Chinanews.com, March 9th. The Supreme Law today held a series of interviews on interpretation of the 2021 National "Two Sessions" and "Supreme People's Court Work Report".
Liu Guixiang, a deputy ministerial full-time member of the Supreme Law Judicial Committee, emphasized in the interview that financial fraud is one of the “cancers” of the capital market. The most effective way to eliminate them is to increase the cost of illegal and criminal behaviors in the capital market and let those who do bad things. Paying a high price creates a deterrent effect of "cannot do bad things" and "dare not do bad things".
Talking about the Supreme Law's measures to maintain the integrity of the capital market, Liu Guixiang said that the building of integrity in the capital market has always been an issue that the Party Central Committee attaches great importance to.
On November 2, 2020, the Central Deep Reform Commission deliberated and approved the "Several Opinions on Strictly Cracking Down on Illegal Activities in the Securities Market in accordance with the Law", which carried out top-level design and specific arrangements for improving and perfecting the law enforcement and judicial work of the capital market, and released it again A signal to maintain "zero tolerance" for violations of laws and regulations in the capital market.
Liu Guixiang said that operating honestly in accordance with the law is the most basic rule of the capital market, and honesty and credibility are the basic principles that must be observed in securities issuance and trading activities.
Financial fraud is one of the "malignant tumors" of the capital market, which seriously damages the legitimate rights and interests of investors and seriously endangers market order. It must be removed resolutely, decisively, and in a timely manner.
The most effective way to eliminate these "cancers" is to increase the cost of illegal and criminal activities in the capital market, and make people who do bad things pay a high price, creating a deterrent effect of "bad things can't be done" and "dare to do bad things".
Liu Guixiang pointed out that objectively speaking, the cost of illegal crimes in the capital market was relatively low in the past, and there have been many vicious financial fraud cases such as Kangmei Pharmaceutical.
In response to the problem of low illegal costs, the Securities Law and Criminal Law have been revised accordingly.
The new securities law that was implemented on March 1 last year has significantly increased the cost of capital market violations, and significantly increased the penalties for fraudulent issuance, false statements, insider trading, market manipulation and other securities violations.
The "Criminal Law Amendment (11)" that was implemented on March 1 this year has substantially increased the sentence for crimes such as fraudulent stock issuance, and greatly increased the range of fines.
Liu Guixiang said that with the improvement of legislation, the cost of illegal and criminal activities such as financial fraud in the capital market has increased significantly, and a three-dimensional accountability system has been formed that connects administrative law enforcement, civil recovery, and criminal punishment. This is an inherent part of maintaining the integrity and order of the capital market. Requirements are also the price that counterfeiters must pay.