s investment banking business. Such wealth management dispute cases may affect institutional clients’ confidence in the company’s product design capabilities, risk control level, and customer service quality, especially the willingness of high-net-worth clients and listed company clients to cooperate in wealth management business.

The judgment result of such cases may have a demonstration effect on the industry. The court’s judgment indicates that it will not simply exempt the manager from liability on the grounds of “buyer beware”; when the manager has obvious fault, it still needs to bear corresponding compensation liability [2]. This means that regulatory agencies and judicial departments have stricter requirements for asset management product managers in terms of product design, underlying asset review, information disclosure, risk prompts, etc. CITIC Securities may need to strengthen its internal compliance review mechanism and increase the rigor of product due diligence processes, which will increase operating costs to a certain extent.

From a strategic perspective, this case may accelerate CITIC Securities’ process of optimizing its business structure. In recent years, the company has performed well in brokerage business, proprietary trading business, etc. In the first three quarters of 2025, proprietary trading business revenue reached 31.603 billion yuan, a year-on-year increase of 169.40% [1]. In contrast, the growth momentum of asset management business is slightly insufficient. This case may prompt the company to re-evaluate the strategic positioning of asset management business and seek a better balance between product innovation and risk control.

From the perspective of industry competition, this case has limited direct impact on CITIC Securities’ investment banking business, but may have subtle impacts in segmented areas. In traditional investment banking business areas such as IPO, refinancing, and mergers and acquisitions, CITIC Securities still maintains a leading position. However, in business areas such as wealth management and asset management product sales, this case may prompt some institutional clients to re-evaluate their cooperation choices, providing competitive opportunities for other leading securities firms.

According to the announcement, Fuanna seems unsatisfied with the first-instance judgment result, and the possibility of continuing to appeal cannot be ruled out [2]. If Fuanna files an appeal, the case will enter the second-instance procedure, and the final judgment result may be variable. This uncertainty will affect the market’s assessment of CITIC Securities’ litigation risk to a certain extent.

It is worth noting that the court has clearly ruled that CITIC Securities and China Merchants Bank Guangzhou Branch should cooperate with Fuanna to fully withdraw the unpaid Western Trust investment proceeds totaling approximately 35.8371 million yuan [1][2]. Previously, Fuanna had successfully withdrawn approximately 5.5902 million yuan from this account. Based on comprehensive calculation, Fuanna can recover 70.714 million yuan, accounting for 66.71% of the 106 million yuan principal. The subsequent liquidation recovery situation will directly affect the actual loss amount of the case.

Looking forward, CITIC Securities needs to learn lessons from this case and strengthen the construction of the compliance system for asset management business. Specifically, it includes: improving the due diligence process of underlying assets, strengthening the timeliness and accuracy of information disclosure, establishing an effective conflict of interest isolation mechanism, optimizing product risk rating and investor suitability management, etc. These measures not only help prevent similar litigation risks, but also are necessary guarantees for the company’s long-term healthy development.

Overall, the case where CITIC Securities was ordered to pay 29.28 million yuan in compensation has relatively limited direct impact on the company, mainly reflected in the short-term reputation and potential compliance rectification costs. From the performance in the first three quarters of 2025, the company’s various businesses still maintain a steady growth trend, and the outstanding performance of investment banking business with a year-on-year increase of 30.88% indicates that the core business competitiveness has not been substantially damaged [1].

However, the far-reaching impact of this case on the industry is worthy of attention. The court’s judgment position indicates that the regulatory authorities have stricter requirements for the performance of duties by asset management product managers, which may promote the entire industry to improve compliance standards and risk management levels. For CITIC Securities, how to seek a better balance between business development and risk control will be a key strategic issue to focus on in the coming period.

[1] Guancha.cn - “Wealth Management Product ‘Blasted’, Home Textile Leader Fuanna Failed to Recover Over 100 Million Yuan, CITIC Securities Ordered to Pay 29.29 Million Yuan” (https://news.qq.com/rain/a/20251226A046U400)

[2] Sina Finance - “Fuanna Won First Instance in 100 Million Yuan Wealth Management Overdue Case, Is CITIC Securities Still the ‘Creditor’ of Asset Affiliated Party?” (https://finance.sina.com.cn/stock/s/2025-12-28/doc-inheizzq5705247.shtml)