China to raise violation fraud costs in capital market

BEIJING -- China will significantly raise the violation cost of financial fraud in the capital market and fully employ related regulations and policies to hold violators strictly accountable to their criminal responsibilities, an official with the Supreme People's Procuratorate (SPP) said on Friday.

Measures will include the application of property penalties, which will increase the economic punishments for criminals of financial fraud and better reflect the principle of suiting punishment to the crime, said SPP official Zheng Xinjian at a press conference. The press conference was held jointly with the China Securities Regulatory Commission (CSRC), the country's top securities watchdog.

Financial fraud in the capital market should be strictly prosecuted in a "full-chain" manner. That means not only should companies and enterprises that commit fraud be investigated and punished, but controlling shareholders and actual controllers who organize and direct fraudulent activities should also be investigated and punished, Zheng said.

At the same time, intermediary organizations that assist fraud should be investigated and punished to implement the requirement of "zero tolerance" for crimes in the capital market, the official said.

The CSRC said it would increase the efficiency of transferring criminal cases. It would also actively support and promote the introduction and revision of judicial interpretation and prosecution standards for criminal, civil, and administrative law enforcement and strengthen institutional support for capital market governance.