On February 21, 2025, the Supreme People’s Procuratorate announced the 55th batch of guiding cases, which has attracted widespread attention in legal and social circles. This batch of cases covers key areas of the capital market and high-frequency crimes, and mainly exhibits the following characteristics:
1. Focusing on prominent issues in the handling of securities cases, clarifying the application of laws and rules for prosecution and proof;2. Demonstrating a strict, full-chain judicial approach to cracking down on securities-related illegal activities, refining and standardizing the hierarchical and categorized handling rules;3. Reflecting the effectiveness of collaboration and coordination between procuratorial organs and securities regulatory agencies in the integration of criminal enforcement and administrative regulation.
This release not only represents an authoritative interpretation of the applicable laws by judicial authorities but also provides clearer legal guidance for enterprises and the public, helping to enhance society’s understanding and application of legal practices. Below is an introduction to the basic facts, review process, case handling results, and guiding significance of these cases.
Case Ⅰ: Fraudulent Issuance of Bonds by Jia Leather Co., Ltd., Zhou Moumou, and Others & Major Falsehoods in Certified Documents by Ma Mou (Guiding Case No. 219)
Basic Facts
Jiangsu Suqian Jia Leather Co., Ltd. (hereinafter referred to as “Jia Company”) planned to raise funds through the issuance of private bonds for small and medium-sized enterprises under the decision of its legal representative, controlling shareholder, and executive director Zhou Moumou. As the audit firm lacked securities-related audit qualifications, Wang Moumou (a partner at Yi Accounting Firm) contacted Ma Mou (the person in charge of Bing Beijing Firm), a firm with qualified credentials, to be responsible for issuing the final audit report.
During the audit process, Wang Moumou discovered that Jia Company’s actual financial status did not meet the requirements for bond issuance. Therefore, he suggested falsifying financial data to meet the financing needs. With Zhou Moumou’s approval, General Manager and Chief Financial Officer Lin Moumou, along with Finance Manager Ye Moumou, provided false financial information, tampered with financial statements, and forged tax declarations. Based on these false records, Wang Moumou created fraudulent audit working papers and further fabricated financial documents, inflating Jia Company’s 2010 and 2011 operating revenue by more than RMB 677 million and net profit by over RMB 104 million.
As the final reviewing accountant, Ma Mou seriously neglected his duties by failing to verify the false financial data. He directly signed the audit report and instructed others to stamp the report with the seals of certified accountants who did not participate in the audit, ultimately issuing a seriously false audit report in the name of Bing Beijing Firm. Wang Moumou paid RMB 90,000 to Bing Beijing Firm for the audit.
Subsequently, Jia Company appointed Ding Securities Company as its underwriter, and based on the fraudulent audit report, prepared a prospectus that further exaggerated the company’s financial data, inflating operating revenue by RMB 1.057 billion and net profit by RMB 145 million. Zhou Moumou, Lin Moumou, and Ye Moumou signed the prospectus in confirmation. On February 5, 2013, Ding Securities Company successfully filed the prospectus with the Shenzhen Stock Exchange and issued the “Jia Company 2012 Private Bond for SMEs”, raising RMB 1.5 billion. However, when the bond matured in 2015, Jia Company was unable to repay the principal and outstanding interest, causing significant economic losses to investors.
Procuratorial Review Process
Arrest Review
On November 10, 2017, the Shanghai Public Security Bureau requested the approval of arrest for Lin Moumou and Ye Moumou on suspicion of fraudulent bond issuance. The procuratorial authority approved the arrests on November 17, 2017, and requested further investigation on the following key aspects:1) Determine whether Zhou Moumou was the organizer of the fraudulent bond issuance;2) Clarify the division of responsibilities among personnel in Jia Company during the bond issuance process;3) Investigate Wang Moumou and Ma Mou to ascertain whether they were guilty of fraudulent bond issuance, providing false certification documents, or issuing a materially false certification document;4) Supplement relevant documentation concerning Jia Company’s bond issuance.
On March 6, 2019, the public security authority filed a case against Ma Mou based on the procuratorial authority’s instructions. Zhou Moumou had fled due to involvement in other crimes but was later apprehended by the Jiangsu police. On March 2, 2020, he was sentenced to eight years in prison for other crimes and was later transferred back for further investigation.
Indictment Review
From 2018 to 2020, the public security authority successively transferred prosecution materials to the procuratorial authority, charging:
1) Jia Company, Lin Moumou, Ye Moumou, and Wang Moumou with fraudulent issuance of bonds;2) Ma Mou with issuing a materially false certification document;3) Zhou Moumou with fraudulent issuance of bonds.
The procuratorial authority determined:
1) Wang Moumou knowingly assisted Jia Company in financial fraud, actively using his professional expertise throughout the process, constituting joint liability for fraudulent bond issuance;2) Ma Mou, while not directly involved in falsification, seriously neglected his auditing responsibilities, constituting issuing a materially false certification document.
From 2018 to 2021, the procuratorial authority successively filed public prosecutions in court.
Prosecution and Trial
From 2018 to 2021, multiple public trials were conducted in court. During the trial, the defense raised the following arguments:
1) Private bonds for SMEs do not fall within the scope of fraudulent bond issuance crime. The defense argued that this crime, stipulated in the 1997 Criminal Law, was only applicable to publicly issued bonds, whereas Jia Company’s bonds were privately issued to qualified investors and thus should not fall under the crime. Prosecution’s rebuttal is that private bonds for SMEs still qualify as “corporate bonds” under the law, making them subject to fraudulent issuance provisions.2) Wang Moumou should be exempt from criminal liability. The defense claimed that Wang Moumou was only a third-party accountant, gained little profit, and that his offense was minor. Prosecution argue that accountants play a crucial “gatekeeping” role in bond issuance. Wang Moumou not only failed in his audit responsibilities but also actively participated in fraud, making criminal liability unavoidable.
Decision
On February 22, 2019, September 29, 2020, and June 30, 2021, the court ruled: 1) Jia Company: Guilty of fraudulent bond issuance, fined RMB 4.5 million;2) Zhou Moumou: Sentenced to 4 years and 6 months for fraudulent bond issuance, combined with previous crimes, final sentence: 11 years imprisonment and a fine of RMB 340,000;3) Lin Moumou, Wang Moumou, and Ye Moumou: Sentenced to prison terms ranging from 3 years to 1.5 years, some with suspended sentences, fined;4) Ma Mou: Convicted of issuing a materially false certification document, sentenced to imprisonment and fined.
Wang Moumou and Zhou Moumou appealed, but the second-instance court upheld the original verdict.Case Impact
The prosecutorial authorities discovered severe internal control loopholes in accounting firms’ audits of private placement bonds. Consequently, they submitted the following rectification recommendations to the Chinese Institute of Certified Public Accountants (CICPA):1) Strengthen legal and professional ethics training to enhance accountants’ compliance awareness.2) Improve the full-process risk control system to prevent audits from becoming a mere formality.3) Reinforce industry regulation to prevent similar cases from occurring.The CICPA has attached great importance to these issues, formulating ten rectification measures and launching a special rectification campaign to enhance industry governance standards.Guiding Significance1) Clarifying the Scope of Application for the Crime of Fraudulent Bond Issuance: As modern financial products continue to evolve, the law should be applicable to new types of bonds, such as small and medium-sized enterprise (SME) private placement bonds and short-term financing bonds, to safeguard investors’ rights and interests.2) Legal Accountability for Intermediary Personnel: It is necessary to distinguish whether intermediary personnel intentionally engaged in fraud or caused severe consequences due to gross negligence, and accordingly apply either the crime of fraudulent bond issuance or the crime of issuing false certification documents.3) Strengthening Financial Supervision to Mitigate Capital Market Risks: By handling individual cases, regulatory authorities can drive industry-wide rectification, promote the healthy development of the sector, and enhance financial market transparency.This case not only serves as legal punishment for the involved enterprises and individuals but also advances industry governance in the capital market. It provides valuable insights for regulating the practices of intermediary institutions and protecting investors’ interests.
Case II: Wu Moumou and Others’ Violation of Important Information Disclosure Regulations (Guiding Case No. 220)
Basic Facts
Jia Group Co., Ltd. (hereinafter referred to as “Jia Company”) is a publicly listed company on the Shenzhen Stock Exchange. In 2016, due to two consecutive years of financial losses, the company faced the risk of delisting. At this time, Wu Moumou, the then chairman, instructed Chief Financial Officer (CFO) Gou Mou and others to falsify financial data to artificially inflate profits. The specific fraudulent methods included:1) Reducing costs: Adjusting the harvesting area of farmed scallops, reducing it from 694,100 mu to 554,800 mu, thereby understating operating costs by over RMB 60 million.2) Reducing expenses: Failing to write off scallops that had ceased to exist, reducing non-operating expenses by over RMB 70 million.3) Inflating profits: As a result, in its 2016 annual report, Jia Company overstated profits by more than RMB 130 million, accounting for 158.11% of the disclosed total profit.
Between late 2017 and early 2018, in an attempt to offset the previously inflated profits while replanting scallops in undisclosed harvesting areas, Wu Moumou and others again falsified financial data:1) Increasing costs: Adjusting the actual harvesting area from 549,100 mu to 607,000 mu, inflating operating costs by over RMB 60 million.2) Fabricating write-offs: Using false sampling data and fabricated scallop mortality reports, they overstated non-operating expenses and asset impairment losses by more than RMB 210 million.3) Reducing profits: Consequently, in Jia Company’s 2017 annual report, they understated profits by RMB 270 million, accounting for 38.57% of the disclosed total profit.
Additionally, Wu Moumou and others were found guilty of fraud, collusive bidding, bribery, and commercial bribery.
Procuratorial Review Process
Arrest Review
Between April and July 2021, the Dalian Public Security Bureau successively requested arrest approval for Wu Moumou, Gou Mou, and others. The procuratorial authority determined that the key issue in confirming financial fraud was verifying the authenticity of the harvesting area data. The China Securities Regulatory Commission (CSRC) provided Beidou satellite navigation data and real trajectory records of harvesting vessels, confirming that Jia Company had fabricated and falsely disclosed the harvesting area, catch costs, and operating profits. Accordingly, the procuratorial authority approved the arrests.
However, as Wu Moumou and others denied wrongdoing and destroyed evidence, the procuratorial authority instructed the police to collect additional evidence, including:1) Verifying the reliability of the Beidou satellite navigation data to ensure its admissibility as evidence.2) Comparing Jia Company’s financial records with the navigation data and fuel subsidy claims to confirm the extent of financial falsification.3) Reconstructing accurate financial data and quantifying the fraudulent profit amounts.4) Determining the responsibility of senior management, including whether Wu Moumou and Sun Moumou acted with criminal intent.
Indictment Review
On August 31, 2021, after gathering additional evidence, the public security authorities transferred Wu Moumou and others to the procuratorial authority for prosecution. On January 20, 2022, the procuratorial authority indicted Wu Moumou, Gou Mou, Liang Mou, and others for violating important information disclosure regulations. Some individuals with minor offenses were not prosecuted.
Trial and Verdict
Court Proceedings
On March 31, 2022, the Dalian Intermediate People’s Court held a public trial for this case. The defense challenged the prosecution by arguing:1) Wu Moumou did not engage in financial fraud or violate disclosure regulations.2) The big data analysis report should not be considered valid evidence.3) Liang Mou was unaware of financial falsification before public disclosure.
In response, the prosecution provided key evidence, including:1) Beidou satellite navigation data and reconstructed harvesting area maps, corroborated by fuel subsidy records to prove financial fraud.2) Audit reports reconstructing Jia Company’s actual financial performance and comparing it with publicly disclosed data to quantify fraudulent profits.3) Internal company documents, board resolutions, and witness testimonies, proving that Wu Moumou knowingly orchestrated the financial falsification and signed off on fraudulent financial reports.
Verdict and Sentencing
On October 31, 2022, the court delivered its first-instance verdict:1) Wu Moumou: Guilty of violating important information disclosure regulations, sentenced to 2 years and 6 months in prison, fined RMB 200,000; combined with previous convictions, the final sentence was 15 years imprisonment and a total fine of RMB 920,000.2) Gou Mou, Liang Mou, and others: Sentenced to prison terms ranging from 1 year and 7 months to 1 year and 10 months, with some receiving suspended sentences and fines.
On May 25, 2023, the higher court upheld the original verdict.
Impact and Regulatory Recommendations
During case handling, the procuratorial authority identified widespread financial fraud methods used by listed companies and issued the following recommendations:1) Strengthening financial fraud investigations: Addressing “inflating profits first, then offsetting losses” schemes by reconstructing financial data using audit techniques and technology.2) Enhancing utilization of regulatory agency evidence: Leveraging electronic data and financial records from the CSRC as key criminal evidence.3) Categorized prosecution of financial fraud perpetrators: Primary offenders (CEOs, CFOs, senior executives) should be held strictly accountable; Mid-level managers directly involved in financial fraud should be appropriately penalized; Lower-level employees following orders with minor involvement may receive leniency.
This case reinforced market integrity standards, emphasizing that listed companies must comply with financial disclosure laws to prevent investor losses and market disruptions.
Case III: Jiang Moumou Insider Trading Case (Guiding Case No. 221)
Basic Facts
Jiang Moumou was an employee of Yi Capital Management Co., Ltd. (hereinafter referred to as “Yi Company”), a subsidiary of Jia Holding Group Co., Ltd. (hereinafter referred to as “Jia Company”). In April 2018, Jia Company faced a debt crisis after failing to raise RMB 22 billion through short-term financing bonds. On April 24, at 11:00 AM, the first bond issuance attempt failed. Later that day, Jia Company announced the cancellation of the issuance, which triggered market concerns over its financial situation. That evening, Jia Company’s Chairman Yao Moumou convened a meeting with senior executives to discuss response measures, and Jiang Moumou was invited to attend. The meeting required all participants to maintain confidentiality regarding the information. On April 25, Jiang Moumou liquidated all of his holdings in Bing Environmental Co., Ltd. (hereinafter referred to as “Bing Company”), a publicly listed company controlled by Jia Company, selling 1.25 million shares for RMB 8.15 million. After the incident was exposed, the Shenzhen Stock Exchange calculated that Jiang Moumou avoided a loss of RMB 3.36 million. On May 2, 2018, Bing Company disclosed a public announcement stating that Jia Company was experiencing significant financial uncertainty, which could materially impact Bing Company. Consequently, Bing Company’s stock was suspended from trading on that date. On May 4, Bing Company further disclosed that if Jia Company failed to resolve its debt crisis, it might lose control over Bing Company. Upon resumption of trading, Bing Company’s stock hit the daily limit down for four consecutive trading days, and on the fifth trading day, the stock dropped by 8.59%, with a total decline of 48.59%.
In June 2020, the Xiamen Bureau of the China Securities Regulatory Commission (CSRC) imposed an administrative penalty, concluding that Jia Company’s debt crisis constituted insider information and that Jiang Moumou was an insider. The CSRC ordered the confiscation of his RMB 3.36 million in illegal gains and imposed an additional fine. Jiang Moumou paid both the fine and the confiscated amount. On June 28, 2021, Jiang Moumou voluntarily surrendered to law enforcement and confessed to the crime of insider trading.
Procuratorial Review Process
Indictment Review
On November 22, 2021, the Hangzhou Public Security Bureau referred Jiang Moumou for prosecution on insider trading charges to the Hangzhou Municipal Procuratorate. During the review, the procuratorial authority identified two key legal issues requiring further investigation:1) Jiang Moumou was not a senior executive of Jia Company, and Yi Company was not responsible for Jia Company’s bond issuance. However, he still attended the high-level meeting where insider information was disclosed. This raised doubts about whether he qualified as an insider.2) The calculation method for avoided losses required further verification to ensure accuracy. Shenzhen Stock Exchange data confirmed that the avoided loss was calculated using the closing price on the day the limit down was broken. This method was deemed reasonable and valid.
On July 2, 2022, the Hangzhou Municipal Procuratorate filed a public indictment, charging Jiang Moumou with insider trading.
Trial and Verdict
On November 17, 2022, the Hangzhou Intermediate People’s Court held a public trial. Jiang Moumou pleaded guilty to the charges and did not dispute the facts or legal accusations. However, his defense team argued for leniency, stating:1) The 2019 revision of the Securities Law removed the “catch-all clause” that previously allowed securities regulators to subjectively identify additional categories of insider information. The debt crisis was not explicitly listed as insider information under the 2019 Securities Law.2) Jia Company had already disclosed the bond issuance failure on Shanghai Clearing House and ChinaMoney.com, which should be considered public information.
In response, the prosecution argued:1) The lack of an explicit listing does not negate the classification of insider information.2) Jia Company’s debt crisis posed a significant risk to Bing Company’s control structure, which directly impacted its stock price, meeting the criteria for insider information.3) The prior announcements on financial websites did not fully disclose the severity of the crisis or the potential loss of control over Bing Company. Furthermore, these platforms did not meet the regulatory standards for public disclosure under the Securities Law.
Verdict and SentencingOn December 29, 2022, the court issued its verdict: Jiang Moumou was convicted of insider trading, with particularly serious circumstances; Given his self-surrender, full return of illegal gains, and payment of administrative fines, the court reduced his sentence, sentenced to 3 years in prison, with a 5-year suspended sentence and fined RMB 8 million. Jiang Moumou did not appeal, and the verdict became final.
Case Impact
1) Determination of Inside Information Should Consider Market Impact. The definition of inside information is not limited to the items enumerated in the Securities Law but should be based on whether the information influences investors’ decision-making. The risk of a change in the controlling interest of a listed company may constitute inside information. Even if part of the information is disclosed, it will still be considered non-public unless it is fully and accurately released on a platform recognized by the Securities Law.2) Scope of Insiders Should Be Determined Holistically. Individuals who are not explicitly listed in the Securities Law but obtain inside information through their position, family ties, or business relationships can still be legally recognized as insiders. In this case, although Jiang was not an executive of Company A, he was entrusted with handling the group’s debt issues, qualifying him as an insider.3) Calculation of Illegal Gains from Defensive Insider Trading. The calculation of illegal gains from insider trading should be based on the point at which the market has fully absorbed the disclosed information. In this case, the closing price on the day the stock price limit-down was lifted was used as the benchmark to ensure the reasonable and fair calculation of avoided losses. Furthermore, this case reinforces regulatory oversight of insider trading in the capital market, clarifies the criteria for identifying insiders and calculating illegal gains, and serves as a crucial warning for maintaining market integrity.
Case IV: Zhao Moumou and Others Manipulating the Securities Market (Guiding Case No. 222)
Basic Facts
Zhao Moumou, Zhao, Former Deputy General Manager of the Asset Management Department at Company A Futures Co., Ltd. (hereinafter referred to as “Company A”), Exploited His Position to illegally Control FOF Fund Assets, Committing Crimes of Embezzlement and Market Manipulation
From 2016 to 2018, Company A issued five phases of FOF (Fund of Funds) products, raising a total of RMB 1.086 billion, which was invested in nine private equity funds amounting to RMB 936 million. Zhao, leveraging his position, unlawfully transferred fund management authority, gaining control over fund operations.
Between late 2017 and August 2018, Zhao instructed his subordinates, including Zhao [Subordinate] and Zhu [Subordinate], to illegally divert FOF fund assets in a cyclical manner, using them to provide off-exchange margin financing for others’ stock trading. The total misappropriated funds exceeded RMB 1.8 billion, from which guarantee deposits and interest on financing were collected.
From August to December 2018, Zhao colluded with Ruan (who was separately prosecuted), a shareholder of Company B Group Co., Ltd. (hereinafter referred to as “Company B”), to manipulate Company B’s stock under the pretext of “market value management”, executing the following schemes:1) Pumping stock prices using private equity fund accounts while simultaneously buying with personal accounts.2) Selling personal holdings at peak prices while private equity funds absorbed the shares.3) Profiting RMB 125 million in total, while causing FOF fund losses exceeding RMB 500 million.
Additionally, Zhao used RMB 1.32 billion obtained from margin financing to purchase Company B’s over-the-counter call options and exercised them for a profit of RMB 125 million after manipulating the market.
According to the China Securities Regulatory Commission (CSRC), from July to December 2018, Zhao controlled over 30% of Company B’s circulating shares and accounted for more than 50% of total trading volume for 20 consecutive days. Furthermore, Zhao and others were also implicated in bribery and commercial bribery offenses involving non-state personnel.
Procuratorial Review Process
Indictment Review
In September 2019, the Shandong Provincial Public Security Department transferred the case for prosecution on charges of market manipulation and embezzlement, and the procuratorial authorities designated the Qingdao Municipal People’s Procuratorate for jurisdiction.
Zhao defended that Company A was aware of the transactions, that the fund usage complied with private equity investment regulations, and that his actions did not constitute a crime. The procuratorial authorities returned the case to the public security department for supplementary investigation, requesting:1) Verification of the private equity fund management agreement to confirm whether Zhao unlawfully controlled the fund and made unauthorized investments.2) Determination of whether Company A had prior knowledge, including obtaining business decision-making records and witness testimonies.3) Tracing the flow of margin financing funds to confirm whether they were used for market manipulation and illicit profits.4) Analyzing the relationship between private equity fund accounts and Zhao’s personal accounts to verify whether the fund absorbed Zhao’s personal stock holdings at peak prices.
After supplementary investigation, the procuratorial authorities concluded:1) Zhao illegally controlled the fund and manipulated the market using margin financing funds.2) Zhao sold personal stock holdings at high prices, with the fund absorbing the shares, resulting in illegal profits and amplified losses.3) The over-the-counter options transactions were an extension of market manipulation, and the profits derived from them constituted illegal gains from securities market manipulation.
In May 2020, the procuratorial authorities formally prosecuted Zhao on charges of securities market manipulation, embezzlement, and other related offenses.
Trial and Verdict
Court Proceedings
Between November 2020 and May 2021, the Qingdao Intermediate People’s Court held multiple public hearings. The defense contested two major issues:1) Profits from the call option trades were not illegal gains and should not be confiscated.2) Zhao’s actions should be classified as “serious” rather than “particularly serious” under the law.
The prosecution rebutted:
1) The funds used to purchase over-the-counter (OTC) options originated from margin financing proceeds. Zhao profited by exercising the options through market manipulation. Since the funds did not enter the fund accounts, they constitute personal illegal gains, which shall be confiscated in accordance with the law.2) The determination of “particularly serious circumstances” applies the 2019 judicial interpretation, under which Zhao’s securities market manipulation meets the specified criteria.Verdict and Sentencing
Decision
On May 25, 2021, the Qingdao Intermediate People’s Court delivered its first-instance judgment:1) Zhao Moumou: convicted of securities market manipulation and embezzlement.Sentenced to 17 years in prison, fined RMB 60.4 million, and ordered to forfeit RMB 2.5 billion in illegal gains.2) Zhu Mou, Zhao Moujia, and Jin Mou: sentenced to prison terms ranging from 3 to 8 years, fined varying amounts.
On December 20, 2021, the Shandong Provincial High Court upheld the original verdict on appeal.
Case Impact
1) Severe Punishment for Manipulating the Securities Market Using Private Equity Funds:a. Comprehensively track fund flows to verify whether private equity funds have been unlawfully controlled and whether funds have been used for market manipulation.b. Illegal use of private equity fund assets, artificially inflating stock prices, and forcing the fund to absorb shares at peak prices should be collectively recognized as criminal acts.c. Misappropriating fund assets for market manipulation shall be punished under multiple offenses in accordance with the law.2) Criteria for Determining “Particularly Serious Circumstances”: The 2010 prosecution standards apply to the threshold for criminal liability based on trading metrics, but the determination of “particularly serious circumstances” must follow the 2019 judicial interpretation; If the shareholding ratio or trading volume proportion in a securities market manipulation case meets the judicial interpretation’s standards, the case shall be classified as particularly serious.3) Confiscation of Profits from Over-the-Counter (OTC) Options Trading: OTC options trading does not constitute the crime of futures market manipulation, but if used in conjunction with securities market manipulation, the resulting profits shall be deemed illegal gains from securities market manipulation and confiscated in accordance with the law.
This case strengthens judicial enforcement against private equity fund misconduct, embezzlement, and securities market manipulation, enhances fund tracking and cross-market regulatory mechanisms, and serves as a crucial warning for ensuring compliance in the securities market.
[Comment] The release of this batch of guiding cases not only strengthens the comprehensive crackdown on securities-related crimes but also provides crucial legal guidance for securities market regulation, corporate compliance management, and public investment decisions. These cases cover various securities violations, including fraudulent issuance, illegal information disclosure, insider trading, and market manipulation. Through detailed case analysis, they clarify the applicable legal standards, evidentiary requirements, and judicial handling principles.
From the case trials and verdicts, it is evident that judicial authorities adhere to a strict law enforcement approach in securities crime cases, following the principles of severe punishment in accordance with the law, precise crime determination, and comprehensive tracing of illegal gains. This approach not only imposes legal sanctions on offending companies and individuals but also promotes improvements in industry regulatory mechanisms. To address loopholes in audit firms, private equity fund management, and financial disclosure by listed companies, the procuratorial authorities have issued prosecutorial recommendations and driven industry reforms, contributing to the development of a more robust capital market governance framework.
In the future, as the capital market continues to expand rapidly and financial products evolve, securities-related crimes are likely to become more covert and sophisticated. Therefore, judicial authorities, regulatory agencies, and market participants must enhance collaboration, continuously refine legal frameworks and regulatory mechanisms, increase market transparency, maintain fair competition, and effectively protect investors’ legitimate rights and interests, thereby fostering a healthy, stable, and high-quality development of the capital market.
This release not only represents an authoritative interpretation of the applicable laws by judicial authorities but also provides clearer legal guidance for enterprises and the public, helping to enhance society’s understanding and application of legal practices. Below is an introduction to the basic facts, review process, case handling results, and guiding significance of these cases.
Case Ⅰ: Fraudulent Issuance of Bonds by Jia Leather Co., Ltd., Zhou Moumou, and Others & Major Falsehoods in Certified Documents by Ma Mou (Guiding Case No. 219)
Basic Facts
Jiangsu Suqian Jia Leather Co., Ltd. (hereinafter referred to as “Jia Company”) planned to raise funds through the issuance of private bonds for small and medium-sized enterprises under the decision of its legal representative, controlling shareholder, and executive director Zhou Moumou. As the audit firm lacked securities-related audit qualifications, Wang Moumou (a partner at Yi Accounting Firm) contacted Ma Mou (the person in charge of Bing Beijing Firm), a firm with qualified credentials, to be responsible for issuing the final audit report.
During the audit process, Wang Moumou discovered that Jia Company’s actual financial status did not meet the requirements for bond issuance. Therefore, he suggested falsifying financial data to meet the financing needs. With Zhou Moumou’s approval, General Manager and Chief Financial Officer Lin Moumou, along with Finance Manager Ye Moumou, provided false financial information, tampered with financial statements, and forged tax declarations. Based on these false records, Wang Moumou created fraudulent audit working papers and further fabricated financial documents, inflating Jia Company’s 2010 and 2011 operating revenue by more than RMB 677 million and net profit by over RMB 104 million.
As the final reviewing accountant, Ma Mou seriously neglected his duties by failing to verify the false financial data. He directly signed the audit report and instructed others to stamp the report with the seals of certified accountants who did not participate in the audit, ultimately issuing a seriously false audit report in the name of Bing Beijing Firm. Wang Moumou paid RMB 90,000 to Bing Beijing Firm for the audit.
Subsequently, Jia Company appointed Ding Securities Company as its underwriter, and based on the fraudulent audit report, prepared a prospectus that further exaggerated the company’s financial data, inflating operating revenue by RMB 1.057 billion and net profit by RMB 145 million. Zhou Moumou, Lin Moumou, and Ye Moumou signed the prospectus in confirmation. On February 5, 2013, Ding Securities Company successfully filed the prospectus with the Shenzhen Stock Exchange and issued the “Jia Company 2012 Private Bond for SMEs”, raising RMB 1.5 billion. However, when the bond matured in 2015, Jia Company was unable to repay the principal and outstanding interest, causing significant economic losses to investors.
Procuratorial Review Process
Arrest Review
On November 10, 2017, the Shanghai Public Security Bureau requested the approval of arrest for Lin Moumou and Ye Moumou on suspicion of fraudulent bond issuance. The procuratorial authority approved the arrests on November 17, 2017, and requested further investigation on the following key aspects:1) Determine whether Zhou Moumou was the organizer of the fraudulent bond issuance;2) Clarify the division of responsibilities among personnel in Jia Company during the bond issuance process;3) Investigate Wang Moumou and Ma Mou to ascertain whether they were guilty of fraudulent bond issuance, providing false certification documents, or issuing a materially false certification document;4) Supplement relevant documentation concerning Jia Company’s bond issuance.
On March 6, 2019, the public security authority filed a case against Ma Mou based on the procuratorial authority’s instructions. Zhou Moumou had fled due to involvement in other crimes but was later apprehended by the Jiangsu police. On March 2, 2020, he was sentenced to eight years in prison for other crimes and was later transferred back for further investigation.
Indictment Review
From 2018 to 2020, the public security authority successively transferred prosecution materials to the procuratorial authority, charging:
1) Jia Company, Lin Moumou, Ye Moumou, and Wang Moumou with fraudulent issuance of bonds;2) Ma Mou with issuing a materially false certification document;3) Zhou Moumou with fraudulent issuance of bonds.
The procuratorial authority determined:
1) Wang Moumou knowingly assisted Jia Company in financial fraud, actively using his professional expertise throughout the process, constituting joint liability for fraudulent bond issuance;2) Ma Mou, while not directly involved in falsification, seriously neglected his auditing responsibilities, constituting issuing a materially false certification document.
From 2018 to 2021, the procuratorial authority successively filed public prosecutions in court.
Prosecution and Trial
From 2018 to 2021, multiple public trials were conducted in court. During the trial, the defense raised the following arguments:
1) Private bonds for SMEs do not fall within the scope of fraudulent bond issuance crime. The defense argued that this crime, stipulated in the 1997 Criminal Law, was only applicable to publicly issued bonds, whereas Jia Company’s bonds were privately issued to qualified investors and thus should not fall under the crime. Prosecution’s rebuttal is that private bonds for SMEs still qualify as “corporate bonds” under the law, making them subject to fraudulent issuance provisions.2) Wang Moumou should be exempt from criminal liability. The defense claimed that Wang Moumou was only a third-party accountant, gained little profit, and that his offense was minor. Prosecution argue that accountants play a crucial “gatekeeping” role in bond issuance. Wang Moumou not only failed in his audit responsibilities but also actively participated in fraud, making criminal liability unavoidable.
Decision
On February 22, 2019, September 29, 2020, and June 30, 2021, the court ruled: 1) Jia Company: Guilty of fraudulent bond issuance, fined RMB 4.5 million;2) Zhou Moumou: Sentenced to 4 years and 6 months for fraudulent bond issuance, combined with previous crimes, final sentence: 11 years imprisonment and a fine of RMB 340,000;3) Lin Moumou, Wang Moumou, and Ye Moumou: Sentenced to prison terms ranging from 3 years to 1.5 years, some with suspended sentences, fined;4) Ma Mou: Convicted of issuing a materially false certification document, sentenced to imprisonment and fined.
Wang Moumou and Zhou Moumou appealed, but the second-instance court upheld the original verdict.Case Impact
The prosecutorial authorities discovered severe internal control loopholes in accounting firms’ audits of private placement bonds. Consequently, they submitted the following rectification recommendations to the Chinese Institute of Certified Public Accountants (CICPA):1) Strengthen legal and professional ethics training to enhance accountants’ compliance awareness.2) Improve the full-process risk control system to prevent audits from becoming a mere formality.3) Reinforce industry regulation to prevent similar cases from occurring.The CICPA has attached great importance to these issues, formulating ten rectification measures and launching a special rectification campaign to enhance industry governance standards.Guiding Significance1) Clarifying the Scope of Application for the Crime of Fraudulent Bond Issuance: As modern financial products continue to evolve, the law should be applicable to new types of bonds, such as small and medium-sized enterprise (SME) private placement bonds and short-term financing bonds, to safeguard investors’ rights and interests.2) Legal Accountability for Intermediary Personnel: It is necessary to distinguish whether intermediary personnel intentionally engaged in fraud or caused severe consequences due to gross negligence, and accordingly apply either the crime of fraudulent bond issuance or the crime of issuing false certification documents.3) Strengthening Financial Supervision to Mitigate Capital Market Risks: By handling individual cases, regulatory authorities can drive industry-wide rectification, promote the healthy development of the sector, and enhance financial market transparency.This case not only serves as legal punishment for the involved enterprises and individuals but also advances industry governance in the capital market. It provides valuable insights for regulating the practices of intermediary institutions and protecting investors’ interests.
Case II: Wu Moumou and Others’ Violation of Important Information Disclosure Regulations (Guiding Case No. 220)
Basic Facts
Jia Group Co., Ltd. (hereinafter referred to as “Jia Company”) is a publicly listed company on the Shenzhen Stock Exchange. In 2016, due to two consecutive years of financial losses, the company faced the risk of delisting. At this time, Wu Moumou, the then chairman, instructed Chief Financial Officer (CFO) Gou Mou and others to falsify financial data to artificially inflate profits. The specific fraudulent methods included:1) Reducing costs: Adjusting the harvesting area of farmed scallops, reducing it from 694,100 mu to 554,800 mu, thereby understating operating costs by over RMB 60 million.2) Reducing expenses: Failing to write off scallops that had ceased to exist, reducing non-operating expenses by over RMB 70 million.3) Inflating profits: As a result, in its 2016 annual report, Jia Company overstated profits by more than RMB 130 million, accounting for 158.11% of the disclosed total profit.
Between late 2017 and early 2018, in an attempt to offset the previously inflated profits while replanting scallops in undisclosed harvesting areas, Wu Moumou and others again falsified financial data:1) Increasing costs: Adjusting the actual harvesting area from 549,100 mu to 607,000 mu, inflating operating costs by over RMB 60 million.2) Fabricating write-offs: Using false sampling data and fabricated scallop mortality reports, they overstated non-operating expenses and asset impairment losses by more than RMB 210 million.3) Reducing profits: Consequently, in Jia Company’s 2017 annual report, they understated profits by RMB 270 million, accounting for 38.57% of the disclosed total profit.
Additionally, Wu Moumou and others were found guilty of fraud, collusive bidding, bribery, and commercial bribery.
Procuratorial Review Process
Arrest Review
Between April and July 2021, the Dalian Public Security Bureau successively requested arrest approval for Wu Moumou, Gou Mou, and others. The procuratorial authority determined that the key issue in confirming financial fraud was verifying the authenticity of the harvesting area data. The China Securities Regulatory Commission (CSRC) provided Beidou satellite navigation data and real trajectory records of harvesting vessels, confirming that Jia Company had fabricated and falsely disclosed the harvesting area, catch costs, and operating profits. Accordingly, the procuratorial authority approved the arrests.
However, as Wu Moumou and others denied wrongdoing and destroyed evidence, the procuratorial authority instructed the police to collect additional evidence, including:1) Verifying the reliability of the Beidou satellite navigation data to ensure its admissibility as evidence.2) Comparing Jia Company’s financial records with the navigation data and fuel subsidy claims to confirm the extent of financial falsification.3) Reconstructing accurate financial data and quantifying the fraudulent profit amounts.4) Determining the responsibility of senior management, including whether Wu Moumou and Sun Moumou acted with criminal intent.
Indictment Review
On August 31, 2021, after gathering additional evidence, the public security authorities transferred Wu Moumou and others to the procuratorial authority for prosecution. On January 20, 2022, the procuratorial authority indicted Wu Moumou, Gou Mou, Liang Mou, and others for violating important information disclosure regulations. Some individuals with minor offenses were not prosecuted.
Trial and Verdict
Court Proceedings
On March 31, 2022, the Dalian Intermediate People’s Court held a public trial for this case. The defense challenged the prosecution by arguing:1) Wu Moumou did not engage in financial fraud or violate disclosure regulations.2) The big data analysis report should not be considered valid evidence.3) Liang Mou was unaware of financial falsification before public disclosure.
In response, the prosecution provided key evidence, including:1) Beidou satellite navigation data and reconstructed harvesting area maps, corroborated by fuel subsidy records to prove financial fraud.2) Audit reports reconstructing Jia Company’s actual financial performance and comparing it with publicly disclosed data to quantify fraudulent profits.3) Internal company documents, board resolutions, and witness testimonies, proving that Wu Moumou knowingly orchestrated the financial falsification and signed off on fraudulent financial reports.
Verdict and Sentencing
On October 31, 2022, the court delivered its first-instance verdict:1) Wu Moumou: Guilty of violating important information disclosure regulations, sentenced to 2 years and 6 months in prison, fined RMB 200,000; combined with previous convictions, the final sentence was 15 years imprisonment and a total fine of RMB 920,000.2) Gou Mou, Liang Mou, and others: Sentenced to prison terms ranging from 1 year and 7 months to 1 year and 10 months, with some receiving suspended sentences and fines.
On May 25, 2023, the higher court upheld the original verdict.
Impact and Regulatory Recommendations
During case handling, the procuratorial authority identified widespread financial fraud methods used by listed companies and issued the following recommendations:1) Strengthening financial fraud investigations: Addressing “inflating profits first, then offsetting losses” schemes by reconstructing financial data using audit techniques and technology.2) Enhancing utilization of regulatory agency evidence: Leveraging electronic data and financial records from the CSRC as key criminal evidence.3) Categorized prosecution of financial fraud perpetrators: Primary offenders (CEOs, CFOs, senior executives) should be held strictly accountable; Mid-level managers directly involved in financial fraud should be appropriately penalized; Lower-level employees following orders with minor involvement may receive leniency.
This case reinforced market integrity standards, emphasizing that listed companies must comply with financial disclosure laws to prevent investor losses and market disruptions.
Case III: Jiang Moumou Insider Trading Case (Guiding Case No. 221)
Basic Facts
Jiang Moumou was an employee of Yi Capital Management Co., Ltd. (hereinafter referred to as “Yi Company”), a subsidiary of Jia Holding Group Co., Ltd. (hereinafter referred to as “Jia Company”). In April 2018, Jia Company faced a debt crisis after failing to raise RMB 22 billion through short-term financing bonds. On April 24, at 11:00 AM, the first bond issuance attempt failed. Later that day, Jia Company announced the cancellation of the issuance, which triggered market concerns over its financial situation. That evening, Jia Company’s Chairman Yao Moumou convened a meeting with senior executives to discuss response measures, and Jiang Moumou was invited to attend. The meeting required all participants to maintain confidentiality regarding the information. On April 25, Jiang Moumou liquidated all of his holdings in Bing Environmental Co., Ltd. (hereinafter referred to as “Bing Company”), a publicly listed company controlled by Jia Company, selling 1.25 million shares for RMB 8.15 million. After the incident was exposed, the Shenzhen Stock Exchange calculated that Jiang Moumou avoided a loss of RMB 3.36 million. On May 2, 2018, Bing Company disclosed a public announcement stating that Jia Company was experiencing significant financial uncertainty, which could materially impact Bing Company. Consequently, Bing Company’s stock was suspended from trading on that date. On May 4, Bing Company further disclosed that if Jia Company failed to resolve its debt crisis, it might lose control over Bing Company. Upon resumption of trading, Bing Company’s stock hit the daily limit down for four consecutive trading days, and on the fifth trading day, the stock dropped by 8.59%, with a total decline of 48.59%.
In June 2020, the Xiamen Bureau of the China Securities Regulatory Commission (CSRC) imposed an administrative penalty, concluding that Jia Company’s debt crisis constituted insider information and that Jiang Moumou was an insider. The CSRC ordered the confiscation of his RMB 3.36 million in illegal gains and imposed an additional fine. Jiang Moumou paid both the fine and the confiscated amount. On June 28, 2021, Jiang Moumou voluntarily surrendered to law enforcement and confessed to the crime of insider trading.
Procuratorial Review Process
Indictment Review
On November 22, 2021, the Hangzhou Public Security Bureau referred Jiang Moumou for prosecution on insider trading charges to the Hangzhou Municipal Procuratorate. During the review, the procuratorial authority identified two key legal issues requiring further investigation:1) Jiang Moumou was not a senior executive of Jia Company, and Yi Company was not responsible for Jia Company’s bond issuance. However, he still attended the high-level meeting where insider information was disclosed. This raised doubts about whether he qualified as an insider.2) The calculation method for avoided losses required further verification to ensure accuracy. Shenzhen Stock Exchange data confirmed that the avoided loss was calculated using the closing price on the day the limit down was broken. This method was deemed reasonable and valid.
On July 2, 2022, the Hangzhou Municipal Procuratorate filed a public indictment, charging Jiang Moumou with insider trading.
Trial and Verdict
On November 17, 2022, the Hangzhou Intermediate People’s Court held a public trial. Jiang Moumou pleaded guilty to the charges and did not dispute the facts or legal accusations. However, his defense team argued for leniency, stating:1) The 2019 revision of the Securities Law removed the “catch-all clause” that previously allowed securities regulators to subjectively identify additional categories of insider information. The debt crisis was not explicitly listed as insider information under the 2019 Securities Law.2) Jia Company had already disclosed the bond issuance failure on Shanghai Clearing House and ChinaMoney.com, which should be considered public information.
In response, the prosecution argued:1) The lack of an explicit listing does not negate the classification of insider information.2) Jia Company’s debt crisis posed a significant risk to Bing Company’s control structure, which directly impacted its stock price, meeting the criteria for insider information.3) The prior announcements on financial websites did not fully disclose the severity of the crisis or the potential loss of control over Bing Company. Furthermore, these platforms did not meet the regulatory standards for public disclosure under the Securities Law.
Verdict and SentencingOn December 29, 2022, the court issued its verdict: Jiang Moumou was convicted of insider trading, with particularly serious circumstances; Given his self-surrender, full return of illegal gains, and payment of administrative fines, the court reduced his sentence, sentenced to 3 years in prison, with a 5-year suspended sentence and fined RMB 8 million. Jiang Moumou did not appeal, and the verdict became final.
Case Impact
1) Determination of Inside Information Should Consider Market Impact. The definition of inside information is not limited to the items enumerated in the Securities Law but should be based on whether the information influences investors’ decision-making. The risk of a change in the controlling interest of a listed company may constitute inside information. Even if part of the information is disclosed, it will still be considered non-public unless it is fully and accurately released on a platform recognized by the Securities Law.2) Scope of Insiders Should Be Determined Holistically. Individuals who are not explicitly listed in the Securities Law but obtain inside information through their position, family ties, or business relationships can still be legally recognized as insiders. In this case, although Jiang was not an executive of Company A, he was entrusted with handling the group’s debt issues, qualifying him as an insider.3) Calculation of Illegal Gains from Defensive Insider Trading. The calculation of illegal gains from insider trading should be based on the point at which the market has fully absorbed the disclosed information. In this case, the closing price on the day the stock price limit-down was lifted was used as the benchmark to ensure the reasonable and fair calculation of avoided losses. Furthermore, this case reinforces regulatory oversight of insider trading in the capital market, clarifies the criteria for identifying insiders and calculating illegal gains, and serves as a crucial warning for maintaining market integrity.
Case IV: Zhao Moumou and Others Manipulating the Securities Market (Guiding Case No. 222)
Basic Facts
Zhao Moumou, Zhao, Former Deputy General Manager of the Asset Management Department at Company A Futures Co., Ltd. (hereinafter referred to as “Company A”), Exploited His Position to illegally Control FOF Fund Assets, Committing Crimes of Embezzlement and Market Manipulation
From 2016 to 2018, Company A issued five phases of FOF (Fund of Funds) products, raising a total of RMB 1.086 billion, which was invested in nine private equity funds amounting to RMB 936 million. Zhao, leveraging his position, unlawfully transferred fund management authority, gaining control over fund operations.
Between late 2017 and August 2018, Zhao instructed his subordinates, including Zhao [Subordinate] and Zhu [Subordinate], to illegally divert FOF fund assets in a cyclical manner, using them to provide off-exchange margin financing for others’ stock trading. The total misappropriated funds exceeded RMB 1.8 billion, from which guarantee deposits and interest on financing were collected.
From August to December 2018, Zhao colluded with Ruan (who was separately prosecuted), a shareholder of Company B Group Co., Ltd. (hereinafter referred to as “Company B”), to manipulate Company B’s stock under the pretext of “market value management”, executing the following schemes:1) Pumping stock prices using private equity fund accounts while simultaneously buying with personal accounts.2) Selling personal holdings at peak prices while private equity funds absorbed the shares.3) Profiting RMB 125 million in total, while causing FOF fund losses exceeding RMB 500 million.
Additionally, Zhao used RMB 1.32 billion obtained from margin financing to purchase Company B’s over-the-counter call options and exercised them for a profit of RMB 125 million after manipulating the market.
According to the China Securities Regulatory Commission (CSRC), from July to December 2018, Zhao controlled over 30% of Company B’s circulating shares and accounted for more than 50% of total trading volume for 20 consecutive days. Furthermore, Zhao and others were also implicated in bribery and commercial bribery offenses involving non-state personnel.
Procuratorial Review Process
Indictment Review
In September 2019, the Shandong Provincial Public Security Department transferred the case for prosecution on charges of market manipulation and embezzlement, and the procuratorial authorities designated the Qingdao Municipal People’s Procuratorate for jurisdiction.
Zhao defended that Company A was aware of the transactions, that the fund usage complied with private equity investment regulations, and that his actions did not constitute a crime. The procuratorial authorities returned the case to the public security department for supplementary investigation, requesting:1) Verification of the private equity fund management agreement to confirm whether Zhao unlawfully controlled the fund and made unauthorized investments.2) Determination of whether Company A had prior knowledge, including obtaining business decision-making records and witness testimonies.3) Tracing the flow of margin financing funds to confirm whether they were used for market manipulation and illicit profits.4) Analyzing the relationship between private equity fund accounts and Zhao’s personal accounts to verify whether the fund absorbed Zhao’s personal stock holdings at peak prices.
After supplementary investigation, the procuratorial authorities concluded:1) Zhao illegally controlled the fund and manipulated the market using margin financing funds.2) Zhao sold personal stock holdings at high prices, with the fund absorbing the shares, resulting in illegal profits and amplified losses.3) The over-the-counter options transactions were an extension of market manipulation, and the profits derived from them constituted illegal gains from securities market manipulation.
In May 2020, the procuratorial authorities formally prosecuted Zhao on charges of securities market manipulation, embezzlement, and other related offenses.
Trial and Verdict
Court Proceedings
Between November 2020 and May 2021, the Qingdao Intermediate People’s Court held multiple public hearings. The defense contested two major issues:1) Profits from the call option trades were not illegal gains and should not be confiscated.2) Zhao’s actions should be classified as “serious” rather than “particularly serious” under the law.
The prosecution rebutted:
1) The funds used to purchase over-the-counter (OTC) options originated from margin financing proceeds. Zhao profited by exercising the options through market manipulation. Since the funds did not enter the fund accounts, they constitute personal illegal gains, which shall be confiscated in accordance with the law.2) The determination of “particularly serious circumstances” applies the 2019 judicial interpretation, under which Zhao’s securities market manipulation meets the specified criteria.Verdict and Sentencing
Decision
On May 25, 2021, the Qingdao Intermediate People’s Court delivered its first-instance judgment:1) Zhao Moumou: convicted of securities market manipulation and embezzlement.Sentenced to 17 years in prison, fined RMB 60.4 million, and ordered to forfeit RMB 2.5 billion in illegal gains.2) Zhu Mou, Zhao Moujia, and Jin Mou: sentenced to prison terms ranging from 3 to 8 years, fined varying amounts.
On December 20, 2021, the Shandong Provincial High Court upheld the original verdict on appeal.
Case Impact
1) Severe Punishment for Manipulating the Securities Market Using Private Equity Funds:a. Comprehensively track fund flows to verify whether private equity funds have been unlawfully controlled and whether funds have been used for market manipulation.b. Illegal use of private equity fund assets, artificially inflating stock prices, and forcing the fund to absorb shares at peak prices should be collectively recognized as criminal acts.c. Misappropriating fund assets for market manipulation shall be punished under multiple offenses in accordance with the law.2) Criteria for Determining “Particularly Serious Circumstances”: The 2010 prosecution standards apply to the threshold for criminal liability based on trading metrics, but the determination of “particularly serious circumstances” must follow the 2019 judicial interpretation; If the shareholding ratio or trading volume proportion in a securities market manipulation case meets the judicial interpretation’s standards, the case shall be classified as particularly serious.3) Confiscation of Profits from Over-the-Counter (OTC) Options Trading: OTC options trading does not constitute the crime of futures market manipulation, but if used in conjunction with securities market manipulation, the resulting profits shall be deemed illegal gains from securities market manipulation and confiscated in accordance with the law.
This case strengthens judicial enforcement against private equity fund misconduct, embezzlement, and securities market manipulation, enhances fund tracking and cross-market regulatory mechanisms, and serves as a crucial warning for ensuring compliance in the securities market.
[Comment] The release of this batch of guiding cases not only strengthens the comprehensive crackdown on securities-related crimes but also provides crucial legal guidance for securities market regulation, corporate compliance management, and public investment decisions. These cases cover various securities violations, including fraudulent issuance, illegal information disclosure, insider trading, and market manipulation. Through detailed case analysis, they clarify the applicable legal standards, evidentiary requirements, and judicial handling principles.
From the case trials and verdicts, it is evident that judicial authorities adhere to a strict law enforcement approach in securities crime cases, following the principles of severe punishment in accordance with the law, precise crime determination, and comprehensive tracing of illegal gains. This approach not only imposes legal sanctions on offending companies and individuals but also promotes improvements in industry regulatory mechanisms. To address loopholes in audit firms, private equity fund management, and financial disclosure by listed companies, the procuratorial authorities have issued prosecutorial recommendations and driven industry reforms, contributing to the development of a more robust capital market governance framework.
In the future, as the capital market continues to expand rapidly and financial products evolve, securities-related crimes are likely to become more covert and sophisticated. Therefore, judicial authorities, regulatory agencies, and market participants must enhance collaboration, continuously refine legal frameworks and regulatory mechanisms, increase market transparency, maintain fair competition, and effectively protect investors’ legitimate rights and interests, thereby fostering a healthy, stable, and high-quality development of the capital market.