GuShiio.com ① With the continuous emergence of the effects of supervision and law enforcement in recent years, the capital market ecology has undergone many positive changes;
② The supervision work reflects the strict tone of “long teeth, thorns” and corners;
③ The China Securities Regulatory Commission will continue to improve its ability to discover clues about violations of laws and regulations, reduce the case handling cycle, improve the quality and efficiency of case handling, and crack down on vicious violations such as fraudulent issuance, financial fraud, market manipulation, and illegal reduction of holdings.
Cailian News, February 21 (Reporter Lin Jian)On February 21, the Supreme People’s Procuratorate and the China Securities Regulatory Commission jointly held a press conference on “Strictly crack down on securities crimes in accordance with the law and promote the healthy and stable development of the capital market.” This press conference further clarified the next regulatory level’s plan to strictly crack down on securities crimes in accordance with the law. Deployment planning and actions.
A comprehensive review by the Financial Union reporter found that there are 12 relatively clear actions worthy of attention, including the Supreme People’s Procuratorate and the China Securities Regulatory Commission:
1. The China Securities Regulatory Commission continues to increase its efforts to crack down on manipulation behavior, improve its capabilities, continuously enrich clue screening methods, strengthen the use of technical means such as big data collection and intelligent analysis, strengthen comprehensive analysis and judgment of abnormal accounts and transaction information, and improve its understanding of manipulation. The accuracy and timeliness of clue identification and discovery;
2. The China Securities Regulatory Commission will concentrate its forces to crack down on and punish vicious manipulation cases such as internal and external collusion between listed companies and market institutions, driving stock prices to soar and plummet, and ignoring regulatory warnings and repeatedly investigating and committing crimes;
3. The China Securities Regulatory Commission will work together to improve the transaction mechanism and strengthen transaction monitoring and supervision, strengthen the coordination of civil and criminal three-dimensional accountability, promote the introduction of judicial interpretations of civil compensation, optimize the connection mechanism of administrative and criminal procedures, so that criminals dare not commit crimes or cannot commit crimes;
4. The China Securities Regulatory Commission will adhere to both punishment and prevention, treat both the symptoms and root causes, identify fraud clues through multiple channels such as off-site supervision, on-site inspection, public opinion monitoring, and complaint and report handling. In particular, it will improve the reward system for clues reporting and effectively play the role of internal “whistleblowers”;
5. The China Securities Regulatory Commission will keep a close eye on suspicious signs such as financial bathing, performance changes, and abnormal changes, improve its ability to detect violations of laws and regulations, optimize investigation processes, improve punishment efficiency, and continue to consolidate and continuously strengthen the “strict” atmosphere;
6. The China Securities Regulatory Commission will promote the further strengthening of civil compensation and criminal crackdowns, and strengthen three-dimensional accountability;
7. The procuratorate will continue to increase punishment for crimes in key areas such as financial fraud and infringement of the interests of listed companies, and maintain a high-pressure punishment posture for crimes such as insider trading and manipulation of the securities market;
8. The procuratorate will strengthen research on new situations and new issues in the securities field, accurately identify the use of financial derivatives to manipulate the market, the use of private placement and trust products to implement new securities crimes such as over-the-counter capital allocation, and promptly expose and crack down on new financial crimes;
9. The procuratorate will continue to improve the case assignment system under the “general-to-general” transfer mechanism, standardize the early intervention of assigned cases, guide evidence collection, review of arrests, and review and prosecution, increase supervision and guidance, and further improve the quality and efficiency of case handling;
10. The procuratorate will actively explore mechanisms to support and cooperate with the litigation system and mechanism of special representatives for securities disputes, unify loss identification standards, cooperate with criminals and civilians to efficiently dispose of property involved in the case, and protect the rights and interests of investors through multiple channels;
11. The procuratorate will focus on promoting the connection mechanism for administrative penalties for non-prosecution cases to be transferred to the securities regulatory authorities, so as to achieve mandatory penalties for illegal crimes, and promote the construction of a three-dimensional accountability system;
12. The procuratorial organ will deepen the construction of the procuratorial organ’s securities crime case handling base, give full play to the leading role of the base in case handling, theoretical research, work innovation, etc., and drive the overall improvement of the quality and efficiency of securities and futures case handling by procuratorial organs across the country.
The meeting also released the 55th batch of guiding cases for the Supreme People’s Procuratorate and the first batch of guiding cases for administrative law enforcement by the China Securities Regulatory Commission. They are not only specific measures to implement the decisions and arrangements of the Party Central Committee and the State Council on capital market supervision and law enforcement, but also a public demonstration of recent years. Some landmark achievements in administrative law enforcement and criminal justice are expected to guide the whole society to build more consensus on the rule of law and effectively safeguard the “three public” in the market and the legitimate rights and interests of investors.
Main line 1: Punish violations of the law “already” and deter violations of the law “before they occur”
It is noteworthy that this press conference also focused on reporting the progress and effectiveness of securities crime procuratorial work in recent years and the progress and effectiveness of securities administrative law enforcement work in recent years. This is the actual basis for the main line of follow-up supervision. In a series of statements, clear data reflects how the regulatory authorities punish “already” violations of the law and deter “before they occur.”
Li Ming, vice chairman of the China Securities Regulatory Commission, mentioned that the purpose of strict supervision and strict management is to strengthen the foundation. While insisting on severely cracking down on various illegal activities in accordance with the law, the China Securities Regulatory Commission also pays attention to the guarantee role of the rule of law in consolidating the foundation, stabilizing expectations, and benefiting the long-term, and strives to promote the continuous optimization of the market ecology.
It reflects the clear attitude of the CSRC to severely crack down on the reduction of holdings of “covering up overall violations with local compliance”.In accordance with the principle of “substance is more important than form”, more than 200 million yuan was fined and fined to parties involved in a listed company’s “fixed increase, decrease and arbitrage” case. The reporter noticed that this case is the “fixed increase arbitrage + illegal reduction case” of CNNC Titanium White, including 133 million yuan for Wang Zelong, the actual controller of CNNC Titanium White, 21.1939 million yuan for Hong Haowei, 775,000 yuan for Han Yuchen, 71.66 million yuan for CITIC Securities and CITIC China Securities, and 7.7644 million yuan for Haitong Securities.
Maintaining the determination of law enforcement, handling a number of typical cases with a “zero tolerance” attitude, effectively rectifying all types of violations, and deeply purifying the market environment.In 2024, the China Securities Regulatory Commission handled 739 cases of various types and made 592 penalty decisions, with fines of 15.3 billion yuan, more than twice the previous year. Among them, the fine for Evergrande Real Estate’s financial fraud case exceeded 4 billion yuan. Together with the Ministry of Finance, the audit agency issued a “largest” fine of 441 million yuan in history for similar cases.
In terms of civil compensation, the China Securities Regulatory Commission has given full play to its “leading” role in administrative law enforcement, and strict accountability has provided important evidence support for civil litigation.。For example, based on the facts determined by the China Securities Regulatory Commission’s penalty decision, the insurance institution filed the first subrogation lawsuit against the appropriation of funds by the controlling shareholder of a listed company, recovering 240 million yuan of the occupied funds, and the actual controller and relevant senior executives assumed joint and several liability for compensation; Promote false statements The first case of the special representative lawsuit was settled through mediation, and 7195 investors received compensation of more than 280 million yuan.
Highlight the key crackdown on illegal crimes such as financial fraud and “key minority” of listed companies.In 2024, a total of 163 cases of various types were transferred, and more than 600 suspected criminal subjects were transferred.
The China Securities Regulatory Commission has stepped up its crackdown on market manipulation.In 2024, the China Securities Regulatory Commission imposed penalties on 42 market manipulation cases, with fines and fines of 4.95 billion yuan, a year-on-year increase of 42.2%, of which fines of more than 10 million yuan accounted for 41.9%. 32 suspected criminal manipulation cases were transferred to the public security organs, and 104 criminal suspects were transferred.
The China Securities Regulatory Commission continues to implement full-chain crackdowns and penalties on financial fraud cases.In terms of penalties, administrative penalties were imposed on 61 financial fraud cases in 2024, a year-on-year increase of 17%; the average penalty amount was 15.77 million yuan, a year-on-year increase of 12%; fines were imposed on 7 cases in accordance with the legal maximum limit, a year-on-year increase of 75%; 69 “directors and supervisors” personnel were banned from the market, a year-on-year increase of 9.5%; In terms of accountability, 35 cases not only punished listed companies and their responsible personnel, but also held accountable for the instigation of “chief evil” organizations such as major shareholders and actual controllers, a year-on-year increase of nearly 60%. Administrative penalties were imposed on 39 intermediaries, suspending business for 5 intermediaries, and continuously tightening the responsibilities of “gatekeepers” of sponsors, accounting firms and other institutions.
The press conference also reviewed how to effectively consolidate the legal responsibilities of relevant parties through supervision and law enforcement. example,Consolidate the fiduciary obligations of major shareholders and actual controllers, the loyal and diligent obligations of “directors and supervisors” personnel, the “gatekeeper” obligations of intermediaries, the fiduciary obligations of asset managers, etc., and resolutely reverse the “injustice of public companies” and “directors” Insensible “and” private placement “and other chaos, promote the continuous improvement of the governance and internal control level of listed companies, guide all parties in the market to play orderly games based on legal rules and market logic, and continue to enhance market self-restraint, self-correction, Endogenous vitality of self-repair.
He Yanchun, director of the Office of the Administrative Punishment Committee of the China Securities Regulatory Commission, also mentioned that listed companies are the logical starting point for the operation of the capital market and an important foundation for the high-quality development of the capital market. Financial fraud and misrepresentation are essentially asset-side fraud, and market manipulation and insider trading are essentially investment-side fraud. They will erode and damage the foundation of market integrity, undermine investor confidence, destroy market ecology, and hinder the improvement of the quality of listed companies. The four cases involved different links such as the issuance and listing of listed companies, refinancing, material asset reorganization, and continuous information disclosure. By punishing violations, market entities such as actual controllers,”directors and supervisors” personnel, intermediaries, and securities practitioners are guided to strictly abide by the bottom line of the law, be honest and trustworthy, and seek benefits from righteousness, so as to achieve the law enforcement effect of “promoting governance through cases”.
Main line 2: Firmly establish a firm position for investors
At an investor symposium held by the China Securities Regulatory Commission on February 8 this year,Wu Qing, Chairman of the China Securities Regulatory Commission, emphasized that investors are the foundation of the market, and protecting the legitimate rights and interests of investors is the primary task of securities supervision.It is mentioned that one of the regulatory tasks is to severely crack down on all types of illegal activities that infringe on the legitimate rights and interests of investors and pursue them to the end, strive to create a market ecological environment with more standardized financing and more secure investment, and promote the continuous high-quality development of the capital market. Step to a new level.
Li Ming, Vice Chairman of the China Securities Regulatory Commission, once again stated at a press conference on the 21st that the China Securities Regulatory Commission has always regarded law enforcement as its core task, continuously improved systems and mechanisms, and continued to improve law enforcement effectiveness. He also said that the China Securities Regulatory Commission firmly stands firm on investors. Small and medium investors in my country’s stock market account for as high as 96%, have weak risk tolerance and relatively insufficient self-reliant ability. They are “invisible parties” in cases. Regarding specific issues such as evidence admission, application of law, and balance of legal interests in law enforcement cases, the CSRC, on the premise of administration in accordance with the law, stands more from the perspective of protecting investors, making both “technical judgment” and “value judgment”.
Main line 3: Emphasize the main tone of “strictness” and adhere to accountability throughout the chain
The reporter noticed that the emphasis on “strictness” and the insistence on full-chain accountability throughout the entire press conference fully reflected the procuratorate and the CSRC’s severe attitude towards cracking down on securities crimes and their determination to pursue accountability throughout the chain.
Ge Xiaoyan, deputy chief prosecutor of the Supreme People’s Procuratorate, pointed out that the procuratorial organs resolutely implement the decisions and arrangements of the Party Central Committee and strictly crack down on securities crimes in accordance with the law. From 2022 to 2024, the number of securities crime cases and the number of people prosecuted by procuratorial organs across the country will increase significantly annually, maintaining a high-pressure posture in key criminal areas such as financial fraud, insider trading, and market manipulation. The procuratorate adheres to the entire chain of accountability, not only prosecuting those who directly commit crimes, but also prosecuting those who organize and direct fraud, directors and supervisors, and intermediary organization personnel who cooperate with fraud, to ensure that the foundation of integrity in the capital market is solid. By issuing guiding cases, the procuratorate further clarified the application of the law and the standards for combating it, demonstrating its zero-tolerance attitude towards securities crimes.
Du Xueyi, director of the Economic Crimes Procuratorate Office of the Supreme People’s Procuratorate, said that the guiding cases released this time focus on prominent issues of securities crimes, clarify the rules for legal application and accusation proof, and demonstrate the judicial attitude of punishing securities crimes strictly in accordance with the law and throughout the chain. The case emphasizes that the “key minority” such as the chairman and senior management of the listed company should be held accountable in accordance with the law, and at the same time, the responsibility of the “gatekeeper” of the intermediary organization should be consolidated, and the intermediary personnel who cooperate with the fraud should be dealt with in accordance with the law. In addition, the case also clarifies the rules for the recovery of illegal proceeds to ensure that criminals are economically unprofitable and embodies the judicial concept of strict crackdown and full chain accountability.
He Yanchun, director of the Office of the Administrative Punishment Committee of the China Securities Regulatory Commission, said that the China Securities Regulatory Commission has cracked down on securities violations with a “zero tolerance” attitude. By issuing guiding cases, it has established a “benchmark” for law enforcement and demonstrated its determination to strictly supervise. In 2024, the China Securities Regulatory Commission will impose high fines on cases such as financial fraud and market manipulation, and impose market bans on relevant responsible persons, reflecting the strict tone of “long teeth and thorns”. At the same time, the China Securities Regulatory Commission insists on precise accountability and divides responsibility gradients based on the differences between subjective maliciousness and objective behaviors of relevant personnel to ensure that “excessive penalties are commensurate.” By strengthening law enforcement and regulatory coordination, the CSRC promotes the continuous optimization of the capital market ecology and provides legal guarantee for high-quality market development.
Main line 4: Not only maintain law enforcement efforts, but also release the law enforcement temperature
At the press conference, the China Securities Regulatory Commission adhered to objectivity, neutrality, impartiality, and equality before the law in law enforcement, so as to avoid abnormal and serious law enforcement results, different penalties for colleagues, and obvious unfairness. It not only maintained the intensity of law enforcement, but also released the temperature of law enforcement, and continued to improve the transparency of law enforcement., strive to be strict and measured, strict and effective.
The “Basic Rules for the Discretion of Administrative Punishments” were promulgated, stipulating six types of discretion and application circumstances, including general punishment, severe punishment, lighter punishment, and no punishment, so that the type and extent of punishment should be matched with the facts, nature, circumstances, degree of social harm and the parties. The degree of subjective fault of the party is matched, providing a unified “yardstick” for law enforcement discretion, ensuring fairness, justice, and no injustice, and resolutely preventing willfulness of power and abuse of power.
The second is to continuously strengthen internal control supervision of law enforcement quality.Improve and improve the law enforcement system, clarify law enforcement procedures, standards and powers, ensure that case handling procedures are in compliance with laws and regulations, factual evidence is conclusive and sufficient, determination logic is clear and strict, punishment results are fair and appropriate, legal documents are rigorous and accurate, and strive to make every case stand up to judicial review and market testing.
The third is to respect and protect the legitimate rights and interests of the parties concerned in accordance with the law.Investigation and evidence collection not only collects evidence that is unfavorable to the parties, but also collects evidence that is beneficial to the parties; notification and hearing not only explains the law to the parties, but also protects the parties ‘rights to review files and provide evidence and cross-examination, and fully listens to the opinions of the parties; The punishment conclusion not only consciously accepts supervision from all parties in society, but also protects the trade secrets and personal privacy of the subjects involved in the case in accordance with the law, and strives to enable the parties to feel standardized, civilized, clean, fair and just in every law enforcement act.
Main line 5: Strengthen governance synergy
This press conference comes at an important time. In May 2024, the Supreme People’s Court, the Supreme People’s Procuratorate, the Ministry of Public Security, and the China Securities Regulatory Commission jointly issued the “Opinions on Several Issues Concerning Handling Securities and Futures Illegal and Criminal Cases” to strengthen the connection between administrative law enforcement and criminal justice, and improve the coordination and restriction mechanism of law enforcement and judicial departments; In July, the General Office of the State Council forwarded the “Opinions on Further Improving Comprehensive Punishment and Prevention of Financial Fraud in the Capital Market” by the China Securities Regulatory Commission and other departments, emphasizing increasing all-round and three-dimensional accountability efforts; In August, the Economic Crimes Procuratorate of the Supreme People’s Procuratorate issued the “Answers to Issues Related to Handling Financial Fraud Crime Cases”, which clarified key issues in fact identification and law application in financial fraud crime cases and provided guidance for procuratorial organs to handle cases.
In January this year, the Supreme People’s Procuratorate issued three typical cases of strictly punishing intermediary organizations for crimes related to financial fraud in accordance with the law. The case interpretation law warned various intermediary organizations in the capital market to comply with laws and regulations and perform their duties with due diligence, demonstrating the strict and full-chain punishment of intermediaries in accordance with the law. The judicial attitude of organizing crimes related to financial fraud and protecting the legitimate rights and interests of investors.
Li Ming, vice chairman of the China Securities Regulatory Commission, said that he will continue to exert joint efforts in governance with relevant parties such as the judicial department and financial supervision department to jointly safeguard the high-quality development of the capital market.
Du Xueyi, director of the Economic Crimes Procuratorate of the Supreme People’s Procuratorate, also said that he would strengthen coordination between procuratorial performance and administrative supervision and actively promote industry governance. Give better play to the advantages of the stationed system and deepen regular cooperation with the CSRC and its dispatched offices in information sharing, clue transfer, consultation and discussion, and professional support. Closely integrate supervision and case handling, we will work with securities regulatory agencies to conduct in-depth research on the characteristics and situation of illegal and criminal activities in the capital market, analyze issues in corporate governance, industry management and other aspects, and promote the improvement of supervision in accordance with the law by formulating and issuing procuratorial suggestions and opinions.
