Being fined 146 million yuan, two "80s generation" failed! Manipulating securities market trading | Randy Group | Two

China Fund News Dawn

Another major case of market manipulation has been exposed!

Recently, an administrative penalty decision was updated on the official website of the China Securities Regulatory Commission, which showed that two "80s generation" controlled the use of 46 accounts to manipulate the stock "Langdi Group". They manipulated the stock price through continuous buying and selling, counter trading, false reporting, and other methods, earning a profit of 48.8 million yuan in just 5 months.

For the market manipulation behavior of the two individuals, the China Securities Regulatory Commission ultimately imposed a fine of 48.8 million yuan for illegal gains and a fine of 97.61 million yuan, with a total fine of 146 million yuan.

Take a look at the details——

Profit of 48.8 million in 5 months

Firstly, let's review the process of Zhou and Han manipulating the "Langdi Group":

After investigation, from November 4th, 2019 to April 7th, 2020. Zhou and Han controlled the use of 46 securities accounts and adopted various measures to influence the trading price and volume of "Langdi Group", resulting in a total profit of 48.8 million yuan.

From the perspective of the stock price during the "Landi Group" period, the two of them were quite patient and decisive in their approach: November 4, 2019 to January 23, 2020 was the period for building positions, February 3 to February 14, 2020 was the period for boosting prices, and February 17 to April 7, 2020 was the period for shipping. During the manipulation period, there were a total of 104 trading days, of which 93 trading days were conducted.

During the manipulation period, the two person account group bid to buy 36.6 million shares, with a transaction amount of 579 million yuan. There were 44 trading days where the buying volume accounted for more than 10% of the total market volume. Ranked first in 47 trading days of buying volume.

During the bullish period from February 3 to February 14, 2020, the account group accounted for an average of 71.81% of the total same direction purchase volume of the account group at a price not lower than the market price, and the average market purchase volume of the account group during the same period accounted for 25.76%.

During the shipment phase, the relevant accounts sold 36.6 million shares through bidding, with a transaction amount of 629 million yuan. The sales volume ranked first in 45 trading days. From February 3 to March 13, 2020, the proportion of outstanding shares held by the account group was over 5%, reaching a maximum of 7.52%, indicating a clear advantage in funding and shareholding.

In terms of manipulation techniques, the two of them are quite typical, mainly relying on continuous buying and selling in the market to drive up prices, counter trading, false declarations, etc., with obvious manipulative intentions.

The China Securities Regulatory Commission believes that the above-mentioned actions of Zhou and Han constitute market manipulation. Among them, Zhou organized the planning and implementation of transactions, playing a major role; Han Moulong played a secondary role in contacting the borrowing account, signing the allocation agreement, and coordinating specific transactions under Zhou Mou's arrangement.

Total fine of 146 million yuan

Similar to the parties involved in previous major market manipulation cases, the parties involved in this case have also raised their defense opinions, believing that the relevant actions are not manipulating stock prices, and that the so-called advantages of funds and shareholding, as well as contrarian trading and false declarations, are unfounded. In addition, Han Moulong believes that he is not a participant in the case.

In this regard, the China Securities Regulatory Commission believes that the inquiry records of Zhou himself and relevant personnel, as well as the chat records of Zhou's WeChat group, all show that Zhou has a subjective intention to manipulate the "Langdi Group"; According to the data of the account group trading "Langdi Group", the account group has shareholding and funding advantages, and implements various methods such as continuous buying and selling, false declaration, and reverse trading to affect the stock price, resulting in a significant deviation of Langdi Group's stock price from market trends. Therefore, related trading activities constitute manipulation of the securities market.

Regarding whether Han Moulong belongs to the joint illegal subject of manipulative behavior, the China Securities Regulatory Commission pointed out that the evidence in the case shows that Han Moulong was responsible for contacting the borrowing account, signing the allocation agreement, and specifically coordinating transactions in this case. In the WeChat group where Zhou issued trading instructions, Zhou's instructions clearly had the intention of manipulating the market. Han Moulong, even though he knew that Zhou's behavior was manipulating the securities market, still carried out assistance actions based on his instructions, and should be recognized as a joint illegal entity.

Based on this, the China Securities Regulatory Commission has finally decided to confiscate the illegal gains of 48.8 million yuan from Zhou and Han, and impose a fine of 97.61 million yuan, including a fine of 92.73 million yuan on Zhou and a fine of 4.88 million yuan on Han.

It is worth noting that Zhou and Han Long have appeared in the capital market. In October 2017, Houyang Holdings, a company listed on the New Third Board, was acquired by Zhou. Houyang Holdings mainly engages in private equity investment and consulting services. At that time, according to information disclosure announcements, Zhou held equity in multiple companies including Shanghai Mousheng Asset Management Co., Ltd. and Shanghai Hanying Asset Management Co., Ltd. Han Moulong was the legal representative of Shanghai Hanying Asset Management Co., Ltd.

After the acquisition was completed, Zhou became the chairman of Houyang Holdings, and Han Moulong was also elected as a director. In February 2018, Houyang Holdings changed its name and securities abbreviation to "Yisheng Shares", and its main business was changed to long-term rental apartments. In March of this year, ST Yisheng terminated its listing on the New Third Board.

Multiple major cases of market manipulation have been announced

Recently, the China Securities Regulatory Commission has successively announced multiple administrative penalties for market manipulation. For example, an administrative penalty case released by the China Securities Regulatory Commission on August 2 showed that from August 2017 to August 2018, Wang Chunfang, the former actual controller of Contemporary Oriental, controlled the use of 75 securities accounts, continuously bought and sold through centralized fund advantages and shareholding advantages, and manipulated the stock price of Contemporary Oriental through reverse trading and other methods. In the end, Wang Chunfang suffered a loss of 156 million yuan and was fined 2 million yuan by the China Securities Regulatory Commission.

In addition, another administrative penalty decision recently updated by the China Securities Regulatory Commission shows that five "post-80s" individuals controlled 115 securities accounts to manipulate the stock price of "Fengxing Shares", resulting in a cumulative loss of 304 million yuan. Among them, Li Weiwei, the well-known "number one trader in North China" in the market, was fined a total of 3 million yuan due to his manipulation behavior that did not profit.

In June of this year, Ren Liang, the director of the China Stock Museum, controlled 201 accounts and manipulated 16 stocks. He was fined by the China Securities Regulatory Commission for confiscating approximately 74 million yuan in illegal gains and imposing a fine of 222 million yuan.

At the end of March this year, the China Securities Regulatory Commission reported on the construction of a rule of law government in 2022. It is shown that in 2023, the China Securities Regulatory Commission will focus on shaping the market order and ecology after the comprehensive implementation of the registration system, further strengthening the organic connection between daily supervision, inspection and punishment, improving the efficiency of clue discovery and case handling, concentrating efforts to investigate major cases of market concern and malicious nature such as fraudulent issuance, financial fraud, market manipulation, insider trading, etc., in order to create a standardized, transparent, open, dynamic, and resilient capital market, and provide strong legal protection for the high-quality development of the capital market.

Reviewed by: Xu Wen

Copyright Statement

The China Fund News has the copyright to the original content published on this platform, and unauthorized reproduction is prohibited. Otherwise, legal responsibility will be pursued.

Authorized reprint of cooperative contact person: Mr. Yu

Tonight, it's boiling