Controlled 75 account trading, reversed losses of 160 million, and was fined 2 million! Exposure of stock price manipulation by the original controlling shareholder of a listed company: Wang Chunfang | Funds | Listed Company
Former executives of Fengxing Corporation led the way in manipulating stock prices, and now there is a contemporary Eastern original controller who committed crimes against the wind, resulting in a huge loss of 160 million yuan and a fine of 2 million yuan.
On August 2, an administrative penalty decision was released on the official website of the China Securities Regulatory Commission. From August 23, 2017 to August 15, 2018, Wang Chunfang, the actual controller of Contemporary Oriental, controlled the use of 49 trust accounts, including the Huaxin International Trust Co., Ltd. Huaxin Trust · Huasheng 83 Collective Fund Trust Plan, and 26 personal accounts, totaling 75 securities accounts, including Yang Moujuan. Through the advantages of centralized funds and shareholding, Wang Chunfang continuously bought and sold 305 million shares of Contemporary Oriental's stock, with a total amount of 4.116 billion yuan, and manipulated the stock price through reverse trading and other methods; Actively buying and trading 248 million shares, with a total amount of 3.346 billion yuan; Selling 188 million shares with a total amount of 2.35 billion yuan; Trading 62086400 shares with a total amount of 860 million yuan between securities accounts under one's actual control.
But after a series of operations, the final account group suffered a loss of 156 million yuan. According to the relevant provisions of the Securities Law, the China Securities Regulatory Commission has decided to impose a fine of 2 million yuan on Wang Chunfang.
Contemporary Dongfang Yuan's actual controller manipulates stock prices
On August 2nd, an administrative penalty decision was released on the official website of the China Securities Regulatory Commission (CSRC), which showed that the CSRC had launched an investigation and trial into the delisted contemporary Oriental's former controlling shareholder, Wang Chunfang, for manipulating the company's stock prices. The CSRC also heard the statements and defenses of Wang Chunfang and her agents. The investigation and trial of the case have now been concluded.
He contacted Chen Mouming, Chairman and General Manager of Qianhai Guoan Fund Management Co., Ltd., through Wang Mouhong, to borrow securities accounts for trading with Contemporary Oriental, and Chen Mouming found securities accounts and allocated funds. In addition to providing Wang Chunfang with securities accounts and allocation funds through Guoan Fund, Chen Ming provided Wang Chunfang with securities accounts and allocation funds through Shanghai Caize Asset Management Co., Ltd., Jiang Mouping, and Liu. Wang Chunfang paid the margin to Guoan Fund and was then paid by Guoan Fund to various allocation intermediaries and individuals.
After investigation, from August 23, 2017 to August 15, 2018, Wang Chunfang controlled the use of 49 trust accounts including Huaxin International Trust Co., Ltd. Huaxin Trust · Huasheng 83 Collective Fund Trust Plan and 26 personal accounts including Yang Moujuan for securities trading, totaling 75 securities accounts. 70 securities accounts, including Huasheng No. 83 Everbright Securities account, were controlled and used throughout the entire manipulation period; Jin Moulan's CITIC Securities account and five other securities accounts were controlled for use from August 23, 2017 to June 4, 2018.
During the manipulation period, Wang Chunfang controlled the use of account groups to continuously buy and sell through centralized fund advantages and shareholding advantages, and adopted counter trading and other methods to manipulate the price of contemporary Oriental stocks, buying and selling 305 million shares continuously, with a total amount of 4.116 billion yuan; Actively buying and trading 248 million shares, with a total amount of 3.346 billion yuan; Selling 188 million shares with a total amount of 2.35 billion yuan; Trading 62086400 shares with a total amount of 860 million yuan between securities accounts under one's actual control. But in the end, the account group suffered a loss of 156 million yuan.
Fined 2 million
The administrative penalty decision shows that Wang Chunfang has continuously bought and sold through the advantages of concentrated funds and shareholding. From August 23, 2017 to August 15, 2018, Contemporary Oriental had 170 trading days, and the account group had transactions in 136 of them, accounting for 80%. The account group holds more than 5% of the shares within 152 days, more than 10% within 126 days, more than 20% within 89 days, and more than 30% within 69 days. The account group accounts for over 20% of market transactions within 50 days, over 30% of market transactions within 35 days, over 40% of market transactions within 24 days, over 50% of market transactions within 11 days, and over 60% of market transactions within 7 days. The account group actively buys over 50% of transactions within 90 days, over 60% within 83 days, over 70% within 77 days, over 80% within 58 days, over 90% within 39 days, and 100% within 7 days.
At the same time, Wang Chunfang conducted securities trading between the accounts he actually controlled. Wang Chunfang has 45 days of trading between securities accounts under her actual control, of which 15 days account for more than 10% of market transactions between securities accounts under her actual control, 9 days account for more than 20% of market transactions between securities accounts under her actual control, 4 days account for more than 30% of market transactions between securities accounts under her actual control, 1 day account for more than 40% of market transactions between securities accounts under her actual control, and the highest daily trading between securities accounts under her actual control accounts accounts for 43.9% of market transactions.
Manipulative behavior has a significant impact on contemporary Eastern stock prices. From August 23, 2017 to August 15, 2018, the stock price of Contemporary Oriental rose from 11.31 yuan to 22.48 yuan, an increase of 98.76%. On August 2, 2018, the account group sold its holdings, causing the stock price of Contemporary Oriental to decline continuously. On August 15, 2018, the stock price of Contemporary Oriental was 6.8 yuan, a decrease of 69.75% from the highest price and 39.87% from the initial price.
The China Securities Regulatory Commission believes that Wang Chunfang's control over the use of 75 securities accounts, including Huasheng No. 83, to trade with Contemporary Oriental is clear in facts and sufficient in evidence. The China Securities Regulatory Commission (CSRC) does not determine the account control relationship based on a single subjective and objective evidence. Multidimensional evidence such as fund association, transaction address association, transaction equipment association, agreement form, and transaction characteristics, as well as verbal evidence identified by multiple individuals, are mutually corroborating and sufficient to prove that Wang Chunfang controls the use of account group transactions in contemporary Oriental.
According to Article 203 of the Securities Law of 2005, the China Securities Regulatory Commission has decided to impose a fine of 2 million yuan on Wang Chunfang.
Strictly crack down on market manipulation and other behaviors through regulation
Manipulation of the market and insider trading seriously disrupt the order of market transactions, interfere with the functioning of the market, and seriously infringe on the legitimate rights and interests of investors. They are a stubborn disease that affects the healthy development of the securities market and have always been the focus of the China Securities Regulatory Commission's strict crackdown on inspections and law enforcement.
According to data previously released by the China Securities Regulatory Commission, 603 cases were handled in 2022, 136 major cases were handled, and 123 suspected criminal cases and notification clues were transferred to public security organs, with a case verification rate of 90%.
Among them, 78 cases of market manipulation were handled in 2022, a year-on-year decrease of 30%, and the number of cases has been decreasing year by year. According to the China Securities Regulatory Commission, although the total number of market manipulation cases has decreased, the characteristics of organization and organization are becoming more obvious.
One issue is that the phenomenon of insiders of listed companies colluding to manipulate gangs and hype up the company's stock price still exists. Throughout the year, more than ten listed companies were investigated for cases of collusion and manipulation of the market by actual controllers and executives, both internally and externally. Some signed fake "market value management" agreements with manipulation groups and provided personnel, funds, and securities accounts to participate in the manipulation; Some organizations have multiple trading teams that use methods such as inversion and false reporting to drive up and maintain the company's stock price, and agree on profit sharing.
The second is to use new modes and technologies to increase the concealment of manipulative behavior. Some use the linkage between the stock market, over-the-counter market, and derivatives to manipulate and illegally profit over 100 million yuan. Some collude with the stock market's "black mouth" and use live streaming rooms, WeChat groups, and other methods to lure investors into buying in a concentrated manner, taking the opportunity to sell in the opposite direction for profit. Some use cloud servers, virtual servers and other new Internet technologies to hide transaction subjects and interfere with case investigation.
Thirdly, the issue of habitual offenders and recidivists remains prominent. Some illegal entities involved in market manipulation have been investigated and punished by the China Securities Regulatory Commission or transferred to public security organs. Some have continued to organize others to carry out manipulation during the period of bail pending trial, while others have colluded with multiple recidivists and committed frequent cross crimes.
In addition, 170 insider trading cases were handled in 2022, a year-on-year decrease of 15%. However, the market habit of "profiting from stock trading through internal information" has not been eradicated, and major events such as mergers and acquisitions and changes in actual controllers are still high incidence areas for insider trading.
From the perspective of the amount involved, some cases have significant amounts of illegal transactions. Some listed companies use multiple accounts of others to carry out insider trading, with a transaction amount of hundreds of millions of yuan. Some individuals involved in the case had close contact with insiders and bought related stocks for nearly 100 million yuan before the information was released.
From the perspective of the involved parties, insiders still account for 40% of direct transactions. Some directors of listed companies purchase relevant stocks after learning that the company is planning a major restructuring, and sell them for profit after information disclosure. Some executives of listed company subsidiaries are aware that the company will make significant investments and use their own and spouse's accounts for insider trading profits.
From the perspective of trading behavior, insider trading "nest cases" and loss avoidance trading often occur. Some executives of state-owned enterprises take advantage of their positions to repeatedly probe major information of listed companies and collude with others for insider trading. Some executives of listed companies sell stocks to avoid losses before the company discloses significant pre loss information or the actual controller is subject to criminal enforcement measures.
The China Securities Regulatory Commission (CSRC) stated that it will resolutely implement the "zero tolerance" work policy, based on the overall regulatory situation of preventing and resolving financial risks and protecting the legitimate rights and interests of investors, closely monitor market dynamics, closely monitor account linkage, closely monitor abnormal transactions, and strictly investigate and deal with market manipulation and insider trading in accordance with laws and regulations, continuously purify the market ecosystem, and provide strong legal guarantees for the high-quality development of the capital market.
