The China Securities Regulatory Commission (CSRC) says it is intensifying its crackdown on cases involving the dissemination of false market information by “black mouths.”
Huang Wei (黄炜), CSRC assistant chair, recently convened a meeting in Shanghai in relation to a total of eight “black mouth” investigations that have been launched since the start of 2018.
CSRC spokesman Gao Li (高莉) said that black mouth cases involve unfair trading conduct, including the illegal provision of investment consulting services that mislead investors into participating in transactions, as well as the fabrication and dissemination of false information and market manipulation.
According to Gao CSRC has just made specialist arrangements for this year’s first specialist law enforcement campaign targeting black mouth cases involving stocks.
The eight cases are more complex than previous forms of stock market fraud, involving greater use of “online virtual spaces” that make it difficult to trace the identity of perpetrators.
Gao points out that fund transfers frequently make use of online payment providers such as AliPay and Tenpay, with funds often passing through multiple accounts.
The original sources of false information are also difficult to trace, while new and innovative forms of fraudulent conduct lack adequate regulatory definition or guidance.