A guideline, jointly released by the Supreme People's Court, the Supreme People's Procuratorate, the Ministry of Public Security, and the China Securities Regulatory Commission on May 17, emphasized zero tolerance for violations in the field of securities and futures, and urged for a harsh crackdown on related crimes in line with the law.
According to the guideline, regulatory authorities in the securities and futures sector must promptly refer cases suspected of criminal activities to public security agencies if criminal liability needs to be pursued according to the law. The public security agencies, upon receiving cases transferred by the regulatory authorities, should promptly file cases if they find criminal evidence that requires criminal liability.
The guideline emphasized the importance of collecting evidence thoroughly and promptly to uncover and prove illegal activities. It also highlighted the significance of gathering physical evidence, documentary evidence, electronic data, and other objective evidence.
It underscored the need to fully understand the severe harm that securities and futures crimes pose to financial management order and financial security, emphasizing the punitive and preventive functions of criminal penalties.
Individuals suspected or accused of crimes, such as providing false statements, obstructing investigations, refusing to return illegal gains, using illegal gains for illegal activities, making substantial illegal profits, repeatedly committing securities and futures crimes, leading to the delisting of listed companies, causing significant losses to investors, potentially triggering financial risks, seriously endangering financial security, or causing other severe social impacts or consequences, will generally not be eligible for relative non-prosecution, exemption from criminal punishment or probation, the guideline said.
It specified severe and swift prosecution of financial fraud, the misappropriation of listed company assets, insider trading, market manipulation, and securities fraud.
Individuals, such as securities issuers, controlling shareholders, actual controllers, directors, supervisors, senior managers, and financial practitioners involved in securities and futures illegal activities, should be punished severely according to the law, the guideline said.
It also said that intermediary organizations and financial institutions providing false documents and financial instruments for financial fraud, professional groups engaging in activities such as margin trading, stock operation, and stock recommendations for insider trading or market manipulation, as well as external individuals colluding with listed companies to drain company assets, shall be held criminally liable according to the law once they are found to have committed crimes.
