China’s securities regulator released details of its efforts to fight trading misconduct, including the arrest of a Southwest Securities Co. (600369) executive, as part of its “zero tolerance” campaign against wrongdoing.
Ji Minbo, a vice president at Southwest Securities, was arrested on allegations he gained 20 million yuan ($3.2 million) by using undisclosed information to trade more than 40 stocks from 2009 to 2011, the China Securities Regulatory Commission said in a Dec. 23 statement on its website. The case was one of five disclosed by the regulator, which released details about six other fraud cases two weeks earlier.
China has tightened oversight of its two-decade-old stock market, including by prosecuting government officials, executives and fund managers. The securities regulator’s newly appointed chairman, Guo Shuqing, pledged “zero tolerance” this month for insider trading and securities fraud in the world’s third-biggest equities market.
Southwest Securities has yet to find any loopholes after “combing through” its internal control and proprietary-trading procedures, Xu Mingdi, the Chongqing-based company’s board secretary, said in a telephone interview today. The case relates to Ji’s “personal problems,” said Xu, who is based in Beijing.
Shares of Southwest Securities gained 1.2 percent to 8.20 yuan in Shanghai trading as of 1:17 p.m. local time. The benchmark Shanghai Composite Index (SHCOMP) fell 0.4 percent.
The other investigations disclosed by the securities regulator on Dec. 23 included a case that involved the leaking of information about an acquisition and another in which analyst recommendations were used to manipulate shares.
Two weeks ago, the securities regulator released information about investigations that included a case in which conspirators manipulated the shares of 552 companies and pocketed 426 million yuan of illegal gains.
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