Those who dare to engage in market manipulation, malicious short selling will be bankrupted and jailed: China’s CSRC
Published: Feb 05, 2024 11:47 PM
Investors are closely monitoring the closing stock market trends for the day on February 5, 2024 in Yantai, Shandong Province. Photo: VCG

Investors are closely monitoring the closing stock market trends for the day on February 5, 2024 in Yantai, Shandong Province. Photo: VCG

The China Securities Regulatory Commission (CSRC) on Monday listed several cases of suspected market manipulation and "malicious short selling" and vowed to severely punish those engaged in such illegal activities.

Amid recent volatility in the stock market, the CSRC released several statements on Monday to address various aspects of the securities market and vowed to take measures to ensure stability.

"The stock market has continued to fluctuate recently, and some criminals have made illegal profits and harmed the legitimate rights and interests of investors," the CSRC said in a statement on Monday night, noting that it had stepped up supervision of trading activities and, in cooperation with the Ministry of Public Security, uncovered multiple cases of suspected market manipulation and malicious short selling.

In the statement, the CSRC listed three cases involving large amounts of stocks and capital. In one case, a criminal group controlled more than 100 accounts to manipulate a certain stock, used various means to affect the price, and then waited for opportunities to clear positions, leading to the stock price crashing. The group unloaded 2.7 billion yuan ($375 million) worth of stocks and gained 130 million yuan in illegal profits.

In another case, the actual controller of an investment institution used various illegal means to manipulate the prices of over 20 stocks and made 140 million yuan in illegal profits. Another criminal abused financial advantages and spent hundreds of millions of yuan to frequently place false orders for many futures products, creating false impressions of transactions, deceiving other investors, and then taking the opportunity to sell and make a profit of more than 40 million yuan.

"Manipulating the market and malicious short selling have seriously eroded people's 'money bags,' gone against all investors, and disrupted the normal sound and stable operations of the stock market," the CSRC said in the sharply-worded statement.

The regulator warned that it would maintain a "zero tolerance," resolutely crack down on illegal activities, and ensure that those who dare to illegally manipulate the market and engage in malicious short selling will be bankrupt and jailed.

The statement comes as Chinese stocks continued to fall on Monday, with the benchmark Shanghai Composite Index losing 1.02 percent during the day and the Shenzhen Component Index dropping 1.13 percent.

The CSRC also released at least three other statements related to the stock market or listed companies on Monday. In one such statement, the regulator vowed to closely monitor and take "forceful measures" to prevent risks from pledged shares.

In another statement, the CSRC said that it held a meeting on Sunday for progress on visits to listed companies, as a follow-up to a top-level meeting that urged officials to make such visits to promote the highlighted development of listed companies.

The meeting noted that such visits to listed companies have been conducted in 20 provincial-level localities as of Sunday, during which officials listened to requests made by listed companies in various areas such as tax policy, financial and land, and were working to solve the issues based on the actual situation.