With a spate of lawsuits looming, Everbright Securities' prospects look anything but bright.

An investor in Shanghai has filed a 100,000 yuan ($16,330) claim against the beleaguered stock brokerage. The investor's lawyer, Yan Yiming, said the amount may be small, but the case is groundbreaking because it has the potential to heighten the investors' sense of justice.

Also, an investor in Guangzhou has filed a 70,000 yuan claim. The lawyer representing the investor, Ye Xiaolei, was quoted by a local newspaper as saying that the lawsuit was prompted by losses caused by Everbright Securities' inadequate trading system and its executives' false statements following a trading error.

Separately, a group of 30 investors from East China's Fujian province are also mulling a class action. The highest claim made by a single investor in the group amounts to 300,000 yuan.

Stock market observers said they expect the lawsuits to set off an avalanche of litigation cases that could take years to unwind.

Everbright Securities is facing claims estimated at 2.7 billion yuan by investors alleged to have been misled by the company's deliberate withholding of information about its 7.2 billion yuan trading error.

"Investors have sensed blood and they all want their bite," said Yan Yiming, founder of Yan Yinming Law Firm, which has a reputation among lawyers for the defense of investors' rights.

According to a writ filed on behalf of a 60-year-old retired worker in Shanghai, the plaintiff bought an unspecified amount of stocks because he alleged that he was misled by Everbright Securities' denial of a mistaken order placed on 11:05 am on Aug 16. The stock brokerage did not issue a statement of clarification until 2:45 pm.

"Anyone who invested in stocks or stock index futures during that time frame can claim indemnity," Yan said.

The Jing'an District People's Court of Shanghai Municipality, which is in charge of the district where the stock brokerage is registered, has accepted the writ. When the court holds a hearing, it will be the first time that an individual investor sues a brokerage in China.

Lawyers said that Everbright Securities has seen its reputation as a major State-owned company seriously tarnished after the China Securities Regulatory Commission specifically noted in its insider-trading finding against the company on Friday that investors could seek redress in court. The company is now an easy target for almost everyone, lawyers said.

"The court is sure to further study the case. It is still unknown whether it will accept and hear the case any time soon. But it is highly suggested that the court accepts the case to restore a sense of social justice," said Yan.

The Securities Law of China regulates that the principal should be responsible if insider trading causes any losses. However, the law lacks a detailed interpretation and regulations.

But Yan said the lack of detailed interpretation will not pose any obstacle for the court to hear the case.

"It can be seen from this case, as well as from other cases attacking monopolies, that the central government attaches great importance to social justice and the efficacy of the judicial system," he said.

In terms of compensation, Everbright Securities will have to shoulder its responsibilities. And Yan added that the China Securities Regulatory Commission should urge the company to set up a fund to compensate investors who have suffered losses as a result of the "fat finger" incident.

Everbright Securities' share price dropped 0.54 percent on Tuesday, adding to recent losses, while the benchmark Shanghai Composite Index rose 1.18 percent to close at 2,123.11 points.

shijing@chinadaily.com.cn