Research On The Effectiveness Of Penalties For Information Disclosure Violations Of Listed Companies

Chinese stock market’s history started after the establishment of Shanghai and Shenzhen Stock Exchange in the late 1990s. In the past less than thirty years, China has made remarkable achievements in many fields such as economy, politics and culture. And capital market is also developing very fast with our country’s prosperity growing. The basic construction of legal system gradually perfected. The enthusiasm of market participants is higher and higher and the securities trading places more and more energetic. All of this shows that China’s securities market is maturer. And it still has plenty of room for development in the future. However, beneath these flashing achievements are an increasing number of information disclosure violations, especially after 2011. The phenomenon of information disclosure violations becomes more rampant, causing damage to the benefit of investors. This paper studies the regulation effectiveness of the listed company information disclosure violations. Using the CASE Method and descriptive statistical method, to explore the main influence factors of the regulation effectiveness of Shenzhen Zero-Seven Co.,Ltd information disclosure. Then put forward feasible suggestions to improve the effect of regulation. The paper goes beyond traditional empirical test method in studying about information disclosure violations. add up to the practical value of the research results by analysis of the case.Asymmetric Information, Efficient Markets Hypothesis and Game Theory are the theoretical basis in the studying of information disclosure regulation in this paper. In order to supplement the shortage of the case study, the contents of the paper include the descriptive statistics of large sample data. The author has selected 758 sample companies from all of listed companies of the information disclosure violations by collecting data in databases and online sources. After the descriptive statistics, we explored some main influencing factors of the information disclosure violation such asour country’s present situation of information disclosure violations, supervisory punishment type, auditing opinion type, characteristics of continuous violations company, etc. The results showed that, the problem of information disclosure of listed companies is serious in our country. There is a lack of punishment effectiveness of supervision when the company limited violates rules or laws concerning information disclosure. External audit institutions haven’t helped regulations over violation problem either. And if the ultimate controller of the company has state-owned background, the possibility of regulated punishment is lower than other types of companies. In conclusion, there are many problems remained to be solved in terms of regulations over information disclosure violations of Chinese listed companies.The study selects Shenzhen Zero-Seven Co.,Ltd. as the case research object, exploring all of the main influencing factors in weakening the effect of punishment by reviewing a series of information disclosure violations cases of Shenzhen Zero-Seven Co.,Ltd. Those factors including external regulation environment, the law enforcement efforts of regulators, intermediary organizations, the changes of senior managers and the balanced mechanism among the interest groups such as shareholders, board of directors and managers. To reduce the defects of the ShenZhen Zero-Seven Co.,Ltd in regulation effectiveness of the information disclosure violations, after taking into account the circumstances of China and characteristics of listed companies, the author has put forward some suggestions, such as to improve the working methods of supervisors appropriately, establish the right ownership structure within company, make full use of external agencies supplementary role and so on.