This fund manager can be called a "rat warehouse" professional account, engaged in public offerings, and continued to engage in private placements

Finance Associated Press

2024-04-08 20:01Published on the official account of Cailianpress, a subsidiary of Shanghai Shanghai Poster Industry Group

Finance Associated Press, April 8 (Reporter Feng Qijuan) Fund managers were fined twice, both for convergence trading. It is true that it takes time for regulatory investigation and trial, but before the fines were disclosed, the offenders jumped ship to two asset management institutions and took charge of fund products independently.

According to the latest disclosure by the Shanghai Securities Regulatory Bureau, Le, the investment manager of the private equity fund Shanghai Bei Investment Management Co., Ltd. (hereinafter referred to as Shanghai Bei), obtained relevant undisclosed information for convergence transactions due to his position during his tenure. Under the circumstance that the facts are clear, the evidence is sufficient, and the law is correctly applied, the bureau did not adopt the statement and defense opinions put forward by Le, and finally decided to order Le to make corrections, confiscate 300,700 yuan of illegal gains, and impose a fine of 300,700 yuan.

The fine pointed out that the party: Le, male, born in 197X, address: Huangpu District, Shanghai. From May 2016 to December 2017, Mr. Le served as the investment manager of Mr. Bei Lexiang No. 1 in Shanghai. According to relevant clues, Shanghai Bei basically pointed to Shanghai Beiyi Investment Management Co., Ltd., and Le pointed to Le Qi.

In addition, it is also from the Shanghai Securities Regulatory Bureau, and the party to a fine announced in December 2021 is also Le, male, born in March 197X. The fine pointed out that Le, who was the former fund manager of the Shanghai Investment JPMorgan fund at the time, was also fined for using undisclosed information to make profits from convergence transactions, and was sentenced to confiscation of illegal gains of 1.6537 million yuan and a fine of 1.6537 million yuan by the bureau.

Judging from public information, Le Qi has worked at CIFM for nearly 6 years, successively as a researcher and fund manager. After leaving CIC Morgan in May 2016, Lucky joined Shanghai Beiyi Investment. To sum up the above information, Le is Le Qi. It is worth noting that three months after leaving Shanghai Beiyi Investment, Lucky joined IB Fund in March 2018 and began to manage products the following month. A year later, Lucky left her position as fund manager for personal reasons. On August 29 last year, the product entered the liquidation procedure.

This also means that before the announcement of Le Qi's first fine, he had successively jumped from China Investment Morgan to Shanghai Beiyi Investment and Xingyin Fund. On March 25 this year, Shanghai Beiyi Investment took the initiative to cancel it.

Judging from the announcement time, Le Qi was fined twice and was fined nearly 2 years and 4 months apart. Interestingly, these two convergence transactions both controlled the use of Wang's securities account, but it is unknown whether they were the same account.

The defense was rejected, and the fines totaled 600,000

The latest fine shows that Le serves as the investment manager of Bei Lexiang No. 1. Authorized by the chairman of Shanghai Bei, Le is also responsible for the investment strategy consulting work of Chang'an Bei No. 2, the asset management plan, and actually makes investment decisions.

After investigation, Le had the following illegal facts: during his tenure in Shanghai Bei, Le controlled and used his own securities account and Wang's securities account to conduct convergence transactions with Bei Lexiang No. 1 and Chang'an Bei No. 2 under his management, and Le's securities account converged to buy 13.5509 million yuan, and the convergence purchase profit was 162,200 yuan, and Wang's securities account converged to buy 8.6369 million yuan, and the convergence purchase profit was 138,500 yuan, and the total profit of the two securities accounts was 300,700 yuan.

The above facts are supported by evidence such as the records of the relevant personnel's interrogations, computer screenshots, relevant company systems, securities account information, bank transaction records, labor contracts, relevant product agreements and explanations, which are sufficient to determine.

The Shanghai Securities Regulatory Bureau believes that Le's position is convenient to obtain relevant undisclosed information, and he controls the use of his own securities account and Wang's securities account to use undisclosed information to engage in stock trading, which violates the relevant provisions of the "Fund Law" and the "Interim Measures for the Supervision and Administration of Private Investment Funds".

In his statement and defense materials, Le pointed out that the investment decision was made independently based on his personal investment and research experience, was not a joint decision of the company, and did not belong to undisclosed information, and his adoption of the same strategy to copy the investment method did not constitute the use of undisclosed information for trading; the conduct involved in the case did not apply to the "Fund Law" for punishment, there was no purpose of obtaining additional income through the securities account, and the transaction involved in the case did not affect the stock transaction price, did not harm the interests of fund holders, and there was no improper profit.

After review, the bureau believes that the facts of this case are clear, the evidence is sufficient, and the law is correctly applied, and Le's statement and defense opinions cannot be established:

First, Le's illegal conduct constituted the use of undisclosed information for trading. The Shanghai Securities Regulatory Bureau believes that Le's independent decision based on his personal investment research experience and the adoption of the same strategy to copy the investment method are not grounds for exemption.

First, Mr. Le is a private equity fund practitioner and is subject to the regulation of Article 23 of the Private Placement Measures;

Second, in this case, the transaction decision-making information of Bei Lexiang No. 1 and the investment recommendation information of Chang'an Bei No. 2 included the specific name, transaction direction, transaction amount, transaction quantity, transaction time, etc., which were undisclosed information;

The third is that Le is aware of relevant undisclosed information due to the convenience of his position, and even if he makes investment decisions, he cannot do without the support of material, financial, human and other resources provided by the company. Once the relevant investment decision is adopted by the company, it is undisclosed information before it is made public;

Fourth, Le controlled the use of his own securities account and Wang's securities account to conduct convergent transactions with Bei Lexiang No. 1 and Chang'an Bei No. 2 under his management.

Second, Article 123 of the Fund Law should be applied to punish Le's illegal acts.

Third, on the determination of illegal gains. Le's illegal act violated the fiduciary duty of fund practitioners, controlling the use of his own securities account and Wang's securities account to use unopened information to trade stocks, and the trading profits should be regarded as illegal gains, and a fine should be imposed hereon. Le's argument that there was no purpose to obtain additional income through the securities account, that the transaction involved in the case did not affect the stock trading price, and that the interests of the fund holders were not harmed were not grounds for exemption.

Before the smuggling, it was already converging in trading

According to the December 2021 fine issued by the Shanghai Securities Regulatory Bureau, the Shanghai Securities Regulatory Bureau conducted an investigation and trial on Le's use of undisclosed information to trade during his tenure at the former CIC Morgan, and finally decided to "fine Le for nothing", with a total fine of 3.3074 million yuan.

The fine pointed out that during the period from July 4, 2013 to April 29, 2016, Le successively served as the assistant fund manager of five public funds, including China Advantage, Growth Pioneer, Dual-Core Balance, China Investment Small and Medium Cap, and Healthy Quality Life, which were originally CIFMorgan, (with the right to inquire about fund transactions), and the fund manager of three public funds, including Growth Momentum, China Advantage, and Healthy Quality Life (with the authority to inquire about fund transactions). In addition, it is also intermittently entrusted with the responsibilities related to fund backup authorization transactions (only orders are placed according to the instructions of the fund manager or investment manager) or fund backup authorization transactions (deemed to be all the authority of the fund manager or investment manager) of 13 public funds such as Growth Pioneer.

During his tenure, Le used the fund-related undisclosed information obtained due to the convenience of his position to actually control and use Wang's securities account (including ordinary securities account and margin securities account) opened in the securities business department of Fushan Road, Pudong New Area, Shanghai, Huatai Securities, and had convergence transactions with public funds such as Growth Momentum, China Advantage, Healthy Quality Life, Growth Pioneer, and China Investment Small and Medium-sized Cap, with a total convergence transaction amount of 54.8198 million yuan and a total convergence profit of 1.6537 million yuan.

According to public information, Lucky is a master's student at Clarion University in the United States. From March 2007 to August 2010, Le Qi worked as a researcher at Bank of China Asset Management, from August 2010 to May 2016, she served as a researcher and fund manager at the former China International Investment Fund Management Co., Ltd., and in May 2016, she left China International Investment Co., Ltd. for personal reasons, and served as the deputy investment director of Shanghai Beiyi Investment Co., Ltd. until her departure in December 2017.

In April 2018, Lucky was co-opted as the fund manager of IB Health, co-managing with another fund manager. After 3 months, he began to manage the product independently, with a tenure of 246 days.

According to the daily fund network, during the management of Morgan Health and Quality Life, Morgan Growth Momentum, and Morgan China Advantage, Lucky returned 43.12%, 11.52%, and -5.01% respectively. During Le Qi's tenure, Xingyin lost 22.12% during the health period.

Shanghai Beiyi Investment is a private securities investment fund, established in July 2014, and completed its registration with AMAC more than three months later. On March 25 this year, the private placement has been voluntarily cancelled, and the institutional information was last updated in August 2015. According to the AMAC, before the voluntary cancellation, 7 products of Shanghai Beiyi Investment have been liquidated in advance.

(Finance Associated Press reporter Feng Qijuan)

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