Under the new normal economy, the real economy continues to weaken and the virtual economy continues to expand, which leads to financialization. Financialization is not only related to the sustainable development of the main business, but also may affect economic operation risks through the “systematic risk linkage mechanism”. It is highly valued by the Party and the government, and widely concerned by academia. The existing literature on financialization is mainly based on the assumption of independent corporate decision-making, and rarely discusses the role of social interaction factors. However, due to the uncertainty of economic prospects, information costs and so on, the decision-making of corporate behavior will be affected by other actors in the embedded social environment. Relying on industries and regions, this paper takes the annual data of all listed non-financial companies from 2007 to 2018 as samples to test the impact of financial asset allocation on corporate fraud from the perspective of peer effects. Moreover, this paper provides an explanation for the relationship between the two from the perspective of market information transparency. Eliminating heteroscedasticity and addressing endogenous concerns with 2SLS and the Bivariate Probit method, the results show that financial asset allocation has obvious peer effects. That is, companies will imitate the financial investment decisions of peer companies in the same industry but in different regions, in the same region but in different industries and in the same industry and region, which will increase the probability and extent of corporate fraud; the transmission path is that peer effects of financial asset allocation will reduce market information transparency and thus positively affect corporate fraud. After distinguishing the types of financial asset allocation, it is found that the peer effects of long-term financial assets play a major role; after analyzing corporate fraud motives, it is found that the peer effects of financial asset allocation will enhance arbitrage, earnings management, and benefit expropriation motives; in terms of external shocks, it is found that the positive relationship between the peer effects of financial asset allocation and corporate fraud has been strengthen after 2012. The findings indicate that financialization has a contagious effect, which will amplify asset bubbles, cause financial speculation, and increase market frictions, thereby increasing the difficulty of supervision, reducing the probability of being audited, enhancing corporate fraud motives, and ultimately leading to frequent corporate fraud. In theory, the conclusions can deepen the research on financialization, enrich the “investment-centric theory”, and provide further empirical evidence for the fraud triangle theory. In practice, the conclusions can help market participants understand the internal logic of China’s current economic “from real to virtual” disrupting the capital market, and provide reference for regulatory authorities to further promote financial marketization reform, guide financial services to the real economy, weaken cross-industry arbitrage and other motives, and prevent illegal risks. At the same time, it is helpful for financial market information intermediaries to clarify the harmfulness of peer effects of financial asset allocation, effectively tap the fundamental information of companies, improve the efficiency of market information, and help the governance of violations.