The Supreme People's Procuratorate will crack down securities crimes such as financial fraud and market manipulation, and will intensify supervision over false lawsuits such as debt evasion, "cutting off interest," and "routine loans."

Reporter: Song Qinzhang Editor: Liao Dan

On December 28, the Supreme People's Procuratorate (hereinafter referred to as the "Supreme People's Procuratorate") held a press conference, at which it issued the "Opinions of the Supreme People's Procuratorate on Giving Full Play to the Role of Procuratorial Functions and Serving and Ensuring the High-quality Development of Finance in accordance with the Law" (hereinafter referred to as the "Opinions"). In addition, the Supreme People's Procuratorate also reported on the work of procuratorial organs across the country in punishing and preventing financial crimes in 2023.

Ge Xiaoyan, a member of the Party Leadership Group and Deputy Procurator General of the Supreme People's Procuratorate, said at the press conference that procuratorial organs, as legal supervision organs, should assume heavier responsibilities in preventing and resolving financial risks, maintaining national financial security, and promoting high-quality financial development. The "Opinions" aim to answer the major question of how procuratorial organs can better play their procuratorial duties and roles in promoting high-quality financial development, take the implementation of General Secretary Xi Jinping's important speech at the Central Financial Work Conference as the main line, and clarify the objectives, tasks, methods and measures of financial procuratorial work in the coming period from the aspects of improving political standing, performing procuratorial functions with high quality and efficiency, improving the financial procuratorial system and mechanism, optimizing the financial ecology, and strengthening organizational leadership. ”

Comprehensively strengthen supervision, prevent and resolve risks

Focusing on the key point of comprehensively strengthening supervision and preventing and resolving risks, the "Opinions" put forward the key points for the performance of duties of criminal, civil, administrative, and public interest litigation procurators based on their procuratorial duties.

Ge Xiaoyan pointed out that in terms of criminal prosecution, the focus is on intensifying the punishment of financial crimes in areas with high financial risks, highlighting the crackdown on illegal financial activities under various names, continuing to increase the prosecution of money laundering and related crimes, properly handling the risks of small and medium-sized banks and other financial institutions in accordance with the law, and severely cracking down on financial fraud, market manipulation and other securities crimes.

In terms of civil prosecution, we will handle civil supervision cases in the financial sector with high quality and efficiency, focusing on increasing the supervision of false litigation in the financial sector, such as debt evasion, "cutting interest" and "routine loans", focusing on strengthening civil enforcement supervision, and strengthening the orderly connection between civil prosecution and criminal prosecution.

In terms of administrative procuratorates, we will actively promote the "reverse" connection with administrative organs in conjunction with the handling of criminal cases.

In terms of public interest litigation prosecution, public interest litigation will be carried out in statutory areas such as the protection of state-owned financial assets, the protection of sensitive personal information of financial accounts, the governance of telecommunications network fraud in the financial sector, and the anti-monopoly of the financial industry, and actively explore the expansion of public interest judicial protection in areas such as inclusive finance, pension finance, and green finance.

Liu Chunsheng, an associate professor at the Central University of Finance and Economics, said in an interview with every reporter that the Supreme People's Procuratorate's issuance of the "Opinions" is of great significance in several aspects. The first is to maintain financial order. The issuance of this document will help maintain the order of the financial market and protect the legitimate rights and interests of investors and financial service consumers. Procuratorial organs may, through the exercise of procuratorial functions in accordance with the law, severely crack down on illegal and criminal acts in the financial sector and maintain a level playing field in the financial market.

The second is to guard against financial risks. The promulgation of the "Opinions" can promote the prevention and resolution of financial risks. By strengthening cooperation with the financial regulatory authorities, the procuratorial organs can jointly prevent financial risks and ensure the safe and stable operation of the financial system.

The third is to promote financial reform and innovation. The Opinions support and encourage financial reform and innovation, and provide legal guarantees for the development of the financial market. Procuratorial organs can provide legal support for financial innovation and protect the enthusiasm of financial innovation by handling cases in the financial field in accordance with the law.

Fourth, promote high-quality financial development. The release of the "Opinions" will help improve the ability of financial services for the real economy and promote the high-quality development of finance. Procuratorial organs can promote the standardized operation of financial institutions and improve the quality and efficiency of financial services by strengthening legal supervision over financial institutions.

Xiao Sa, a senior partner at Dentons, said in an interview with reporters that there are many highlights in the "Opinions" that are worth paying attention to, such as the mention of "exploring and carrying out public interest litigation in the financial field", which is undoubtedly a useful attempt and promotion of the public interest litigation system;

"In addition, in the Opinions, the Supreme People's Procuratorate also responded to the current frequent cases involving virtual assets, securities, and private equity, making it clear that it is necessary to crack down on crime, and at the same time, it is also necessary to 'coordinate and regulate financial innovation activities in accordance with the law', which is undoubtedly worthy of affirmation. Lawyer Xiao Sa added.

Crack down on securities crimes strictly

It is worth mentioning that the "Opinions" emphasize the strict crackdown on securities crimes in accordance with the law, which has attracted the attention of the market.

The "Opinions" pointed out that in accordance with the law, it is necessary to crack down on financial fraud crimes such as fraudulent issuance and illegal information disclosure of listed companies, prosecute related crimes such as misappropriation of funds, embezzlement of duties, and breach of trust that damages the interests of listed companies, and serve to ensure the registration system of stock issuance with information disclosure as the core. Strictly punish crimes that seriously undermine the order of capital market transactions, such as insider trading, market manipulation, and trading using undisclosed information, in accordance with law. Increase the extent of accountability for violations and crimes committed by financial institutions, controlling shareholders, actual controllers, directors, supervisors, senior managers, and other personnel in key positions such as listed companies. Strictly punish third-party intermediaries for crimes involving false supporting documents, and consolidate the professional gatekeeping responsibilities of third-party intermediaries. Handle criminal cases involving the delisting of listed companies in accordance with the law, and protect the lawful rights and interests of relevant persons to the greatest extent.

Liu Chunsheng told every reporter: "By cracking down on illegal and criminal acts such as market manipulation, insider trading, and related party transactions, we can escort the healthy development of the capital market, which is conducive to maintaining the openness, fairness and justice of the capital market, improving the quality of listed companies, and protecting the interests of investors, especially small and medium-sized investors, which can provide a good environment for the reform and innovation of the A-share market and promote the long-term healthy development of the market." ”

Lawyer Xiao Sa pointed out that the practical significance of this article lies in the fact that it can play an extremely effective deterrent effect on the current securities market participants. On the one hand, it shows the determination of the Supreme People's Procuratorate to crack down on such crimes strictly, and can clean up the black sheep in the market with better results; on the other hand, through this attitude, it can also deter other people who have not yet violated the law and commit crimes, prevent the emergence of more securities crimes, and thus maintain the institutional system in this field, so it is of great significance." ”

In addition, every reporter has noticed that the "Opinions" also propose to coordinate and regulate financial innovation activities in accordance with the law. Strengthen the analysis and judgment of the use of new technologies and new forms of business to carry out illegal and criminal financial activities, cooperate with the financial regulatory departments to accurately identify changes, respond scientifically, and severely crack down on illegal financial activities of "driving without a license", and ensure the normal development of legitimate financial innovation activities in accordance with law. Pay attention to the new risks of committing financial violations and crimes in the name of investment such as virtual currencies and digital collections, and actively work with relevant departments to research and formulate response plans. Accurately identify new methods of securities crimes such as the use of financial derivatives to manipulate the market, and the use of private placements and trust products to carry out over-the-counter capital allocations, and promptly expose and crack down on new types of financial violations and crimes.

Lawyer Xiao Sa said that with the rapid development of science and technology, all kinds of new financial innovation activities have emerged one after another, and many criminal gangs have used these "advanced" technologies to carry out illegal and criminal activities. "On the one hand, the guiding value of this article lies in the fact that it mobilizes the linkage ability between the judicial organs and the financial regulatory authorities, and accurately identifies crimes through coordination and analysis and judgment with the financial regulatory authorities, so as to enable the development of financial innovation activities that are truly beneficial to the society and prevent the spread of financial violations and crimes that are harmful to the society. On the other hand, this article also proposes that the relevant departments may study and formulate a response and disposal plan, which will undoubtedly enable each department to have a clear reference in the actual process of handling cases, and effectively avoid the situation of inconsistent law enforcement and identification. ”

The whole chain of punishment of financial crimes and related crimes is an important direction in the future

Zhang Xiaojin, Director of the Fourth Procuratorate of the Supreme People's Procuratorate, reported at a press conference on the work of procuratorial organs across the country in punishing and preventing financial crimes in 2023. Zhang Xiaojin pointed out that overall, the number of current financial crime cases has declined, but it is still running at a high level. In the first 11 months of 2023, procuratorial organs across the country approved the arrest of 11,060 suspects for undermining the order of financial management and financial fraud, and prosecuted 22,529 people, a year-on-year decrease of 10% in the number of prosecutions, and the crimes involved were relatively concentrated.

First, the crime of illegal fundraising remains high, the combination of online and offline, the interweaving of traditional means and new means, and the use of private equity funds, blockchain, virtual currency, new energy, film and television investment and other market hotspots of new cases have increased significantly. Second, cases in the field of financial credit such as small and medium-sized banks, trusts, and bills occur from time to time, with some financial institutions colluding with outsiders inside and outside, and some financial institutions illegally obtaining funds from financial institutions by actual controllers and major shareholders, and the amount of money involved in some cases is huge. Third, there has been an increase in the number of crimes such as financial fraud and breach of trust damaging the interests of listed companies in the capital market, the frequent occurrence of transactional crimes such as insider trading and securities market manipulation, and the emergence of new situations such as the use of complex financial products such as FOF funds and over-the-counter options to commit securities crimes. Fourth, there has been an increase in money laundering, illegal payment and settlement of funds, and illegal trading of foreign exchange, and cross-border transfer of funds through virtual currency transactions has become a new means.

"In addition, we also found in the handling of cases that behind all kinds of financial crimes, the problems of the black and gray industry chain such as fund brokers, technology hackers, stock market 'black mouths', and counterfeiting intermediaries have become increasingly prominent, and the crime has even become the initiator of financial crimes, and the whole chain of punishment of financial crimes and related crimes is an important direction in the future. Zhang Xiaojin emphasized.

Zhang Xiaojin said that the procuratorial organs will punish financial crimes in key areas in accordance with the law and promote the healthy development of the financial market. In the first 11 months of 2023, a total of 15,590 people were prosecuted for illegally absorbing public deposits and fundraising fraud, a year-on-year decrease of 5.6%. We further intensified the crackdown on securities crimes, handled a number of cases of financial fraud, securities market manipulation and insider trading with major social impact, such as Zhangzidao, Huitian New Materials, and Longli Biotechnology, and prosecuted 316 people for securities crimes, an increase of 11.7% year-on-year. Cracked down on crimes involving private equity funds in accordance with the law, prosecuting 430 people, a year-on-year decrease of 36.7%. Severely punished credit crimes involving financial institutions, prosecuting 2,106 people for the crimes of fraudulent loans, bill acceptance, financial bills and loan fraud, a year-on-year decrease of 11%. Continued to strengthen anti-money laundering efforts, prosecuting 2,301 people for money laundering crimes, an increase of 10% year-on-year.

National Business Daily