China’s Netflix fined $ 35 million for stock fraud by securities regulator

Chinese streaming service LeEco (Leshi Internet Information & Technology) said that it has been fined $35 million following an investigation into suspected fraud in its initial public offering (IPO).

The China Securities Regulatory Commission (CSRC) has completed the investigation into LeEco’s IPO in the A-share market and issued a warning of illegal insider disclosure and stock fraud, Global Times reports.

In this regard, the Commission imposed a fine of 600,000 yuan ($ 87,000), ordering the company to make corrections.

The regulator also imposed a fine of 5 percent of the funds raised in the IPO, which comes to 240 million yuan ($ 35 million).

LeEco, dubbed “China’s Netflix” for creating its own content and digital TV broadcasting, was expelled from the Chinese stock market on July 20 this year.

Soon after, its shares plunged to 0.18 yuan, giving it a valuation of 718 million yuan ($ 105 million), down from 170 billion yuan ($ 25 billion) in 2015.

Jia Yueting, who founded the LeEco, is currently under investigation and Jia’s assets in Leshi Internet Information & Technology are frozen.