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China Pledges “Zero Tolerance” for Financial Fraud

Top financial regulators in China pledged to introduce stricter controls following the recent disintegration of a commodity-linked product issued by Bank of China caused losses of over $1 billion.

A meeting chaired by Vice-Premier Liu He focused on commitment to clamp down on financial fraud, insider trader, and market manipulation. “Zero tolerance” is going to be applied and violators will face harsh penalties and punishments.

According to a Caixin report, international commodity market risks were discussed in light of the recent collapse of the Bank of China’s product which targetted about 60,000 investors.

Recently, China was also found in the recent Luckin scandal that erased $5 billion in shareholder value after the coffee seller fraudulently manipulated its sales figures. Mainland regulators stated last month that they might cooperate with American regulators to monitor and crackdown on cross-border wrongdoings involving foreign-listed Chinese firms.

The meeting held involves a top level of committee, the Financial Stability and Development Committee (FSDC), which incorporates state heavyweights in China’s financial sector. Additionally to Liu – the highest economic advisor to Xi Jinping – the FSDC also includes financial institution governor Yi Gang; state council deputy secretary-general Ding Xuedong; banking and insurance regulator Guo Shuqing; securities regulator Yi Huiman; and exchange chief Pan Gongsheng.