Recently, the official website of the China Securities Regulatory Commission disclosed a penalty information about insider trading of investment bankers, as an insider of the major asset restructuring of Xingxing Technology, Zhao Yuanjun, an investment banking employee of Everbright Securities at the time, bought 11.4122 million yuan of Xingxing Technology in advance, but ultimately lost 5.3258 million yuan. The China Securities Regulatory Commission imposed a total fine of 4.6 million yuan on Zhao Yuanjun in accordance with the law, and at the same time imposed a 10-year ban on him from entering the securities market.
According to the penalty decision, from September 17, 2018 to February 28, 2022, Zhao Yuanjun worked at Everbright Securities as a securities practitioner.
According to public information, Zhao Yuanjun is not an ordinary employee, but an investment banker, who was the general manager of the investment bank headquarters of Everbright Securities.
So how did this inside information come about?
On February 17, 2020, Everbright Securities Kang designed a relevant major asset restructuring plan based on the situation of Xingxing Technology and financing rules.
On February 19, 2020, Kang reported to Zhao Yuanjun on the situation of this major asset restructuring project. Zhao Yuanjun reported relevant matters to the relevant person in charge of Everbright Securities and instructed Kang to conduct a feasibility analysis of the restructuring project.
On February 20, 2020, Kang sent a relevant analysis report to Zhao Yuanjun.
On February 22, 2020, Zhao Yuanjun participated in a video meeting with Xingxing Technology on the project.
On March 15, 2020, Xingxing Technology issued a relevant major asset restructuring announcement.
And during this time, Zhao Yuanjun quietly bought shares of Star Technology.
After investigation, on February 25 and 28, 2020, Zhao Yuanjun used the "Zhao Moujiang" securities account to buy a total of more than 1.6 million shares of "Star Technology", with a transaction amount of about 11.41 million yuan. On August 18 and 19, 2021, Zhao Yuanjun cleared all his positions, with a transaction amount of about 6.09 million yuan. After calculation, the loss of the above transaction was about 5.32 million yuan.
Market data shows that during the period from Zhao Yuanjun's purchase to the clearance, the share price of Star Technology fell by more than 50%.
On March 15, 2020, Xingxing Technology announced that it intends to purchase 48.75% of the equity of Jiangxi Xingxing Technology, a holding subsidiary, by issuing shares and paying cash, and raise matching funds, with a transaction price of no more than 1.6 billion yuan, which is expected to constitute a major asset restructuring. At that time, the company engaged Everbright Securities as the independent financial adviser for the transaction.
A year later, Xingxing Technology's performance exploded, and its performance in 2020 suddenly turned from a profit to a huge loss of nearly 2.5 billion yuan, and then the stock price continued to plummet, and Zhao Yuanjun chose to clear the stock in the two days, and the stock price of Xingxing Technology plummeted by 20% and 10.8% respectively.
was fined 4.6 million yuan and banned from the market for 10 years
In the course of the hearing, Zhao Yuanjun put forward the following defense opinions: first, the identification of the time point of formation of the inside information involved in the case was wrong; second, he was unaware of the inside information involved in the case; Third, its purchase of "Star Technology" was based on a friend's recommendation and personal research, and the transaction involved in the case was not abnormal; Fourth, the punishment is excessive, and there are circumstances such as actively cooperating with the investigation.
In this regard, the CSRC did not accept Zhao Yuanjun's above-mentioned defense opinions for the following reasons:
First, the time point of formation of the inside information involved in the case was accurate.
Second, the evidence on record is sufficient to prove that Zhao Yuanjun received the design of the relevant major asset restructuring plan on February 19, 2020, and participated in the relevant video meeting on February 22. Zhao Yuanjun is a legal insider and has a legal obligation to refrain from trading after learning of the relevant restructuring information, and the defense reasons he put forward based on the recommendation of friends and personal research do not constitute a legitimate reason to prevent insider trading.
Third, the CSRC has fully considered the facts, nature, circumstances and degree of social harm of the parties' illegal acts when sentencing, and the punishment is appropriate.
Finally, the CSRC made the following penalty decisions:
1. In accordance with Article 187 of the Securities Law, Zhao Yuanjun was fined 4 million yuan.
2. In accordance with Article 202 of the Securities Law of 2005, Zhao Yuanjun was fined 600,000 yuan.
In addition, Zhao Yuanjun's violation of the law was more serious. According to the regulations, the China Securities Regulatory Commission (CSRC) decided to impose a 10-year ban on Zhao Yuanjun from entering the securities market, and from the date of the CSRC's announcement, during the ban period, he shall not continue to engage in securities business in the original institution or serve as a director, supervisor or senior manager of the original listed company or unlisted public company, nor shall he engage in securities business or serve as a director, supervisor or senior manager of other listed companies or unlisted public companies in any other institution.
Source: China Securities Journal