Insider Trading Leads to Investigations and Penalties for Executives at Several Listed Companies
Overnight, several more executives of listed companies have been implicated in insider trading.
Yujing Shares (002943.SZ) announced in the evening of October 15th that the company's deputy general manager, Zhu Haoyu, is under investigation by the China Securities Regulatory Commission (CSRC) for suspected insider trading. The company stated that the investigation is specifically targeting Zhu Haoyu's personal trading of other companies' stocks and does not involve the company's own shares.
On October 16th, when a journalist contacted Yujing Shares as an investor, a representative from the company's securities department confirmed: "Based on the information we have and after consulting with him (Zhu Haoyu), this is an investigation targeting him personally and has no relation to the company or its stock."
In addition to the new cases being filed, there are company executives who have been confirmed to have engaged in insider trading and have received penalties. On the evening of the 15th, the Gansu Securities Regulatory Bureau disclosed three penalties targeting three executives and one family member of Qihuang Technology for insider trading involving *ST Tongda. According to the disclosure, the company's chairman, Guo Yongzhong, and three others violated regulations by purchasing *ST Tongda shares, resulting in a total loss of nearly 260,000 yuan, and were ultimately fined a combined total of 2.2 million yuan.
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Qihuang Technology had just been listed on the New Third Board in mid-September this year. Last year, in an effort to mitigate the risk of delisting and to preserve its market status, the desperate *ST Tongda "targeted" Qihuang Technology, intending to acquire it, but the transaction lasted only two months before it was hastily terminated, and *ST Tongda was delisted in June of this year.
According to an incomplete tally by Yicai, since the third quarter of this year, executives from companies such as Yongjin Shares, Xinlai Materials, and Longping High-Tech have also been investigated or penalized, all due to insider trading incidents.
Another executive at Yujing Shares is implicated in insider trading.
The day after the news of the executive being investigated was disclosed, on October 16th, Yujing Shares closed at 20.36 yuan per share, up 1.04%.
Yujing Shares mentioned in its announcement that the current investigation is specifically targeting Zhu Haoyu's personal trading of other companies' stocks and does not involve the trading of the company's own shares. Currently, all of the company's production and business operations are proceeding normally and orderly.
Prior to this, in April of this year, the company's independent director received a penalty for his spouse's short-term trading of the company's shares.The Hunan Securities Regulatory Bureau issued a warning letter to Jiang Yunhui, an independent director of Yujing Shares, on April 29. Upon investigation, it was found that Jiang Yunhui's spouse, Sun Sa Hua, sold 1,600 shares of Yujing Shares through a centralized bidding method on September 27 last year, and then sold 10,000 shares on February 6 this year, constituting short-term trading.
According to Yujing Shares' disclosure, Sun Sa Hua made a profit of 22,700 yuan through the above short-term trading, and as of the end of April, the above profits have been fully returned to the company. The company also mentioned that after verification, Jiang Yunhui was unaware of the above situation, there was no transaction of the company's stocks due to knowledge of insider information, and there was no situation of seeking benefits by using insider information, and there was no subjective intention to violate regulations.
Data shows that Jiang Yunhui has served as an independent director of Yujing Shares since May 2021, and his term will end on May 19 this year.
Several executives of Qianghuang Technology were punished for insider trading.
Also due to insider trading, several executives of Qianghuang Technology, which has only been listed on the New Third Board for a month, were punished.
In September last year, Qianghuang Technology was "selected" by *ST Tongda, which wanted to achieve shell preservation by acquiring the former, but the transaction only lasted for two months and then failed.
The penalty notice from the Gansu Securities Regulatory Bureau this time revealed the "hidden corner" of this acquisition case - Guo Yongzhong, chairman of Qianghuang Technology, and three others, bought *ST Tongda stocks during the sensitive period of insider information when the above acquisition case was underway, with a total loss of 259,900 yuan. Among them, Yang Zhaojun, the company's executive general manager, and Xu Huaguo, the company's secretary, lost 12,400 yuan and 96,300 yuan respectively, and Guo Yongzhong and Sun Hongwei lost a total of 151,200 yuan.
In the end, the Gansu Securities Regulatory Bureau fined Yang Zhaojun and Xu Huaguo 500,000 yuan and 600,000 yuan respectively; Guo Yongzhong and Sun Hongwei were fined 500,000 yuan and 600,000 yuan respectively. The above fines total 2.2 million yuan.
Regulation severely cracks down on insider trading.
This year, the regulation has continued to maintain high pressure on the investigation of insider trading.According to incomplete statistics, since the third quarter of this year, senior executives of companies such as Yongjin Shares, Xinlai Materials, and Longping High-Tech have been investigated for suspected insider trading or have received penalties as a result.
Yongjin Shares announced on August 2 that the company's actual controller, Cao Peifeng, received a notice of investigation from the China Securities Regulatory Commission (CSRC), which decided to investigate her for suspected insider trading and short-term trading.
The case of multiple senior executives of Xinlai Materials suspected of insider trading finally resulted in penalties, two and a half years after the relevant parties were investigated.
The company announced on August 20 that the actual controller, Li Shuibo, and four related responsible persons were fined a total of approximately 7.67 million yuan by the Jiangsu Securities Regulatory Bureau for insider trading in the company's stocks.
The former secretary of Longping High-Tech traded 20,000 yuan in insider trading and was fined more than 2 million yuan.
At the end of September, the Hunan Securities Regulatory Bureau disclosed that Chen Miao, the former secretary of Longping High-Tech, controlled the securities account of a university classmate "Zhu Mouyuan" to buy Longping High-Tech stocks during the sensitive period of insider information, making a profit of 20,100 yuan, which constituted insider trading.
During the hearing process, Chen Miao proposed defense opinions such as "the penalty is excessively severe." Ultimately, the Hunan Securities Regulatory Bureau decided to confiscate his illegal income and impose a fine of 2 million yuan, with a total penalty of about 2.02 million yuan.
In terms of regulation, this year, the regulatory authorities have continued to maintain a high-pressure stance against insider trading and have made relevant statements.
In mid-August, when the CSRC reported on the administrative law enforcement situation in the first half of the year, it stated that it has been comprehensively cracking down on market manipulation, insider trading, and other trading-related violations, helping to maintain the normal functioning of the market's pricing function.
The CSRC mentioned that insider trading behavior steals the profit opportunities that belong to the vast number of investors by obtaining information in advance, and it resolutely "strikes hard" to punish such behavior."In the first half of this year, some insider trading cases have shown a 'nester case' characteristic, meaning that during the formation and transmission of insider information, multiple entities such as internal employees of listed companies and related parties illegally obtained the information and engaged in insider trading," the China Securities Regulatory Commission (CSRC) mentioned.