Fines and Confiscations Exceed 1.1 Billion Yuan! Regulators Crack Down Hard on Market Manipulation

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Since the beginning of this year, the securities regulatory system has issued fines for multiple market manipulation cases, with total penalties exceeding 1.1 billion yuan. The maximum penalties have become the norm, signaling a clear message of zero tolerance and strict regulation.

Professor Tian Lihui from Nankai University’s Finance Department stated that the increase in the number and severity of market manipulation fines is a result of strengthened regulatory efforts, improved enforcement technology,完善法律法规, and enhanced investor protection awareness. The application of advanced technological means has increased regulators’ ability to combat market manipulation, and ongoing revisions and improvements to laws and regulations have intensified penalties for illegal market manipulation, helping to raise the cost of violations and create effective deterrence.

Multiple Fines Issued in Quick Succession

Recently, the China Securities Regulatory Commission (CSRC) announced two administrative penalty decisions related to market manipulation violations, both involving “one fine plus double penalties,” with fines of 37.62 million yuan and 38.63 million yuan respectively.

The subjects involved in these cases are individuals. According to the CSRC investigation, from June 27 to November 30, 2022, Peng Shaodong controlled nine securities accounts, influencing stock prices through price-raising, false declarations, and sealing limit-ups, illegally earning approximately 12.54 million yuan; from August 17 to November 4, 2022, Wang Zheng controlled seven securities accounts, using similar methods to influence stock prices, illegally earning about 12.88 million yuan.

In response to regulatory penalties, Peng Shaodong and Wang Zheng presented three common defenses: first, they did not control the relevant accounts, so the illegal gains should be deducted; second, their trading activities were normal investment transactions without subjective intent to manipulate; third, the penalties were excessive. They requested reductions or exemptions from punishment.

After review, the CSRC determined that the individuals created a false appearance of market activity by raising stock prices to attract other investors, then profited from reverse trades, demonstrating intent to manipulate. Considering the facts, nature, circumstances, and market harm, the CSRC confiscated Peng Shaodong’s illegal gains of about 12.54 million yuan and imposed a fine of approximately 25.08 million yuan, totaling about 37.62 million yuan; confiscated Wang Zheng’s illegal gains of about 12.88 million yuan and fined approximately 25.75 million yuan, totaling about 38.63 million yuan.

Prior to the Peng Shaodong and Wang Zheng cases, the CSRC issued its first fine in January 2026, also related to stock price manipulation. Investigations revealed that over more than five years, individual Yu Han used concentrated funds and shareholding advantages to control 67 accounts, manipulating the stock price of Dr. Eye Glasses and illegally profiting about 510 million yuan. The CSRC imposed a “no one fine, one penalty” approach, totaling about 1.02 billion yuan in fines and confiscations. Additionally, Yu Han was barred from securities markets for three years and prohibited from trading securities for three years, implementing a dual ban on identity and trading.

Beyond the CSRC, local securities regulatory bureaus also punish manipulation cases. For example, Jin Yongrong, a prominent influencer on Snowball, manipulated the market through “hats” trading, with Zhejiang Securities Regulatory Bureau fining and confiscating about 83.25 million yuan and imposing a three-year market ban. The exchanges focus on abnormal trading monitoring, key stock surveillance, and tip reporting, swiftly addressing early signs of manipulation such as price-raising, suppressing, false declarations, and other abnormal behaviors. Over the past week alone, they took regulatory actions against more than 200 cases of abnormal trading, including price manipulation and false declarations, mainly targeting ST, *ST, and stocks with abnormal volatility.

Continuous Innovation in Manipulation Tactics

From the cases investigated, it is evident that manipulation methods are constantly evolving, characterized by multi-account operations, long-term control, covert techniques, and information coordination, coexisting with traditional short-term manipulation such as rapid intra-day price swings, false declarations, and sealing limit-ups.

For example, the “Jin Yongrong” case shows a new trend toward “information coordination,” with channels more diverse than traditional “hats” manipulation. Influencers leverage multiple social media platforms to expand influence, using real trading competitions and live broadcasts to share stock-picking logic, increasing credibility and audience engagement. Unlike traditional methods, this type of illegal activity is more covert and complex, increasing regulatory difficulty. Similarly, the “Yu Han” case involved controlling multiple accounts to coordinate trading of Dr. Eye Glasses, with manipulation spanning multiple years and crossing market cycles, evading detection over a five-year period.

Market manipulation patterns are continually being refined, and regulatory technology is also advancing. For covert illegal activities, authorities employ comprehensive monitoring, big data analysis, multi-channel information collection, and intelligent analysis to build a “penetrating” clue detection system, enabling precise identification and strict enforcement.

“Market manipulation through artificial control distorts stock prices, causing sharp rises and falls, misleading investors’ trading decisions, and leading to heavy losses for investors after profits are taken,” industry insiders said. In terms of detection and enforcement, regulators have shifted from monitoring individual stocks to cross-stock and cross-market coordinated surveillance, effectively addressing multi-stock manipulation. High-frequency trading monitoring systems also enable real-time detection of false declarations and other manipulative behaviors.

Increased Enforcement

Market expectations are that regulators will continue to focus on “cracking down on big, bad, and key” cases, targeting issues most concerning to investors and deep reforms in the capital market. They will intensify efforts to punish illegal activities including market manipulation, insider trading, false statements, and financial fraud.

Recently, the CSRC announced its 2026 reform plan, emphasizing strengthening enforcement, cracking down on financial fraud, market manipulation, insider trading, and false disclosures, and continuously improving investor protection systems to enhance enforcement effectiveness and deterrence.

“It is necessary to further improve enforcement effectiveness and uphold a ‘zero tolerance’ stance,” said Tian Lihui. First, through rule of law, accelerate the issuance of judicial interpretations on civil compensation for market manipulation and insider trading to increase penalties; second, leverage technology, deepen AI-driven penetrating supervision, and improve detection and response speed; third, coordinate efforts across administrative, civil, and criminal accountability, and strengthen enforcement cooperation.

Tian Lihui also advised investors to be cautious of stocks with long-term large deviations from the market, fluctuating volumes, and lacking fundamental support. Investors should abandon speculative mindsets of chasing gains and selling in panic, focusing instead on a company’s core competitiveness and long-term value to avoid becoming a “bagholder” in market manipulation.

This article was originally published in Securities Times, March 17, on page A2, titled “Regulators Take Strong Action Against Market Manipulation, Fines and Penalties Exceed 1.1 Billion Yuan This Year”

Disclaimer: All information from Data Treasure does not constitute investment advice. The stock market involves risks; invest cautiously.

Editor: Zhou Sha