According to an investigation by the China Securities Regulatory Commission (CSRC), LeEco’s financial fraud began as early as 2007. Since LeEco is suspected of violating the law on financial fraud, the two sponsors, Ping An Securities and Zhong De Securities, will face varying degrees of penalties.  

Shenzhen Securities Regulatory Bureau will suspend Ping An Securities from being a sponsor for three months, while Zhong De Securities will be fined 17 million yuan (2.68 m). In addition, the relevant sponsor representatives and the current head of the sponsoring business will also be punished.   

In 2010, Ping An Securities sponsored LeEco to go public, raising 730 million yuan in the initial public offering. Ten years later, according to the Administrative Penalty Decision issued by The Beijing Securities Regulatory Bureau in April 2021, the regulatory authorities found that LeEco lied about its financial affairs from 2007 to 2016, and that there were fraudulent records in documents related to its initial public offering and listing, as well as the annual report from 2010 to 2016. Therefore, regulators determined that LeEco’s non-public offering of shares in 2016 constituted fraudulent issuance. 

According to the CSRC, among the ten consecutive years of fraudulent performance of LeEco, the period of financial statistics involving non-public offering documents for LeEco was from 2012 to 2014 and from January to June 2015. From 2012 to 2014, LeEco inflated its income by 89.65 million yuan (14.11m), 200 million yuan (31.47m) and 352 million yuan (55.39 m) respectively, as well as its profit by 84.45 million yuan (13.29m), 193 million yuan (30.37m) and 343 million yuan (53.97m) respectively, accounting for 37.04%, 78.49% and 470.11% of the total disclosed profit at that time.