(Bloomberg) -- A Chinese city is taking action against the spread of false information online related to stocks, as authorities seek to revive confidence in the languishing equities market. 

Police in the city of Chengdu in Sichuan province, southwestern China, has arrested a 30-year-old man for fabricating a foreign media report to say measures to overhaul the stock market are due, according to a statement on Wednesday. The fake rumor has “seriously disrupted the stable operation of the securities market and misled investors and the public,” it said.

China markets, dominated by retail investors, have often seen huge swings when screenshots of unverified policy documents make their rounds on social media platforms such as WeChat and Weibo. Some traders have attributed the prevalence of rumors to the market’s prolonged slump and a lack of clarity on major policy directions.

READ: China Sovereign Fund Buys ETFs in New Bid to Boost Stocks (3) 

Chengdu city’s arrest comes as a slew of measures to boost the $9.8 trillion stock market have fallen flat in the face of sagging confidence. The efforts have included buying of exchange-traded funds by the country’s sovereign wealth fund, purchases by major mutual funds of their own equity-focused products and lower transaction costs. 

The CSI 300 benchmark has slumped more than 8% this year in one of the world’s worst performances among major indexes. It’s headed for a third year of losses. 

While most of the rumors would prove groundless, a few — such as speculation over the country’s abandonment of Covid-19 measures — turned out to be accurate in the subsequent weeks. Earlier this year, China’s securities watchdog fined information provider Shanghai Esteel Co. 300,000 yuan ($41,979) for fabricating news that caused iron ore futures prices to spike. 

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