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Forty-six people have been banned this year from investing on the stock market, while 16 listed companies and two brokerage firms have been fined, all for illegal trading activities, the China Daily said, citing regulators.
"Increasingly rampant speculative activities have contributed to the stock market frenzy that is fuelling unsustainable bubbles," the state-run newspaper said in an editorial.
"Such wrongdoings range from illegal information disclosure to insider trading and unauthorised investment consulting businesses."
In one of the most famous cases, police this month detained a self-proclaimed "legendary" stock adviser who ran an unauthorised internet service, for operating without a license.
Wang Xiejie earned 13m yuan by providing tips to thousands of subscribers since February but his claims that he had worked as an analyst for some of China's major securities firms were challenged.
The warning about the raft of shady share dealings came after China's market hit a record high on Thursday, despite the government acting repeatedly in recent months to cool the stocks and the economy in general.
The benchmark Shanghai Composite Index closed at 4 346.46 points on Thursday, up more than 62% from the start of the year, which followed a massive 130% rise in 2006.
The China Daily said regulators would step-up their vigilance as investors would inevitably be tempted to cut corners in search of spectacular profits.
"Supervision will be tightened as illegal activities increase amid the stock market frenzy," the editorial said.
Sapa-AFP
