Study On Legal Regulation Of IPO Financial Fraud

IPO financial fraud has been causing damage to the health of the Chinese securities market."Red light incident","WANFU Biotechnology","XINTAI Electric",each vocabulary is related to IPO financial fraud.IPO financial fraud destroys market order,the market's signal mechanism fails,capital is misaligned,and even leads to transaction confusion.Therefore,it is very important to regulate IPO financial fraud.So far,many laws in China have been related to the IPO financial fraud,and they have been limited to a certain extent.For example,fines the issuer,require the issuer to provide civil compensation,let auditors,lawyers,and sponsors to review the issuer's documents.However,in fact,IPO financial fraud has been occurring.There are two reasons.On the one hand,financial fraud is professional and invisible,and it is not easy to be discovered by outsiders.On the other hand,institutional defects create opportunities for financial fraud.In academia,research focuses on the analysis of financial frauds and the causes of financial fraud.Few people observe financial fraud from the perspective of law.Therefore,I want to observe the financial fraud of IPO from the law perspective.Based on the academic achievements of others and combined China's national conditions,this paper analyzes the institutional reasons for the frequent occurrence of financial fraud in China's securities market and finds ways to regulate IPO financial fraud.This article is divided into the following sections:The first chapter mainly introduces the situation of IPO financial fraud in China's securities market,and leads to the argument that the reason for IPO financial fraud is that there are defects in the legal system.Firstly,the article defines the concept of financial fraud,so as to clarify the research object of this article.Secondly,introduce the financial threshold in the IPO system of our country and explain how high andunfavorable it is.Thirdly,describe the situation of IPO financial frauds,including the number of IPO financial fraud cases from 1998 to 2017,the methods of IPO financial fraud,the punished companies and agencies.In addition,this paper introduces the institutional value of managing IPO financial frauds,including protecting investors,avoiding resource mismatches,and maintaining market order.Finally,the article put forward the view: It is necessary to find out the reasons from the behavior itself,and analyze the problems of the legal system that the behavior itself highlights,and provide direction for perfecting the system.The second chapter mainly discusses the causes of IPO financial fraud,including three levels: company,market,and legal responsibility.I find that distortion of morality within the company,strong incentives for equity financing,invalid internal supervision mechanism,role conflict,low cost of illegality are reasons for IPO financial fraud.Therefore,regulate IPO financial fraud should start from the above aspects.The third chapter mainly introduces the United States' experience in regulating financial fraud.In the early 21 st century,the U.S.stock market exposed a series of financial frauds.This led to heated discussions between academic and practical circles,and eventually prompted Congress to pass the famous Sarbanes-Oxley Act.The act has made great efforts to punish securities fraud,standardize corporate governance,improve the independence of intermediaries,and protect investors.The problems encountered by China's securities market in managing IPO financial fraud are similar to those encountered in the US securities market at that time.Drawing lessons from this experience will help us solve today's problems.The fourth chapter mainly discusses the perfection of China's IPO financial fraud regulations system.This chapter takes the previous chapter as a direction,draws lessons from foreign experience,combines China's national conditions,discusses the regulate methods of IPO financial fraud,and perfect related legal systems.