Photo: iStock
Photo: iStock

The China Securities Regulatory Commission (CSRC) announced on Monday that prevailing stock market rumors “pose great harm on market stability,” and, “must be severely punished” if they proved to be unfounded, reported.

The announcement followed two verdicts — Liu and Chen — who were each fined 150,000 yuan (US$22,803) after spreading untrue market rumors in June 2015 and May 2015.

“Whether the spreading of false information is for profit or other reasons, it will undoubtedly lead to the distortion of market information,” Tang Xin, Professor of Law at Tsinghua University, told “The circumstances are serious, and the person needs to be held responsible criminally,” he said.

Liu Junhai, director of the Institute of Commercial Law at the People’s University of China, believes that rumors will also spread if listed companies failed to fully disclose their own information.

“Listed companies should ensure the authenticity, accuracy, completeness and timeliness of the information they disclose,” he said.