Special Treatment Zhongcheng Information Disclosure Violations and Financial Fraud

School of Finance and Economics, Harbin Guangsha College, Harbin, China

^* Corresponding author: xinyi523@asu.edu.pl

Abstract

This thesis focuses on the typical case of Special Treatment Zhongcheng (formerly Qingdao Zhongcheng), comprehensively using empirical research methods to conduct a systematic and in-depth analysis of the company’s specific means of information disclosure violations and financial fraud. In the research process, it innovatively adopts the event study method to meticulously analyze the abnormal stock price fluctuations before and after the exposure of fraud, striving to accurately reveal the impact of fraudulent acts on the capital market. Meanwhile, the paper also deeply explores the penalty measures taken by regulatory authorities for such violations and the company’s response strategies in the face of crises. The research results show that ST Zhongcheng manipulated financial statements through a series of complex and hidden fraudulent means, including fabricating revenue, inflating assets, and concealing major litigations, eventually triggering a cliff-like decline in stock prices and causing severe damage to the vital interests of investors. This study expects to provide useful references for regulatory authorities to optimize regulatory policies, investors to enhance risk identification capabilities, and listed companies to strengthen compliance management, so as to help improve the capital market regulatory system and enhance enterprises’ awareness of compliant operations.