Colluding with "internal ghosts" to manipulate the securities market to illegally profit more than 5 billion! Five were sentenced

Source: People's Daily client

Recently, the Shanghai Municipal People's Procuratorate disclosed a crime of manipulating the securities market that occurred in recent years. Criminal suspects and executives of listed companies colluded with each other to manipulate stock prices, and only 3 main criminals illegally profited more than 5 billion yuan, and were eventually prosecuted by the procuratorate, and sentenced to fixed-term imprisonment ranging from eight years to two years in prison.

Gu Jia, director of the Third Procuratorial Department of the First Branch of the Shanghai Municipal People's Procuratorate, said that in early 2015, the defendants, He XX and Mai XX, the actual shareholders of the listed company S Co., Ltd. (hereinafter referred to as "S Company"), sold all the equity of S Company held by them, and after agreeing with the defendants Huang XX and Wen XX, the defendant Jiang XX recommended by Huang XX, Wen XX and Huang XX was acquired at a step-by-step premium of not less than RMB3.8 billion.

He xxx, Mai xx, huang xx, Wen xxx control S company issued favorable announcements such as "private placement" and "high delivery" to increase the stock price. At the same time, based on the above information advantages, Huang X and Wen X continuously bought and sold S Company shares in the secondary market through their own or other people's accounts under their control. Through the transfer of agreements and the trading of S Company's stock price shares in the secondary market, Huang xxx, Wen xx, and Jiang xx illegally profited more than 1.49 billion yuan, more than 1.55 billion yuan, and more than 2.06 billion yuan (all including floating profits) respectively; He xxx, Mai xx, and others cashed out a total of more than 3.846 billion yuan at a high level by way of agreement transfer, and He xxx, Mai xx, and Mai xx illegally profited more than 185 million yuan respectively.

In May 2018, the First Branch of the Shanghai Municipal People's Procuratorate filed a public indictment on the suspicion of manipulating the securities market by defendant Huang X and five others. In December 2018, the Shanghai No. 1 Intermediate People's Court sentenced the five defendants to fixed-term imprisonment ranging from eight years to two years' imprisonment and fines ranging from RMB500 million to RMB10 million. After the defendant appealed, the Shanghai Higher People's Court ruled in August 2020 to reject the appeal and uphold the original judgment.

Gu Jia introduced that in recent years, more and more criminal suspects who manipulate the securities market have argued that they do not constitute a crime in the name of "market value management". In fact, there is a clear "red line" boundary between legal and compliant market value management and illegal and criminal acts of manipulating the securities market: first, the pace of information disclosure or selective information disclosure and false information disclosure; second, insider trading or manipulation of stock prices for illegal benefits; third, the legitimate rights and interests of listed companies and small and medium-sized investors must not be harmed. In this case, the behavior of Huang X and others violated the above red line, was a manipulative crime cloaked in the cloak of "pseudo-market value management", and had violated the criminal law, so it was accurately cracked down by the judicial organs.

In 2011, in order to better serve the construction of Shanghai International Financial Center, the Financial Procuratorate of the Shanghai Municipal People's Procuratorate was formally established, becoming the first professional case-handling department of finance and intellectual property rights in the provincial procuratorial organs in The country, and establishing a specialized institution of financial and intellectual property prosecution and a specialized case-handling team covering the city's three-level procuratorates. In the past ten years, the Shanghai financial and intellectual property procuratorial departments have handled more than 17,000 financial crime review and prosecution cases and more than 26,000 people, and more than 5,000 intellectual property crime review and prosecution cases and more than 10,000 people.