Appeal of ex-Everbright Securities executive rejected

Yang Jianbo, former Everbright Securities executive, is suing the China Securities Regulatory Commission after it fined and banned him for life last year from the securities industry for insider trading. [Photo/Xinhua]

The Beijing No 1 Intermediate People's Court on Friday rebutted the appeal of a former Everbright Securities executive against the China Securities Regulatory Commission.

The court said if a party is dissatisfied with the decision, it may have the decision reviewed in the Beijing High People's Court.

Yang Jianbo, former general manager of the strategic transaction department of the Chinese brokerage firm, sued the commission in April at the Beijing No 1 Intermediate People's Court after CSRC fined and banned him for life last year from the securities industry for insider trading.

According to Yang's indictment paper, at 11:05 am last Aug 16, due to a flaw in trading software, Everbright mistakenly placed 23.4 billion yuan ($3.84 billion) worth of purchase orders for 180 ETFs, of which 7.27 billion yuan were concluded.

Yang reported to the CSRC Shanghai branch and the Shanghai Stock Exchange after the incident and later asked traders to short sell index futures and ETFs to hedge risks, according to instructions from Everbright Securities, the indictment paper said.

The abnormal trading last Aug 16 caused the benchmark Shanghai Composite Index to jump 5.96 percent in about three minutes, with a large number of purchase orders sent from Everbright Securities' account.

Based on the Securities Law and a futures trading rule, the CSRC can confirm that Everbright Securities' behavior is insider trading, a CRSC agent told the court on April 3.

According to the agent, a flawed operation by Everbright Securities had a big influence on the stock market, but the information was not made public for a long time, so it can be identified as insider information.

The CSRC launched an investigation on Aug 18 into the incident. On Aug 31, the commission made a preliminary determination of penalties and individual bans. The CSRC finalized its ruling after hearing Everbright's response.

The CSRC announced on Nov 15 formal penalties for insider trading, levying a fine of 523 million yuan and banning four Everbright managers, including Yang, from the nation's financial markets for life.