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Insider trading related cases

(Summary description)Editor's note: The matter of the predecessors, the teacher of the future. History can make people wise. In order to implement the spirit of the "Notice on Implementing Two Judicial Documents on Combat

Insider trading related cases

(Summary description)Editor's note: The matter of the predecessors, the teacher of the future. History can make people wise. In order to implement the spirit of the "Notice on Implementing Two Judicial Documents on Combat

Information

Editor's note: The matter of the predecessors, the teacher of the future. History can make people wise. In order to implement the spirit of the "Notice on Implementing Two Judicial Documents on Combating Securities and Futures Crimes" by the Empirical Supervisory Commission, and focusing on the theme of "Stay away from insider trading, sincere and psychological investment", we have selected some insider trading cases, hoping to attract investors Take a warning and invest rationally.

Case 1, Li Wenqing insider trading case

According to the clues discovered by the Shenzhen Stock Exchange monitoring, the China Securities Regulatory Commission will investigate the violations of laws and regulations by Hunan Tianyi Technology Co., Ltd. (hereinafter referred to as "Tianyi Technology"). During the investigation, it was discovered that Li Wenqing, the legal representative of Shanghai Jinsheng Investment Management Co., Ltd. (hereinafter referred to as "Jinsheng Investment"), was suspected of insider trading, and the case was transferred to the public security agency for investigation and punishment in June 2010. The People's Court of Luwan District of Shanghai has already rendered a judgment on the case.

In October 2006, Li Wenqing and the then chairman of Tianyi Technology, Zhou, and others went to Guizhou to discuss cooperation with the partner, Guizhou Runfeng Mineral Energy Co., Ltd. (hereinafter referred to as "Guizhou Runfeng"), and Zhang, the chairman of Guizhou. Weizhai Antimony Mine and Yujiazhai Lead-Zinc Mine in Dushan County, Hunan Province. On October 31 and November 1, 2006, Tianyi Technology allocated a total of 30 million yuan to Guizhou Runfeng to confirm the cooperation. On January 23, 2007, Tianyi Technology issued the "Outbound Investment Announcement" stating that Tianyi Technology invested 30 million yuan to develop the Weizhai Antimony Mine and Yujiazhai Lead-Zinc Mine in Dushan County, Guizhou Province in cooperation with relevant partners and personnel. . From December 2006 to January 2007, before Tianyi Technology issued the "Outbound Investment Announcement", Li Wenqing used the Jinsheng Investment Stock Account under his control to buy 700,700 shares of Tianyi Technology, with a turnover of approximately 3.86 million yuan, until 2007 They were all sold in February 2008, and the illegal profit was about 3.89 million yuan.

The China Securities Regulatory Commission determined that Li Wenqing’s actions violated Article 73 of the Securities Law, “It is prohibited for insiders of securities trading inside information and those who illegally obtain inside information to use inside information to engage in securities trading activities” and Article 76 “ Insiders of securities trading inside information and those who illegally obtain inside information shall not buy or sell the company’s securities, or divulge the information, or advise others to buy or sell the securities before the inside information is disclosed, and are suspected of constituting Articles of the Criminal Law. The crime of insider trading stipulated in Article 180. In June 2010, the China Securities Regulatory Commission transferred the case to the public security organs for criminal responsibility in accordance with the law.

On July 5, 2011, the People's Court of Luwan District, Shanghai handed down a judgment on this case. The judgment found that Li Wenqing used the identity of insider information to illegally buy and sell securities at a low price before disclosure of the inside information and sell it at a high price after disclosure. The circumstances were serious and constituted the crime of insider trading and should be investigated for criminal responsibility in accordance with the law. In view of Li Wenqing's ability to truthfully confess the crime committed, he voluntarily pleaded guilty in court and refunded part of the illegal gains, he can be given a lighter punishment in accordance with the law as appropriate, sentenced to 2 years in prison, and fined for the illegal gains.

Case 2: Insider Trading Case of Zhongshan Public

From April to May 2007, Tan Qingzhong, then chairman of Zhongshan Public Utilities Group Co., Ltd., planned to inject the company's high-quality assets into public utility technology of the listed company (changed to "Zhongshan Public Utility" in 2008) to achieve the overall listing of the public utility group. During this period, he repeatedly reported to Li Qihong, the mayor of Zhongshan at the time, on this matter and received support. On June 11, Tan Qingzhong reported the matter to Chen Genkai, Secretary of the Zhongshan Municipal Party Committee, and Chen Genkai made Li Qihong responsible for the matter. Subsequently, Tan Qingzhong informed the defendant Zheng Xuling of the matter and asked Zheng to draft a written material on the reorganization. On the 26th of that month, he formally reported the proposal to Li Qihong. On July 3, Li Qihong, Tan Qingzhong, Zheng Xuling and others reported to the China Securities Regulatory Commission on the major asset restructuring of public science and technology and the realization of the overall listing of public utility groups. On the same day, Public Science and Technology announced that the company plans to discuss major issues in the near future. Trading in public technology stocks was suspended the next day.

After the China Securities Regulatory Commission investigated public technology related issues, it was determined that the plan for the public utility group to inject its high-quality assets into the public technology to achieve overall listing was inside information before it was released. The inside information was formed on June 11, 2007. The inside information is price sensitive. Trading will be suspended until July 4 of the same year.

But in June 2007, when Tan Qingzhong reported to Li Qihong about the preparation of asset reorganization, he mentioned that the stock price of public technology would rise, and suggested that Li Qihong let Lin Yongan buy it. In mid-June, Tan Qingzhong met with Lin Yongan in his office, leaked inside information about the asset restructuring, and suggested that he invest in stocks. In late June, Li Qihong leaked the above inside information to Lin Xiaoyan at home and entrusted her to purchase 2 million public technology stocks. Subsequently, Lin Xiaoyan raised a total of 6,770,200 yuan. From June 29 to July 3, 2007, he bought a total of 896,800 shares, and then sold them from September 18 to October 15, with a book gain of 19.83 million. Yu Yuan.

On October 27, 2011, the Zhongshan Public Utilities insider trading case was sentenced in the first instance by the Guangzhou Intermediate People's Court. The 10 defendants, former Zhongshan Mayor Li Qihong and former Zhongshan Public Chairman Tan Qingzhong, were sentenced to 1.5 to 11 years in prison respectively.

Li Qihong, the former mayor of Zhongshan City, was sentenced to 11 years in prison for insider trading, leaking inside information, and bribery, and was fined 20 million yuan and confiscated 100,000 yuan of property. Also sentenced at the same time were her husband Lin Yongan, sister-in-law Lin Xiaoyan, and younger brother Li Qiming. Lin Yongan committed insider trading crimes and was sentenced to 3 years and 6 months in prison and fined 3 million yuan; Lin Xiaoyan committed insider trading crimes and was sentenced to 5 years and 6 months in prison and a fine of 13 million yuan; Li Qiming was guilty of money laundering, Sentenced to 2 years in prison and fined 1 million yuan.

In addition, Tan Qingzhong, the former chairman of Zhongshan Public Utilities, committed insider trading and leaking inside information, and was sentenced to 5 years in prison and fined 7 million yuan; Zheng Xuling, the former assistant general manager of Zhongshan Public Utilities, was sentenced to fixed-term imprisonment 7 In 2015, he was fined 25.3 million yuan; Zhou Zhongxing, the former manager of the Zhongshan Public Enterprise Management Department, committed insider trading and was sentenced to 6 years in prison and a fine of 18.1 million yuan; other related defendants Zheng Haozhi, Chen Qingyun, and Fei Zhaohui received 5 years in prison, Two and a half years and one and a half years, and fined 1.9 million yuan, 600,000 yuan and 200,000 yuan respectively.

Case Three, "Tianshan Textile" case

The China Securities Regulatory Commission reported that during the major asset reorganization of Tianshan Textile in July 2009, senior executives Yao Rongjiang, Cao Ge and others of the restructuring party were suspected of insider trading and leaking insider information. The China Securities Regulatory Commission has transferred the case to the public security organs for criminal prosecution. responsibility.

An investigation by the China Securities Regulatory Commission found that in July 2009, Tianshan Textile was planning an asset reorganization. Yao Rongjiang, general manager of Xinjiang Kaidi Investment Co., Ltd., and Cao Ge, deputy general manager and asset management department manager of the company, were all insiders. Before the suspension of Tianshan Textile stock on July 23, Yao Rongjiang leaked the restructuring information to Wang, who bought more than 1 million shares of Tianshan Textile stock through multiple securities accounts controlled by him. Coincidentally, Cao Ge leaked the restructuring information to Chen, who used his and his relatives' accounts to buy a large amount of Tianshan Textile stocks.

After the completion of the reorganization in June 2010, Tianshan Textile continued to rise by five consecutive daily limits. Since then, the stock price has continued to rise. As of September this year, the stock price has risen by more than 240%. Yao Rongjiang, Cao Ge and others have benefited from it.

In January 2011, the Urumqi Intermediate Court issued a first-instance judgment, imposing fixed-term imprisonment (probation) and other criminal penalties on all suspects, and sentenced a total fine of 10.8 million yuan. None of the defendants appealed, and the procuratorate did not protest. The current first-instance judgment Has come into effect.

The case has the following characteristics:

First, it has great influence. This case is the first insider trading case in Xinjiang where the verdict has come into effect, and the verdict involved four natural persons and two units with a large number of subjects, which shocked the local government and market-related subjects greatly.

The second is that the transaction amount in this case is large. The suspect invested more than 8 million funds within two days after obtaining the information. The purchase cost was about 6 yuan. After the resumption of trading, it had risen to more than 17 yuan, and the book profit had doubled as of the day when the judgment became effective.

Third, the subject involved in the case has strong anti-investigation capabilities. Before serving as the general manager of Kaidi Investment, Yao Rongjiang served as a senior executive of hops for a listed company in Xinjiang for a long time. He is familiar with securities market laws and regulations. Cao Ge also has many years of experience in the securities market. They are good at disguising and looking for This kind of reason excuses oneself.

Fourth, the transmission of inside information is concealed. The method of transmission of inside information is to spread by phone, without texting, and without leaving any written traces. Evidence for information transmission is relatively simple, difficult to obtain, and difficult to fix.

The fifth is to evade the relationship between the information insider and the account. They chose to conduct insider trading with the accounts of classmates and friends that were not easy to be found on the surface and did not see any connections by appointment; they basically did not see the connections in the flow of funds, and even if they had contacts, they borrowed other people’s bank accounts instead of using themselves. Real-name accounts require multiple levels of tracing to be able to find out the relationship among them.

Case IV. Insider Trading Case of the Reorganizing Party-Huang Guangyu Case

In July 2006, Huang Guangyu invested in Zhongguancun with his subsidiary Pengtai Investment, holding 29.58% of the shares. After the completion of the acquisition, a series of debt restructuring and asset restructuring were carried out, and Zhongguancun's stock fluctuated sharply. From April 27 to June 27, 2007, Huang Guangyu, as the actual controller and director of Beijing Zhongguancun Technology Development (Holdings) Co., Ltd. (hereinafter referred to as Zhongguancun), decided during the asset replacement process between Zhongguancun and Pengtai Investment He also instructed others to use the stock accounts of 6 people including Long and others under his actual control to buy more than 9.76 million shares of Zhongguancun stock, with a turnover of more than 93.1 million yuan. As of the announcement of the above matters on June 28, the book income of the six stock accounts was more than 3.84 million yuan. From August 13th to September 28th, 2007, during Zhongguancun’s acquisition of the entire equity of Perun Real Estate, Huang Guangyu decided and instructed others to use the stock accounts of 79 people including Cao, which he actually controlled, to accumulatively buy Zhongguancun stocks. More than 104 million shares, with a turnover of more than 1.322 billion yuan. As of the announcement date on May 7, 2008, the book income of 79 stock accounts was more than RMB 306 million.

In October 2008, the China Securities Regulatory Commission transferred the case to the Ministry of Public Security. In November, the Beijing Municipal Public Security Bureau filed the case for investigation. In May 2010, the Beijing Second Intermediate People’s Court pronounced a sentence of first instance: Huang Mou was sentenced to 9 years in prison for insider trading crimes and a fine of 600 million yuan, combined with the crime of illegal business operations and bribery by units, and sentenced to 14 years in prison. A fine of 600 million yuan was imposed and 200 million yuan of personal property was confiscated. In August 2010, the Beijing Higher People's Court upheld the first instance verdict on the case.

Case 5. Insider Trading Case of State Organs-Gaochun Ceramics Case

Liu Baochun, former representative of Jiangsu Provincial People's Congress, deputy secretary of Nanjing Municipal Committee of Work and Transportation, and director of Nanjing Economic Commission, participated in the reorganization of Jiangsu Gaochun Ceramics Co., Ltd. on behalf of Nanjing Economic Commission from February to April 2009. During the period, he disclosed undisclosed inside information Informed his wife Chen Qiaoling that they had conspired to buy Gaochun Ceramics' circulating shares during the price-sensitive period. After the information was disclosed, the profit was nearly 7.5 million yuan after the disposal.

In September 2009, the China Securities Regulatory Commission transferred the insider trading case of Liu Baochun and Chen Qiaoling to the public security agency for investigation. On December 30, 2010, the Nantong Intermediate Court made a first-instance judgment. Liu Baochun, the former director of the Nanjing Economic Commission, was guilty of insider trading and sentenced to 5 years in prison, confiscated 7,499,500 yuan of illegal income and fined 7.5 million yuan. His wife, Chen Qiaoling, committed insider trading. The crime of trading is exempt from criminal punishment because it is an accomplice.

As a government employee, Liu Baochun participated in the reorganization of listed companies. He obtained inside information because of his job duties and was an insider. Before the reorganization information was disclosed, Liu Baochun not only leaked the information to his wife, but the two used the inside information to engage in securities Trading, its behavior not only violated the provisions of the Securities Law on not allowing insider information to be disclosed and not trading inside information, but also violated the Criminal Law, and was ultimately severely punished by the law for the crime of insider trading. This case is the first case in the country where a state agency personnel involved in insider trading was criminally held accountable.

Case VI. Fund Manager "Mouse Warehouse" Case-Han Gang Case

During Han Gang's position as Investment Fund Manager of Great Wall Jiufu Securities on January 6, 2009, he used the convenience of his position and obtained fund investment decision information to jointly operate accounts opened by his relatives with others, prior to or simultaneously with Han Gang. The Jiufu Fund under management buys or sells related stocks; or buys and sells related stocks during the position of Jiufu Fund to make illegal profits. The China Securities Regulatory Commission referred Han Gang to the public security organs for investigation on suspicion of using undisclosed information transactions. In January 2011, the Shenzhen Futian District Court issued a public judgment. Han Gang was sentenced to one year in prison and fined 310,000 yuan for the crime of trading in undisclosed information. The stolen money was 303274.46 yuan to be confiscated. This case became the first case in my country where fund practitioners were held criminally responsible for illegal transactions using undisclosed information.

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