Or facing imprisonment, the China Securities Regulatory Commission will announce a penalty decision of 20000 words! This first generation shareholder fell into the market | Punishment | China Securities Regulatory Commission
The China Securities Regulatory Commission (CSRC) recently released a penalty decision of 20000 words, in which the numerous "crimes" of market manipulation come from a prominent figure who has been fighting in the A-share market for more than 30 years - Ren Liangcheng.
Ren Liangcheng has many identities. He was one of the earliest stock market investors in China and the founder of the well-known private equity firm Shanghai Renxing Investment Management Co., Ltd. He was once the person with the most collection of stock subscription certificates for listed companies and the director of the "China Stock Museum". Now he has a new identity - he has been investigated 5 times and punished 4 times by the China Securities Regulatory Commission for manipulating the market, and has been punished three times, banned for life, and criminally responsible.
Since the 1990s, the stock market has flourished in Shanghai and Shenzhen, and the first generation of Chinese "investors" have been fighting to the south and north. Since then, Ren Liangcheng has also seen opportunities to make money in the stock market and devoted himself wholeheartedly to the securities market.
In 2003, Ren Liangcheng invested in the establishment of the "China Stock Museum". To this day, in the "Director's Introduction" section of the museum's website, one can still see his thirty year journey in the stock market - "From 2005 to 2007, he saw the unprecedented bull market in the Chinese securities market, established an investment management company in Shanghai to cooperate with various institutions, and acquired a large number of financial corporate stocks such as banks, securities, and insurance, achieving great success.".
However, his introduction ends with the following sentence: "From 2009 to 2010, he once again focused on the arbitrage project of unlocking stocks in listed companies and is leading his team on a journey to the north and south."
And this is precisely the beginning of his career in manipulating the market.
Manipulating huge losses during the 2015 stock market crash
Since 2011, Ren Liangcheng has been buying stocks through bulk trading, and then manipulating stock prices and selling for profits in the secondary market. He has been manipulating stocks continuously for 7 years, with an annual trading amount exceeding 200 billion yuan.
In addition, this time, Ren Liangcheng has been punished by regulatory authorities four times, from "one fine for no one", "two fines for no one", "three fines for no one", to this time's "three fines for no one", lifetime ban, and criminal accountability ", leading to the" three piece set "of punishment for market manipulation.
Ren Liangcheng's punishment this time is due to his manipulative behavior from April 2015 to October 2017. During this period, he controlled over 200 accounts under the names of 123 people scattered across the country, and manipulated 16 stocks with over 10 billion yuan of funds. However, he was fortunate enough to catch the last bus of the "bull market" and also experienced a stalling decline throughout the "stock crash", losing nearly 80 million yuan in just one stock, "Guirenniao". The initial profit of 276 million yuan was also fully invested during the stock market crash, with an additional 23 million yuan retroactively invested.
The stock that made Ren Liangcheng profit the most was "Jiugang Hongxing". On June 12, 2015, the Shanghai Composite Index peaked at 5178.19 points, and Ren Liangcheng manipulated "Jiugang Hongxing" during the rapid peak stage of the market.
From April 13 to May 14, 2015, he controlled the centralized fund advantage of his account group to continuously buy and sell "Jiugang Hongxing". During this period, the bidding buying transaction amount reached 4.172 billion yuan, the block buying transaction amount reached 3.863 billion yuan, and the final bidding selling transaction amount reached 8.251 billion yuan. The manipulation profit of a single stock exceeded 200 million yuan.
The reporter from First Financial News learned that this case was jointly handled by the inspection department of the China Securities Regulatory Commission and the public security. In this batch of cases, Ren Liangcheng's biggest profit was in the manipulation of "Jiugang Hongxing" case, which was held criminally responsible separately. Currently, the first instance judgment has been made.
The total loss does not affect the individual punishment. According to the penalty decision issued by the China Securities Regulatory Commission, in addition to "Jiugang Hongxing", Ren Liangcheng was fined three times for each violation, with illegal gains of 74.1394 million yuan confiscated and a fine of 222 million yuan imposed.
It is worth noting that Ren Liangcheng has made significant profits in this bull market. He manipulated profits of nearly 100 million yuan from April to December 2014, but the case had already been punished before.
Bulk low-priced takeover, driving up bidding and selling
At the same time as being fined three for each violation, Ren Liangcheng was also banned from the securities market for life. Such strict punishment is because he has long been a habitual offender in the capital market.
Ren Liangcheng was first punished by regulatory authorities in December 2015. At that time, his manipulation of the number of accounts, stocks, and amounts was relatively small, but his manipulation model had already matured. Moreover, when the China Securities Regulatory Commission intervened in the investigation in February 2013, he had new manipulations in September of the same year.
At that time, his technique was relatively simple. The first type is represented by "Heshun Electric". In November 2011, he began manipulating "Heshun Electric" by buying related stocks at high prices and large orders during the closing stage of bulk trading, and selling them the next day, earning a profit of several hundred thousand yuan per stock.
The logic behind this has been explained by Ren Liangcheng himself: "We hope to have a high closing price on that day. Sometimes, we use other accounts outside the bulk trading account to buy the stock at the closing stage on the day of bulk trading, pulling the price. The stocks we have operated on include 'Shagang Shares' and' Jifeng Agricultural Machinery '... If we buy at the end of the day, it will have a significant impact on the inertia of the stock price, and the buying cost will not be too high. It will not fall below my financing cost, nor will there be a liquidation, because my goal is to sell the stock smoothly, not to actually buy the stock."
The "Ovi Communication" he manipulated in September 2013 belongs to the second category. He buys stocks through bulk trading platforms and sells them all within the following day or two. There are two trading methods for selling stocks in the secondary market: one is to use a portion of accounts to frequently declare purchases at prices higher than the market price, and then withdraw all orders within 4 to 6 seconds, while using another portion of accounts to sell the stock in large quantities; Another approach is to declare a large number of purchases at prices lower than the market price, creating a false impression of a surge in buying demand. After the purchase reaches the first level or the selling transaction is basically completed on the same day, all orders for that part of the buying order are cancelled. Ren Liangcheng combined these two methods to successfully sell bulk trading stocks in the secondary market.
In response to the investigation, he explained, "For stocks with large volumes and difficulties in selling, I will take appropriate protective measures based on the stock trend on the day of sale. Before the last investigation by the China Securities Regulatory Commission, our protective measures were partially carried out by raising the stock price at the end of the trading day, keeping it at a higher level to ensure smooth shipment the next day. Due to the lessons learned from the previous investigation, our protective measures have changed since April 2013. Some stocks were pulled up during the trading day, sometimes through false buying, and sometimes through real buying, in order to ensure that the cost is not lower than mine."
The above case is the first time Ren Liangcheng has been punished for manipulation. In December 2015, the China Securities Regulatory Commission imposed a "fine of one for each violation" on him, confiscating illegal gains of 18.2851 million yuan and imposing a fine of 18.2851 million yuan.
The China Securities Regulatory Commission strongly condemns "unrepentant behavior and reckless behavior"
In the face of multiple regulatory actions, Ren Liangcheng's manipulative behavior has intensified. Not only has he controlled a larger scale of funds and manipulated more stocks, but he has also evaded regulatory investigations through account diversification and trading secrecy.
From April to December 2014, the market began a rapid rise from mid year onwards. During this period, Ren Liangcheng bought 16 stocks through bulk trading. Before or after the bulk trading day, he controlled the use of dozens of securities accounts provided by employees and financing parties. During the trading day, he used methods such as high price declaration and cancellation of declaration to cause significant increases in stock prices, and sold them the next day or a few days after the bulk trading day.
In November 2016, the China Securities Regulatory Commission imposed penalties on this batch of cases, confiscating more than RMB 999.9 million of the illegal gains obtained by Ren Liangcheng, and imposing a double fine. The total amount of fines was nearly RMB 300 million.
The accounts manipulated by Ren Liangcheng are scattered, with a large number of stocks and secretive trading practices. In the penalty documents issued by the China Securities Regulatory Commission at different time points, the time span of manipulating individual stocks may even overlap. For example, in the 2023 penalty book, it was mentioned that Ren Liangcheng manipulated "Guangyu Development" to gain more than 13 million yuan in December 2015, while in the 2018 penalty book, it was mentioned that Ren Liangcheng manipulated "HNA Holdings" to lose 317900 yuan during the same period.
According to the 2018 penalty letter from the China Securities Regulatory Commission, Ren Liangcheng and Ren Liangbin controlled 11 accounts and manipulated 6 stocks from December 8, 2015 to April 11, 2016, resulting in a total profit of 7.53 million yuan. They were ultimately fined three for each transaction.
In the latest punishment, it was revealed that there were as many as 200 accounts under its control, with funds amounting to billions.
The China Securities Regulatory Commission strongly condemned Ren Liangcheng in the penalty letter. "The party involved, Ren Liangcheng, engaged in stock manipulation for a long time, manipulated many stocks, and involved a large amount of money, which has seriously disrupted the order of the securities market and caused serious social impact. Ren Liangcheng has been administratively punished three times by the China Securities Regulatory Commission, and is currently being prosecuted for suspected securities market manipulation crimes. The court's first instance criminal judgment has determined that he constitutes the crime of manipulating the securities market. The China Securities Regulatory Commission stated that Ren Liangcheng is a typical case of unrepentant and reckless behavior, and his behavior is particularly heinous, and he should be severely punished in accordance with the law.".
Ren Liangcheng was born in 1958 and has been involved in the securities market since 1991. He has been investing in stocks for over 30 years and has been trading stocks in bulk for nearly 10 years. He claimed in the relevant introduction that the annual transaction volume is as high as 200 billion to 500 billion yuan, and he pays stamp duty and commissions of over 200 million yuan annually.
However, today, he was not only fined by the China Securities Regulatory Commission and banned from the market for life, but also may face imprisonment for criminal offenses related to manipulating the securities market. As the first generation of investors in the A-share market, the turbulent years of the past will also come to an end.
