CSRC: Since 2024, a total of 159 cases of financial fraud have been investigated and handled

Source: Economic Information Daily Reporter Wu Lihua

On January 5th, the China Securities Regulatory Commission (CSRC) held a cross-departmental meeting to promote the comprehensive punishment and prevention system for financial fraud in the capital market. Wu Qing, Secretary of the CSRC Party Committee and Chairman, presided over the meeting and delivered a speech. Representatives from the Supreme People’s Court, Supreme People’s Procuratorate, National Development and Reform Commission, Ministry of Public Security, Ministry of Justice, Ministry of Finance, People’s Bank of China, State-owned Assets Supervision and Administration Commission, State Taxation Administration, State Administration for Market Regulation, China Banking and Insurance Regulatory Commission, and other departments attended and spoke, jointly discussing how to further strengthen the key work of comprehensive punishment and prevention of financial fraud.

Since July 5, 2024, when the General Office of the State Council forwarded the “Opinions on Further Improving the Comprehensive Punishment and Prevention of Financial Fraud in the Capital Market” (hereinafter referred to as the “Comprehensive Punishment and Prevention Opinions”) from the CSRC and other departments, all sectors have strengthened legal supply, increased efforts to investigate and punish financial fraud, jointly cracked down on third-party collusion in fraud, and reinforced the responsibilities of intermediary agencies as “gatekeepers.” An all-round, multi-layered accountability system integrating administrative enforcement, criminal sanctions, civil compensation, and integrity constraints has been continuously deepened, and a normalized, long-term punishment and prevention mechanism has been further improved.

According to reports, since 2024, the CSRC has investigated 159 cases of financial fraud, imposed administrative penalties in 111 cases, with fines and confiscations totaling 8.1 billion yuan. Working with relevant departments, the focus has been on punishing the main culprits and their accomplices, with serious accountability pursued against major shareholders and actual controllers in 43 cases. Third-party collaborators involved in fraud have been strictly punished as criminal co-conspirators through administrative violations. The system of multi-dimensional accountability has been strengthened, with 112 suspected criminal clues related to financial fraud transferred to public security authorities, and support provided for investors harmed in cases involving Jintongling, Meishang Ecology, Jinzhou Port, and others to file special representative lawsuits. Responsibilities of intermediary agencies have been reinforced. Eighteen companies involved in serious fraud have been effectively delisted due to major violations, and investigations have been launched into 91 delisted companies to prevent “one-time delisting.” Through joint efforts, the comprehensive punishment and prevention system for financial fraud in listed companies has gradually been implemented, regulatory cooperation has been continuously enhanced, and the market environment has significantly improved.

Departments have conducted in-depth discussions on the implementation of the “Comprehensive Punishment and Prevention Opinions” and the next key tasks. The meeting emphasized that the construction of the comprehensive punishment and prevention system for financial fraud in the capital market has entered a critical stage of deepening implementation. It is necessary to adhere to problem-oriented and systematic thinking to effectively implement the “combination punch” of punishment and prevention. Efforts should continue to improve institutional safeguards and promote the introduction of relevant laws and regulations. The coordination among administrative, criminal, and civil enforcement should be further strengthened, with deeper integration of major case handling and improvements to civil accountability support mechanisms, forming a unified approach to combating financial fraud and third-party collusion. Corporate governance constraints should be reinforced, with a new round of corporate governance special actions organized, and the construction of a comprehensive, normalized, and long-term prevention mechanism should be strengthened.

The meeting pointed out that the Party Central Committee and the State Council attach great importance to the stable and healthy development of the capital market. It is essential to fully recognize the profit-driven and long-term complexity behind financial fraud, further strengthen confidence, enhance regulatory cooperation, and continue to shoulder the political responsibility of cracking down on and preventing financial fraud in the capital market. The CSRC will continue to proactively work with various departments, adopting more practical measures to improve the efficiency and effectiveness of the comprehensive punishment and prevention system, continuously enhance the quality and investment value of listed companies, effectively protect investors’ legitimate rights and interests, and fully support the high-quality development of the capital market, contributing to China’s modernization.