China Tightens Grip on Financial Fraud as Stock Markets Stumble

China's securities regulator, CSRC, is intensifying its efforts to combat financial fraud, seeking harsher punishments for lawbreakers to restore confidence in struggling stock markets. Recent guidelines aim for coordinated actions against fraud, including stiffer fines and imprisonment terms for fraudulent disclosures and false documentation.

SHANGHAI, July 5 (Reuters) - China’s securities regulator vowed on Friday to clamp down harder on financial fraud, as it seeks to revive confidence in the country’s struggling stock markets.

The China Securities Regulatory Commission (CSRC) and five other government agencies jointly published a set of guidelines aimed at capital markets cheating, their latest efforts to address a persistent problem afflicting the world’s second-largest stock market.

The statement promised comprehensive crackdowns on corporate fraudsters and their associates, amid ongoing investigations into PricewaterhouseCoopers (PwC), the auditor of China Evergrande Group, which was found cheating. “Financial fraud seriously disrupts capital market order and shakes investor confidence,” the CSRC stated.

Regulators will “go after chief evils”, “punish accomplices”, and employ coordinated and systemic efforts against fraud. The CSRC noted it is revising laws to impose harsher penalties, citing increased fines and longer imprisonment terms for dishonest disclosures.