Fines and confiscations exceed 1.1 billion yuan! Regulatory authorities take strong action against market manipulation.

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. Heavy penalties have become the norm, sending a clear signal of zero tolerance and strict regulation.

Professor Tian Lihui from Nankai University’s School of Finance stated that the increase in both the number and severity of market manipulation fines is the result of strengthened regulatory efforts, improved regulatory technology,完善的法律法规, and enhanced investor protection awareness. The application of advanced technological means has increased the ability of regulators to combat market manipulation. Continuous revisions and improvements to relevant laws and regulations have led to harsher 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 amounts 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 pump-and-dump, 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 sanctions, Peng Shaodong and Wang Zheng both 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 penalty order of 2026 in January, also related to stock price manipulation. The investigation found 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 earning about 510 million yuan. The CSRC imposed a “one fine plus one penalty” approach, totaling about 1.02 billion yuan in fines and confiscations. Additionally, Yu Han was banned from securities markets for three years and prohibited from trading securities for three years, implementing a dual ban on identity and trading.

Beyond CSRC penalties, local securities regulatory bureaus have also taken action against manipulation cases. For example, Jin Yongrong, a prominent influencer on Snowball, manipulated the market through “hats” trading. Zhejiang Securities Regulatory Bureau fined and confiscated about 83.25 million yuan and imposed a three-year market ban. Using abnormal trading monitoring, focus on key stocks, and tip reporting, authorities quickly addressed early signs of manipulation, taking regulatory measures over 200 times in just one week against behaviors like pump-and-dump and false declarations, especially targeting ST, *ST, and stocks with abnormal volatility.

Constant Innovation in Manipulation Techniques

From the cases investigated, manipulation methods are continuously evolving, characterized by multi-account operations, long-term control, covert tactics, and information coordination, coexisting with traditional short-term manipulation such as rapid intra-day pump-and-dump, false declarations, and sealing limit-ups.

For example, the Jin Yongrong case shows a new trend toward “information coordination.” Compared to traditional “hats” manipulation, the channels are more diverse. Influencers leverage multiple social media platforms to expand influence, using real trading competitions and live broadcasts to attract attention, enhance credibility, and increase audience engagement. These illegal activities are more covert and complex, increasing regulatory difficulty. Similarly, the Yu Han case involved controlling multiple accounts to coordinate trading of Dr. Eye Glasses, spanning multiple years and market cycles, with a manipulation period of up to five years, effectively avoiding detection.

As manipulation patterns evolve, regulatory technology is also upgrading. For covert illegal activities, authorities employ comprehensive monitoring, big data analysis, multi-channel information collection, and intelligent analysis to build “penetrative” clue screening systems, enabling precise identification and strict enforcement against market manipulation.

“Market manipulation through human control distorts stock prices, causing sharp rises and falls, misleading investor 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 enable real-time detection of false declarations and other manipulative behaviors.

Continued Intensification of Crackdowns

Market expectations are that regulators will persist in “cracking down on big, bad, and key” cases, focusing on investor concerns and deep reforms in the capital market. They will continue to strengthen efforts against illegal activities that investors hate most, including market manipulation.

Recently, the CSRC announced that in its 2026 reform plan, it will strengthen enforcement, severely crack down on financial fraud, market manipulation, insider trading, false statements, and other violations, continuously improve investor protection systems, and enhance the effectiveness and deterrence of regulatory enforcement.

“It is necessary to further improve enforcement effectiveness and reinforce 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 the cost of violations; second, through technological empowerment, deepen AI-driven penetrative supervision to improve detection and response speed; third, through coordinated efforts, strengthen the connection between administrative, civil, and criminal accountability, and enhance law 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. Abandon speculative mindsets of chasing gains and cutting losses, focus 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, A2 edition, under the title “Regulators Take Strong Action Against Market Manipulation, Penalties Exceed 1.1 Billion Yuan This Year.”

Proofread by: Li Lingfeng