China Securities Regulatory Commission investigates and deals strictly with financial fraud cases, holding parties involved in the fraud accountable for the first time.

Recently, the China Securities Regulatory Commission issued an administrative penalty notice to Nanjing Yuebo Power System Co., Ltd. (referred to as Yuebo Power, already delisted) for suspected violations of information disclosure laws and regulations. In addition to intending to severely punish the listed company, controlling persons, and relevant board and senior management responsible for falsification, the commission also intends to hold two individuals who cooperated in the falsification accountable. The Commission stated that it will continue to strictly implement central decision-making arrangements, adhere to the principles of "pursuing the main culprits" and "cracking down on accomplices," further strengthen accountability for those responsible for falsification and those who cooperate in falsification. Through the enhancement of a multi-dimensional accountability system involving administrative, civil, and criminal aspects, it aims to fully punish the planners, organizers, implementers, and collaborators of financial fraud, resolutely breaking the chain of false benefits and the "ecosystem." The original text is as follows: CSRC Strictly Investigating Financial Fraud Cases for the First Time Holds Collaborators in Fraud Accountable Simultaneously Recently, the Commission issued an advance notice of administrative penalties to Nanjing Yuebo Power System Co., Ltd. (referred to as Yuebo Power, already delisted) for suspected violations of information disclosure laws and regulations. In addition to intending to severely punish the listed company, controlling persons, and relevant board and senior management responsible for falsification, the commission also intends to hold two individuals who collaborated in the falsification accountable. According to the investigation, from 2018 to 2022, Yuebo Power inflated business revenue and profits by fictitious sales of new energy vehicle powertrains and assets, resulting in false records in its annual reports. The Commission intends to issue a warning to Yuebo Power and relevant responsible individuals, impose a total fine of 30.8 million yuan, and impose 8 to 10 years of securities market ban on two individuals. During the financial falsification process of Yuebo Power, individuals like Yu and He provided cooperation in false business operations via multiple companies under their control or coordination, constituting joint violations with Yuebo Power. The Commission intends to impose fines of 2 million and 300,000 yuan respectively on them. In addition, if suspected crimes are discovered, the Commission will transfer them to the public security organs for criminal responsibility. Financial fraud is a cancer that erodes the foundation of the market and has always been a key target for the CSRC's crackdown. In recent years, the Commission has rigorously implemented the central decision-making arrangements, focusing on key areas and market concerns, through stern measures to combat fabricated business and abuse of accounting policies and other violations of information disclosure laws, resolutely achieving "long teeth and sharp corners," with both "penalties and prevention," striving to shape a healthy market ecology. While severely cracking down on issuers and entities violating information disclosure laws of listed companies, the Commission has always closely monitored the "key few," such as actual controllers, controlling shareholders, board and senior management, as well as ensuring the vigilance of intermediary institutions such as sponsors, auditors, and legal personnel, by strengthening the responsibilities of the above entities and enhancing comprehensive accountability along the "full chain," it tries its best to stabilize and promote the healthy development of the capital market. The collusion between third parties cooperating with listed companies in committing fraud has become a new feature of financial fraud in the capital market in recent years, disrupting market order and seriously polluting market ecology, it must be severely dealt with. The Commission has been actively exploring various ways to ensure strict accountability for collaborators in fraud, in June last year, jointly with the Ministry of Public Security, Ministry of Finance, and other ministries, it formulated the "Opinions on Further Improving the Comprehensive Penalty and Prevention Work in Capital Market Financial Fraud," establishing a comprehensive penalty and prevention system for financial fraud, clarifying the work content of cracking down on collaboration in fraud and strengthening accountability for those who cooperate in fraud. The direct punishment of collaborators in the Yuebo Power case is an important measure taken by the Commission to implement central requirements, and in the future, it will comprehensively utilize methods such as direct filing of cases, transfer to relevant competent authorities for handling, and transfer to public security organs for criminal responsibility, to further strengthen the accountability of collaborators, and work together with all parties to shape a healthy market ecology. Next, the Commission will continue to strictly implement central decision-making arrangements, uphold the principles of "pursuing the main culprits" and "cracking down on accomplices," further strengthen accountability for those responsible for falsification and collaborators, through strengthening a multi-dimensional accountability system involving administrative, civil, and criminal aspects, aiming to fully punish the planners, organizers, implementers, and collaborators of financial fraud, resolutely breaking the chain of false benefits and the "ecosystem." At the same time, for related collaborators who take the initiative to rectify and actively cooperate in investigations and demonstrate meritorious performances, the Commission will always adhere to the policy of leniency and strictness, by applying lenient treatment in accordance with the law, alleviating or not imposing penalties, and other ways, it will adopt a lenient approach. This article is based on "China Securities Regulatory Commission," edited by Liu Xuan.