Western Areas IPO Intermediaries Penalize Research Report

As the soul of each country’s securities law system, information disclosure plays an important role in solving the asymmetry of capital market information. While intermediaries, as the main part of information disclosure, are significant in the reduction of securities transaction costs, the expansion of securities financing scale and the mature of capital market. These years, however, IPO of shares runs up against change frequently, which is caused by the enterprise and the moral hazard of intermediaries’ is also attracting more attention of the public. The list penalty cases of Yunnan Green Land, Hunan WanFu Biotechnology, Shanxi TianNeng Technology were related to the misrepresentation of intermediaries which were not the issuers, which serious damaged to the investors’ legal rights and interests, and disrupted the normal market order, therefore, their law violations must be corrected, and they are supposed to play their proper duty that they should have.Firstly, this dissertation begins with the statistical data of the penalty, which were made by CSRC, on accounting firms, law firms, the sponsor and listed companies in the provinces in the western region of China in the securities market; by combing the cases above, this dissertation finds that the intermediaries were punished mainly because of subjective reasons, material misstatement and conflict of interests. Secondly, based on the surface causes, this article analyses and details the deep-rooted reasons, such as the lack of agency law, the absence of supervision and their own shortcomings. Finally, aiming at the weaknesses revealed above, this dissertation gives suggestions from three the perfecting of the civil legal liability, supervision system and the independence of intermediaries, in order to reduce violations of intermediaries during the IPO of companies, make them achieve their due professional ethics to be competent gatekeeper of the capital market.