A Preliminary Discussion on the Securities Fraud Prohibition System: A Study Centered on Anti-Fraud Clauses

Author: Hu Xiaoke
Publisher:
Publish Date: 2004-05-01
Features: This book combines the development of the securities market in recent years with the issuance of the "Nine Opinions" by the State Council on the development of the capital market, elaborating and researching the prohibition system against securities fraud. The book is divided into six chapters, using the Enron scandal as a starting point to provide a detailed discussion on the general analysis of the prohibition system against securities fraud, empirical research on securities fraud behavior, research on legal liability, and civil liability for securities fraud. It also proposes suggestions on how China can establish and improve its prohibition system against securities fraud. Fraud and anti-fraud are two opposing forces that coexist in the securities market in the long term. From the development history of the securities market, whether in developed or developing countries, anti-fraud has always been a clear main thread in securities legislation and regulatory activities. The prohibition of securities fraud not only aims to restore market fairness and justice but also carries the mission of ensuring the sustainable development of the economy and society. The concept of "society-centered" should, in a certain sense, be the fundamental starting point for securities anti-fraud efforts. The debate over "Chinese characteristics" and "international norms" ultimately boils down to an old problem that has long plagued the development of China's securities market—namely, the issue of regulation versus development. From the development history of China's securities market, a vicious cycle seems to have formed regarding regulation and development: when regulators intensify efforts to crack down on fraud cases, the stock market immediately falls into a slump, forcing regulators to struggle to stabilize it; conversely, when emphasis is placed on development or stability, irrational speculative mania tends to erupt. In the context of global economic integration and the internationalization of securities crimes, emphasizing the importance of "international rules" is undeniably justified. However, ignoring the unique development history and growth experience of China's securities market will not help achieve the ultimate goal of anti-fraud efforts.