Regulatory action, too bold! Securities firm employees' unlicensed stock recommendation investors | securities | stock recommendation
See "unlicensed stock recommendation" again.
On July 17th, the Hunan Securities Regulatory Bureau ordered First Venture Securities to make corrections, mainly because a former securities broker of the company did not obtain investment advisory qualifications but still recommended stocks to investors. The relevant personnel were also deemed inappropriate by the Securities Regulatory Bureau and were not allowed to engage in brokerage business, securities investment consulting business or actually perform the above-mentioned duties in securities operating institutions for five years.
In recent years, with the development of new media communication, both investment advisers of securities companies and various financial big Vs have successively entered the microblog, Tiktok and Xiaohongshu platforms for large market analysis and individual stock comments.
The China Securities Regulatory Commission has repeatedly reminded investors to choose legal institutions and qualified professionals when receiving investment consulting services.
Recognized as an inappropriate candidate
According to the announcement from the Hunan Securities Regulatory Bureau on July 17th, Lai, the former securities broker of the Changsha Branch of First Entrepreneurship, provided securities investment consulting services to investors through media such as Sina Weibo and WeChat, including market analysis, individual stock reviews, individual stock recommendations, and individual stock buying and selling advice, without registering as a securities investment consultant with the China Securities Industry Association during his employment period, and directly or indirectly obtained unfair economic benefits.
The Hunan Securities Regulatory Bureau believes that the above-mentioned subsidiaries have inadequate compliance control, inadequate supervision of practitioners' professional behavior, failure to timely verify and report illegal and irregular clues, and inadequate implementation of mechanisms such as customer follow-up, commission adjustment, and complaint handling. In response, regulatory measures have been taken to order corrective actions.
The Hunan Securities Regulatory Bureau stated that the Changsha Branch of First Venture Securities should attach great importance, strictly abide by laws and regulations, improve internal controls, standardize employee management, timely fulfill reporting obligations, hold relevant responsible personnel accountable, and submit a written rectification report within one month from the date of receiving this decision. The Hunan Securities Regulatory Bureau will continue to monitor the rectification and accountability of the branch in its daily supervision.
On the same day, the regulatory authorities punished Lai and identified him as an inappropriate candidate. The Hunan Securities Regulatory Bureau stated that within five years from the date of determination as an inappropriate candidate, Mr. Lai shall not engage in brokerage or securities investment consulting related business or actually perform the above-mentioned duties in securities operating institutions.
According to the relevant provisions of the Regulations on the Supervision and Administration of Securities Companies, securities brokers shall comply with the management regulations of securities company employees, and their actions within the authorized scope of securities companies shall be legally borne by the securities companies in accordance with the law; Securities brokers shall bear corresponding legal responsibilities in accordance with the law for behaviors beyond the scope of authorization.
In addition, according to the relevant provisions of the Interim Measures for the Administration of Securities and Futures Investment Consulting, anyone who has not obtained the qualification for securities and futures investment consulting, or has obtained the qualification for securities and futures investment consulting but has not worked at securities and futures investment consulting institutions, shall not engage in securities and futures investment consulting business.
The phenomenon of "unlicensed stock recommendations" continues to persist
The situation of unlicensed employees in securities companies frequently occurs. Securities firms should still increase their efforts in managing the registration, job responsibilities, and professional behavior of their employees.
On May 23rd of this year, Pacific Securities received a decision on administrative regulatory measures from the Yunnan Securities Regulatory Bureau.
It is reported that Pacific Securities has engaged in five major violations in its securities research report business. Among them, the two main issues directly point to the "unlicensed appointment" of analysts. The Yunnan Securities Regulatory Bureau pointed out that five individuals did not obtain analyst qualifications, but released research reports in the name of analysts. Among them, four individuals were registered as "general securities business" with the China Securities Industry Association; One person has neither been registered as a "securities analyst" nor as a "general securities business". Although the compliance review of Pacific Securities had already focused on the qualification issue of a certain employee as a securities analyst on November 8, 2021, the issue remained unresolved as of April 8, 2022.
On April 12, 2021, the Chongqing Securities Regulatory Bureau punished a former employee of the West China Securities Business Department, stating that he had not registered with the China Securities Industry Association as a securities investment advisor. From June to November 2020, he published investment advice on buying and selling specific securities through public media such as Sina Weibo and Xiaohongshu APP.
In fact, in recent years, with the development of the Internet, new media such as Weibo, Station B, Tiktok, Little Red Book have become platforms for investors to understand stock investment and fund investment. However, the financial content on the platform is mixed with good and bad, and some bloggers have numerous errors and omissions in their explanations, which misleads investors. From the above multiple cases, it can also be seen that even platform bloggers from securities firms may not necessarily have investment advisory qualifications.
In April 2021, the veteran investment advisory firm Jufeng Investment was punished by the Shaanxi Securities Regulatory Bureau to suspend the addition of new clients for three months. The local securities regulatory bureau has noticed the phenomenon of "personnel without securities investment advisory qualifications providing securities investment advice to clients" in this institution.
According to previous reminders from the China Securities Regulatory Commission to investors, some unscrupulous individuals usually publish articles on market analysis, free stock recommendations, and other online media such as WeChat and Weibo, establishing the image of "experts" and "financial big Vs" in online stock recommendations, luring investors to join WeChat or QQ groups, recommending stocks to investors and collecting fees under the guise of paying membership fees, opening VIP permission fees, etc. These so-called "experts" do not have the qualification for securities investment consulting practice. There are also criminals who engage in illegal securities investment consulting activities under the guise of selling stock trading training courses, but in reality, they use recommending stocks as bait.
Regulatory authorities remind investors not to trust illegal securities programs and advertisements that exaggerate past performance, directly or indirectly promise returns, or publicly recruit members, such as free stock recommendations and free stock consultations.
Regardless of whether the sales are training courses or trading skills, those who recommend stocks to investors or provide stock investment advice, and directly or indirectly obtain economic benefits, are all engaged in securities investment consulting business.
