Jimu News reporter Xu Wei Recently, the China Securities Regulatory Commission disclosed an "Administrative Punishment Decision" (hereinafter referred to as the "Decision") regarding Fujian stockholder Wang Baoyuan.

After Daqing Huake's stock price rose sharply, Wang Baoyuan began shipping on September 3, selling all 6,896,423 shares, with a cumulative net sales amount of 133,598,990.80 yuan. Within the next two months, Wang Baoyuan conducted a second round of manipulation, buying 7,319,797 shares again, with a cumulative net purchase amount of 106,195,868.73 yuan. After clearing the positions, the net sale amount was 158,846,074.21 yuan. Through two manipulations, Wang Baoyuan made a total profit of 79,556,817.65 yuan.

Among them, two rounds of operations were carried out on Wang Baoyuan of the "Jilin Expressway". From February 3 to March 11, 2020, Wang Baoyuan controlled the use of 24 accounts, concentrated on capital advantages and continued to buy and sell, affecting the "Jilin Expressway" stock trading price and trading volume, making a profit of 13.027 million yuan; from May 28 to June 15, 2020, Wang Baoyuan once again controlled the use of 32 accounts, using various means to affect the "Jilin Expressway" stock trading price and trading volume, making a profit of 2.0467 million yuan.

The China Securities Regulatory Commission believed that Wang Baoyuan’s relevant behavior violated the provisions of Article 55, Paragraph 1, Item 1 and 3 of the Securities Law, and constituted the act of “manipulating the securities market” as described in Article 192 of the Securities Law. It decided to confiscate Wang Baoyuan’s illegal income of 142,690,148.86 yuan and impose a fine of 428,070,446.58 yuan.

It is also illegal for investors to lend their own securities accounts.

Reporters noted that according to the "Decision Letter", during the hearing process, Wang Yuanbao and his agent made four defense points: "the account control was determined incorrectly", "the transaction involved was minor and the degree of social harm was relatively small", "the profit amount was determined incorrectly and should be corrected in accordance with the law" and "the penalty was too severe". They requested that no administrative penalty be imposed, or that the punishment be reduced or lighter, but they were all rejected by the China Securities Regulatory Commission.

Wang Yuanbao believes that the CSRC’s “no one penalty, three penalties” this time is too severe. In this regard, the China Securities Regulatory Commission clearly pointed out that the punishment range in this case was appropriate.The Securities Law revised in 2019 has significantly increased the cost of securities violations. According to the provisions of Article 192 of the Securities Law, if there are illegal gains from manipulating the securities market, the illegal gains shall be confiscated and a fine of not less than one time but not more than ten times of the illegal gains shall be imposed. This case comprehensively considered the facts, nature, circumstances, degree of social harm, cooperation with the investigation, illegal gains and other factors of the parties’ illegal acts. It was not inappropriate to impose a fine of three times the illegal gains on the parties. The penalty was equivalent to the excessive penalty.

Pan Helin, co-director and researcher of the Digital Economy and Financial Innovation Research Center of the International Joint Business School of Zhejiang University, said in an interview with a reporter from Jimu News that through high penalties, we can warn against market manipulation and clarify the red lines and bottom lines of supervision, so as to serve as a warning and prevent other market manipulators from making trouble in the capital market. Punishment is a means to maintain a fair trading environment in the market. Increasing the cost of illegal activities can clean up the atmosphere of the securities market and better protect the legitimate rights and interests of ordinary investors, thereby attracting more investors to enter the capital market with a good capital market trading environment.

It is worth noting that in Wang Baoyuan's case, he used capital allocation to borrow other people's accounts for a long time, and actually controlled the use of a large number of other people's accounts. Another warning to investors is that it is also illegal for investors to lend their own securities accounts or borrow other people's securities accounts to engage in securities transactions. According to the reporter's understanding, this year, some brokerages have repeatedly told investors in the investment education information sent to investors "not to lend their own securities accounts or borrow other people's securities accounts to engage in securities transactions."

According to Article 58 of the new "Securities Law", "No unit or individual may violate the regulations by lending its own securities account or borrowing the securities account of others to engage in securities transactions." Article 195 of the new "Securities Law" stipulates that "violating the provisions of Article 58 of this Law, lending its own securities account or borrowing the securities account of others to engage in securities transactions" For transactions, will be ordered to correct , given a warning, and may be fined up to 500,000 yuan. "

(Source: Jimu News)

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