scatterpoker| 717 cases were investigated! fined 6.389 billion yuan! China Securities Regulatory Commission: Zero Tolerance

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The CSRC issued a summary of the law enforcement situation of the CSRC in 2023 on May 15.

Since 2023ScatterpokerUnder the guidance of Xi Jinping's thought of socialism with Chinese characteristics in the new era, the CSRC firmly grasps the study and implementation of the spirit of the Central Financial work Conference as a major political task, and strengthens political guidance in accordance with the requirements of "comprehensively strengthening financial supervision." faithful performance of duties, cohesion of the system, "zero tolerance" to crack down on all kinds of violations of laws and regulations, and strive to achieve "long teeth with thorns" and angles in supervision and law enforcement. We should strengthen the foundation, exercise strict supervision and strict management, make every effort to maintain the smooth operation of the capital market, protect the legitimate rights and interests of investors, and provide a strong guarantee of the rule of law for the high-quality development of the capital market.

Investigation by the Securities and Futures Commission in 2023

717 illegal cases of securities and futures

In 2023, the CSRC investigated and dealt with 717 illegal cases of securities and futures, an increase of 19% over the same period last year, administrative penalties were imposed on 539 cases, an increase of 40% over the same period last year, and 1073 people (families) were punished, an increase of 43% over the same period last year.Scatterpoker8.9 billion yuan, an increase of 140% over the same period last year; 118 cases and clues suspected of securities and futures crimes were transferred to public security organs, effectively maintaining the operation order of the capital market and effectively protecting the legitimate rights and interests of investors. the effectiveness of cracking down on illegal acts of securities and futures continues to show, and the "zero tolerance" crackdown on high pressure has been continuously consolidated.

First, we should pay close attention to the "key minority" and strive to eradicate the "cancer" of the capital market such as fraudulent issuance and financial fraud, so as to improve the quality of listed companies.

Insist that "to declare is to take responsibility". For issuers and intermediary agencies suspected of major violations of laws and regulations, even if they withdraw their applications for listing, they should persist in checking to the end, put an end to "reporting with illness" and "enter through the mouth", and improve the quality of listed companies from the source. In 2023, four cases of false financial data submitted by issuers during the issuance declaration stage were investigated and dealt with. Among them, Science and Technology Innovation Board IPO enterprise Silxin, in order to meet the issuance conditions, falsely increased profits by 118% in 2020, which was the first fraudulent issue case found and dealt with by the CSRC at the declaration stage under the registration system, and the company and relevant responsible persons were fined 16.5 million yuan.

Adhere to systematic governance. Focus on the abuse of accounting policies, large amounts of asset impairment to adjust profits and other illegal acts, seriously investigate and deal with 32 companies with bad circumstances, and severely crack down on illegal acts of financial fraud in the name of impairment. Dig deep into the interest chain of financial fraud, in view of the cross-correlation of the subjects involved in many financial fraud cases, the high similarity between suppliers and customers, and the cooperation of upstream and downstream fraud, series and parallel analysis, comprehensive arrangement, centralized investigation and handling, effectively purify the ecosystem of listed companies.

Adhere to three-dimensional accountability. On the basis of increasing the intensity of administrative punishment, we should comprehensively use a variety of means, such as compulsory delisting, criminal liability and civil compensation, to comprehensively increase the cost of breaking the law. In 2023, 32 listed companies investigated and dealt with by the CSRC were forcibly delisted and 42 listed companies suspected of crimes were transferred to the public security organs. In the Zeda Yisheng and Amethyst storage fraud issuance case, the company and the person responsible were fined 142.5 million yuan and 90.71 million yuan respectively by the Securities Regulatory Commission, and the public security organs took criminal compulsory measures against more than a dozen responsible personnel. both companies were forced to withdraw from the market because of major violations, and investors received more than 1.3 billion yuan in civil compensation, forming a strong law enforcement deterrent to listed companies that dared to try the law.

Insist on accurate accountability. Adhere to seeking truth from facts, not in vain, equal to excessive punishment, increase the punishment of the "first evil" and "key minority", and reduce the adverse impact on the company's operation as much as possible. If Ye, the actual controller of the company in the Qixin shares case, instructs the company to engage in fraudulent issuance and illegal information disclosure, the CSRC fines Ye 14 million yuan and takes measures to ban access to the securities market for life. For illegal occupation guarantee cases, distinguish the main responsibilities of listed companies, actual controllers and Dong Jiangao, and deal with them separately so as to avoid causing "secondary harm" to the company.

The second is to pay close attention to the lack of diligence and due diligence, tighten the responsibility of the "gatekeeper", and urge and guide intermediary institutions to improve the quality of practice.

Insist on "investigating more than one case". On the basis of investigating and dealing with cases of information disclosure violations such as fraudulent issuance and financial fraud in accordance with the law, we should comprehensively verify the due diligence of the intermediary agencies involved in the case, and seriously deal with those suspected of breaking the law and crimes, and will never tolerate them. For example, the illegal and dereliction of duty of intermediary agencies involved in the whole chain crackdown on private network communication series case, Zixin Pharmaceutical Financial Fraud case, etc., shall be held responsible for the recommendation, audit, law and other intermediary agencies related to the fraudulent issuance of Gome Communications.

Adhere to the "double penalty system". Severely punish intermediary agencies that fail to fulfill their duties, and impose "double penalties" on institutions and personnel in accordance with the law. In 2023, administrative penalties were imposed on 25 intermediary institutions and 94 employees. In addition to the application of "property penalty" in accordance with the law, we should make full use of legal empowerment to explore the application of "qualification penalty". For example, if Zhongtian Huamao Accounting firm fails to perform due diligence in the audit practice of Dongfang net Power Annual report, the business income shall be confiscated and fined five times, and its securities service business will be suspended for six months; Sun, head of the Guohai Securities Project, which has not been diligent and responsible for the issuance of corporate bonds for Shengtong Group, has adopted a five-year ban on the securities market.

Third, we should pay close attention to "internal and external collusion", "self-theft" and "recidivism", maintain a high-handed law enforcement situation against illegal reduction, market manipulation, and insider trading, and actively create a fair, transparent and predictable trading environment.

Strictly investigate the illegal reduction of holdings. Focus on major shareholders, especially controlling shareholders, and actual controllers, and resolutely investigate and deal with nine cases of illegal reduction. Among them, the actual controller of China Nuclear Titanium dioxide conspired with CITIC Securities, CITIC Securities and Haitong Securities to use margin financing and derivatives tools to reduce their holdings by detour, so as to strengthen penetrating supervision, in accordance with the principle of substance over form, it is determined that the relevant units and individuals constitute a restricted period transaction in accordance with the law, with a total forfeiture of 235 million yuan.

Crack down on internal and external collusion to manipulate stock prices. In accordance with the law, some listed companies' actual controllers and Dong Jiangao will be severely punished to manipulate the market in the name of market value management by making use of the advantages of funds, shareholding and information. In 2023, nine cases of actual controllers and executives of listed companies colluding with hot money to manipulate the company's stock price were investigated and dealt with, and the relevant responsible units and personnel in Jintuo shares, Senyuan Electric and New Meixing cases were fined 660 million yuan, 610 million yuan and 95.67 million yuan respectively.

To deal with recidivism of market manipulation seriously. Individual lawbreakers who have been punished for manipulating the market for many times and who have not stopped being punished shall be dealt with severely and severely in accordance with the law. For example, Wang Mou copper gang manipulated seven stocks and was fined 1.5 billion yuan by the CSRC and transferred to the public security organ for criminal responsibility; Ren Mou Cheng gang manipulated stocks for a long time, and the amount of money involved in the case was large, and he committed the crime again after being punished three times by the CSRC. The CSRC imposed a fine of 297 million yuan and took measures to ban access to the securities market for life.

From the actual investigation and handling of a new type of illegal cases. By means of data analysis, we will crack down on new types of illegal activities in the capital market that are constantly changing and escalating in accordance with the law, and resolutely curb the momentum of spread. For example, in accordance with the law, some gangs use over-the-counter individual stock options and other financial derivatives to magnify the manipulation of earnings, and some personnel manipulate LOF funds, convertible bonds and other illegal acts. Actively cooperate with public security organs to investigate and deal with illegal market manipulation activities in which illegal gangs use remote manipulation software to hide traces of transactions, quickly sell warehouses, smash and ship goods, and seek huge illegal interests.

Strictly investigate and deal with insider trading of key personnel. There are listed companies or purchasers of listed companies, controlling shareholders, actual controllers, and Dong Jiangao of counterparties to major asset restructuring transactions of listed companies, put professional ethics behind them, take advantage of their identity to obtain inside information, and "steal from themselves" for their own illegal profits must be severely punished. For example, Zhang, chairman of logarithmic Technology, issued a fine of more than 66 million yuan for insider trading in the company's shares, and took measures to ban access to the securities market for life; Huang, a counterparty director of Suotong Development, was fined more than 5000 million yuan by insider trading. In addition, the CSRC is also seriously responsible for a series of cases involving public officials using insider information to trade "three Gorges Water Conservancy" and "East China Science and Technology".

Fourth, keep a close eye on bonds, private equity, futures and other fields, resolutely highlight the sword to illegal acts, leaving no dark corner or dead corner of financial supervision and law enforcement.

We will resolutely crack down on illegal activities in the bond market. Seriously investigate and deal with the illegal disclosure of information and misappropriation of funds hidden behind the default of bonds. Eight cases of bond violations were handled in 2023, involving 4 cases each of the exchange and the interbank bond market. If Evergrande real estate recognizes real estate sales revenue in advance, falsely increases revenue and profits by 2019, and causes fraudulent issuance of five corporate bonds, it is proposed to impose a total fine of more than 4.2 billion yuan on the company and relevant responsible persons. The mortgage property disclosed by Yuangao Industries was seriously inconsistent with the mortgage registration and the actual situation, and failed to disclose the bankruptcy information applied to the court and the default of related bonds, resulting in a total fine of 16 million yuan to the company and relevant responsible persons.

We will step up law enforcement against illegal private placement and futures. In 2023, 29 private placement and futures cases were handled, including misappropriation of fund property, violation of investor appropriateness system, illegal promised income, illegal investment operation, failure to disclose information in accordance with regulations, and so on. Pay close attention to relevant risk-related cases, such as eight private equity firms through equity holding and other covert ways to control a number of private equity firms to invest in each other, fabricating underlying targets and valuations, involving thousands of investors, accumulating tens of billions of yuan in private equity fund property. If a futures company fails to perform its management duties to its subsidiaries, fails to submit true, accurate and complete information, and is suspected of engaging in illegal financial activities, the CSRC promptly files and deals with the above-mentioned cases.

Severely crack down on violations of laws and regulations by employees. We will strengthen the management of employees, crack down on violations of laws and regulations, and be strictly accountable to institutions that lack effective control. Handle 61 cases of employees violating laws and regulations, covering illegal types such as illegal trading of stocks, private entrustment by clients, and fund practitioners using undisclosed information to trade. For example, focus on investigating and dealing with illegal and illegal acts such as buying and selling stocks by some employees of China Merchants Securities, impose administrative penalties on 63 people, confiscate a total of 81.73 million yuan, and ban one person from entering the securities market for life.

The focus of law enforcement work in 2024 is clear.

In 2024, the CSRC will adhere to Xi Jinping's thought of socialism with Chinese characteristics in the new era, fully implement the spirit of the 20th CPC National Congress and the Central Financial work Conference, and thoroughly implement the "opinions of the State Council on strengthening Supervision and preventing risks and promoting the High-quality Development of the Capital Market" Severely crack down on illegal acts in the securities and futures market that seriously endanger the smooth operation of the market, infringe upon the legitimate rights and interests of investors, have a bad social impact, and are strongly reflected by the masses, in order to speed up the construction of a safe, standardized, transparent, open, dynamic and resilient capital market.

One is to strengthen the clue discovery. We will increase the application of science and technology supervision, constantly improve the sensitivity and accuracy of clue discovery, strengthen cross-departmental, cross-disciplinary and cross-market supervision cooperation, strengthen the linkage between on-site supervision and off-site supervision, information disclosure and transaction supervision, and on-site inspection and inspection investigation, and resolutely eliminate regulatory gaps and blind areas.

The second is to strictly investigate major cases. We will focus on cracking down on illegal acts such as fraudulent issuance, financial fraud, occupation guarantee, illegal reduction, and so on, and closely guard against and severely crack down on illegal acts that affect the normal order of the market, such as market manipulation and insider trading, so as to provide an open, fair and fair market order for investors to enter the market.

The third is to improve the efficiency of law enforcement. Strengthen the full-cycle management of the whole process of case handling, strengthen process supervision, dynamic management, and control of key links, and effectively improve the quality of investigation and handling. We will optimize the allocation of law enforcement forces and quickly investigate and deal with major cases through such models as "joint investigation", "replacing training with cases" and "assisting team leaders".

Fourth, continue to deepen cooperation. We should give full play to the advantages of the mechanism of public security and procuratorial work in office and convenient communication, and jointly deploy and supervise the handling of cases by public security and procuratorial organs. Strengthen the linkage with relevant ministries and local governments in information communication, data sharing, and case handling, so as to form a work pattern of performing their respective duties, organic convergence, and joint governance.

Fifth, pay attention to both punishment and prevention. Give full play to the functions of inspection and law enforcement, "punishment", "governance", "prevention" and "education", let those who challenge the legal bottom line pay the due price, and promote reform and management with punishment, so as to realize the conservation and restoration of the market ecology. Enhance the transparency of law enforcement, timely inform the handling of financial fraud, market manipulation and other cases and typical cases, so as to achieve the effect of "handling a case, educating one, and warning one party".

Review: Zhang Qinfeng

Diting: focus source