Abstract: While acting-in-concert entities can more accurately reflect the substantive control of shareholders over listed companies, existing research has predominantly focused on their governance advantages, paying insufficient attention to their negative effects. Based on a study of data from A-share listed companies in the Shanghai and Shenzhen stock markets from 2015 to 2024, it is found that an increase in the degree of control by concerted actors significantly raises the probability of corporate misconduct, the severity of violations, and the amount of penalties imposed. Corporate digital transformation and technology-driven regulation serve as endogenous corrective and exogenous constraint mechanisms, respectively, mitigating the relationship between acting-in-concert entities and corporate violations. Mechanism tests confirm that acting-in-concert entities elevate the probability of violations by intensifying violation pressure, creating opportunities for misconduct, and fostering self-justifying cognitions. Further analysis shows that, by type of violation, compared to operational violations, acting-in-concert entities have a more pronounced impact on information disclosure violations and leaders’ misconduct. By degree of control, the likelihood of corporate violations is highest when acting-in-concert entities possess absolute control. Based on these findings, regulatory authorities should establish a differentiated supervision system for acting-in-concert entities and strengthen penetration-style oversight. Companies should actively promote digital transformation to build a solid compliance foundation, while minority investors need to develop risk identification mechanisms. These measures can collectively optimize the corporate governance structure and enhance the operational order of capital markets.

Key words: people acting in concert, corporate violations, corporate digital transformation, technology-driven regulation