China Regulator imposes record fines, without a clear effect

China’s securities regulator has handed out at least 2.37 billion yuan ($370 million) in penalties this month, five times the total for all of 2014.
The alleged offenders targeted by the China Securities Regulatory Commission include the nation’s largest securities companies, trading-technology firms, major shareholders of publicly traded companies, and institutional and individual investors. A 737 million yuan-penalty for alleged market manipulation by fund manager Qingdao Donghai Ever-Trusting Managing Ltd. set a record, exceeding the fine imposed in 2013 when Everbright Securities Co. roiled the nation’s equity markets, of 523 million yuan.
The CSRC is pledging a sustained crackdown as the government tries to restore confidence through state purchases of stock, restrictions on stake sales, a temporary ban on initial public offerings and efforts to squeeze out unofficial margin finance.
"These fines are part of the regulator’s measures to stabilize the stock market and clean up the industry," said Oliver Rui, a Shanghai-based finance professor at China Europe International Business School. "Things had gone out of control and the government’s market rescue efforts had yielded limited results. The regulator hopes to restore confidence in the market through these unusual measures." The CSRC didn’t respond to a request for comment.
Since the market crash in June, the Chinese authorities have targeted so-called “malicious” short sellers, probed Citic Securities Co. and some of its top executives for alleged insider trading, and orchestrated a televised confession by a business journalist, Wang Xiaolu, who said that one of his reports had caused “panic and disorder” in the market.
By the CSRC’s account, one individual, Yuan Hailin, was a double loser: Yuan was fined 3 million yuan after losing 278 million yuan through transactions that the regulator said were aimed at manipulating the prices of Suning Commerce Group Co. and Sichuan Languang Development Co.

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(source: Bloomberg)