A Case Analysis Of WFSK’s IPO Fraud

Since China’s securities market established for more than20years, it reach theprosperity which the rest countries of the world cannot believe. However, at the sametime of rapid economic development, some drawbacks and deficiencies of the freesecurities market are also shown gradually, the financial fraud cases occur frequently.They have a lot of negative effects on the development of China’s securities market. Thefinancial fraud cases, especially the happening of the IPO fraud case, are extremelyunfavorable to operation and healthy development of the whole securities market inChina. In the process of into the market, these companies come up with all kinds offanciful fraud technique; publish false financial data; cheat the securities regulatoryauthority and the general investors, in order to achieve the securities and futurescommission standards. This situation will hinder the healthy and long-term developmentof the stock market essentially. This kind of behavior is negative to the normal operationof the capital market, and will blow the confidence of investors. The interests ofinvestors’ will loss seriously, and it will ultimately affect the healthy development of thewhole market economy. So, we should analyze deeply the fraud technique and thepurpose of the fraud. It has a very important and positive significance for preventing theoccurrence of similar cases later.In this article, writer selects an extensive influence and strong representative casewhich was caught out in recent years to analyze. The case is about the IPO fraud ofWanfu Biotechnology (Hunan) Agricultural Development. At the first of main body,writer discusses the progress of the case systematically, and then analyzes and evaluatesthe controversy of this case, next writer analyzes the the detail of fraud technique anduniqueness of this case, and describes briefly the purpose of the offender and the illegalways, in order to prevent the occurrence of similar cases fundamentally. In the future ofthe securities market, illegal enterprises are difficult to violate the laws for into themarket again in similar illegal means, and then protect the interests of the broad massesof investors, especially small and medium-sized investors. This case is veryrepresentative, has great reference significance.In this article, the author analyzes the detail of the financial fraud cases of Wanfu Biotechnology (Hunan) Agricultural Development, including fraud purposes, fraudtechnique, illegal means, etc. The author also analyzes the reason of repeated occurrencesof IPO fraud. At the same time, when the vast numbers of investors, especially small andmedium-sized investors go through the beginning and end of the case, they also need toactively summarize, find objectively fair investment way which suits own and isrelatively safe. And then they will protect their own interests. So at the end of the article,the author attempts to put forward some advice about how to protect the interests of theinvestors.