Government stock regulator fines Everbright USD85.5 million on trading charges
The Chinese government's stock regulator said Everbright Securities has been fined CNY523 million or USD85.5 million after concluding its investigation on the Chinese securities brokerage firm. China Securities Regulatory Commission (CSRC) had also said they had banned Everbright's former president Xu Haoming and three of Everbright's executives from the trading industry for life.
The investigation sprang from a computer glitch in Everbright's system that resulted in unintentional buy orders amounting to CNY68.6 billion or USD11.2 billion on August 16 to the Shanghai bourse. The buy orders influenced China's main stock index, causing a huge jump. The bourse's risk control measures did not preempt trading on the erroneous orders as one-third of them were traded.
CSRC also uncovered evidence of a massive cover-up by Everbright and its executives to generate and receive benefits resulting from the computer glitch. Everbright earned CNY87.2 million in profit from the tainted trades. CSRC had told the media in a briefing that they had confiscated the brokerage's profits from the trades.
Aside from the huge fines and the lifetime ban of its executives, Reuters reported that Everbright would be facing more severe suspensions for parts of its operations. Reuters also said that the suspensions would preempt the brokerage firm's actions like exits or asset sales to stave off financial repercussions from CSRC's verdict. Everbright declined to comment to Reuters about the matter.
Join the Conversation