China’s securities regulator has fined a former Shenzhen bourse official 251 million yuan ($36.5 million) for making illegal trades to profit from company IPOs, underscoring Beijing’s drive to root out bad behaviour in its equities markets.
The China Securities and Regulatory Commission (CSRC) said on its official microblog late on Friday it had fined Feng Xiaoshu, formerly a member of the Shenzhen exchange’s listing approvals committee, and confiscated 248 million yuan he made through the trades.
Feng had used relatives accounts to buy shares in companies ahead of initial public offerings, which he would then sell after the price had shot up following the listing, it said, adding Feng would be barred from the market for life.
Chinese regulators have turned their sights on controlling risks in financial markets as speculative activity and leverage in the economy rise, with the securities regulator vowing to clear out “abnormal phenomena” from capital markets.
Last week the head of China’s securities regulator said stock exchange overseers must “brandish the sword” and combat any activities that disturb market order.
China’s crackdown on illegal market activities has intensified since a mid-2015 stock market crash that wiped out almost $3 trillion of share value.