China's securities regulator has imposed its heaviest penalty yet on illegal behaviors involving privately offered asset management firms, underscoring its ongoing efforts to intensify crackdown on illicit activities in the private fund sector to better protect investor interests.

The China Securities Regulatory Commission said on Friday that Zhejiang Ruifengda Asset Management Co Ltd, several affiliated private fund institutions, and their actual controller Sun Wei, have been fined and had illegal gains confiscated, totaling more than 41 million yuan ($5.9 million) after investigations found serious violations of laws and regulations governing privately offered funds.

The Shanghai office of the CSRC ordered the confiscation of illegal gains and imposed fines totaling more than 28 million yuan ($3.9 million) on Ruifengda and its affiliated institutions, which were involved in false or misleading disclosures and other serious violations. Five responsible individuals were fined a combined total of more than 13 million yuan, and Sun was banned for life from China's securities market.

The penalty surpasses a previous record, highlighting the regulator's zero-tolerance stance, with the CSRC vowing to continue its crackdown on severe violations in the private fund sector.

Informed sources told China Daily that this move is part of the authorities' broader efforts to step up enforcement against private fund misconduct that breaches regulatory "bottom lines" and "red lines" — including illegal fundraising, embezzlement and misappropriation, raising funds for self-use and interest transfers.

"This sends a clear message that the private fund sector is not a regulatory blind spot, and any serious misconduct will face multidimensional and comprehensive enforcement action," sources said, urging institutions to rectify irregular practices and promote the sector's sound development.

Meanwhile, the Asset Management Association of China has revoked the registration of the private fund managers involved. The securities regulator said it will refer relevant case details to police authorities in accordance with the law.

In 2025, the commission conducted administrative inspections on more than 600 entities and individuals in the privately-offered fund sector, launched around 30 investigations and transferred about 40 case clues to the police — indicating stronger enforcement efforts than in previous years.