Another investment advisory firm has faced severe regulatory penalties. On the 19th, the China Securities Regulatory Commission (CSRC) announced a RMB 3 million fine against Qingdao DM Securities Investment Co., Ltd. (DM Investment) and revoked its securities investment consulting license. Additionally, the CSRC issued warnings to four responsible individuals and imposed fines of RMB 600,000, RMB 500,000, RMB 400,000, and RMB 300,000 respectively.
This is not the first securities investment consulting firm to lose its license this year. In November, the CSRC fined Beijing CF Investment Management Consulting Co., Ltd. RMB 3 million and revoked its securities investment consulting license.
Investigations revealed that DM Investment failed to properly retain and destroyed relevant documents and materials, while also submitting filings to securities regulators with significant omissions—actions deemed serious violations.
Key findings of the violations include:
1. **Failure to Preserve and Destruction of Documents** Since 2020, DM Investment’s Jinan branch provided investment advisory services—including course sales, information dissemination, and interactive chats—via its WeChat public account "DM Index." The firm also engaged third-party companies for promotional services. However, DM Investment did not retain records of these promotional and service activities and deliberately deleted partial service data from its database. The violations involved numerous clients and substantial sums, constituting serious misconduct.
2. **Material Omissions in Regulatory Filings** Both the Jinan and Jimo branches of DM Investment are subsidiaries of the firm. From September 2022 to August 2024, DM Investment submitted monthly financial reports to the CSRC’s regulatory system but excluded financial data from these two branches. This resulted in cumulative unreported revenue of RMB 485 million from August 2022 to July 2024. The prolonged duration and significant financial scale of the omissions were deemed severe violations.
During hearings, DM Investment, its representatives, and the four responsible individuals argued for exemption or reduced penalties, but their appeals were rejected.
According to its official website, Qingdao DM Securities Investment Co., Ltd. was founded in 1997 with registered capital of RMB 52 million. It previously held CSRC-approved qualifications for securities investment consulting, investment advisory services, and securities research report publication.
Prior to the license revocation, DM Investment had faced multiple regulatory penalties. In August last year, the Qingdao Securities Regulatory Bureau ordered the firm to suspend new client onboarding for six months. In December, the Shandong Securities Regulatory Bureau mandated corrective actions for its Jinan branch.
Statistics show that, so far this year, the CSRC, local regulatory bureaus, and the Asset Management Association of China have issued nearly 80 penalties targeting 50 investment advisory firms—exceeding last year’s total.
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