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Another large fine.

Recently, the China Securities Regulatory Commission announced a fine for stock price manipulation. From April 17, 2017 to January 30, 2018, Zhang controlled 109 securities accounts and manipulated "Huaying Agriculture" by means of concentrated capital advantages, continuous buying and selling, and transactions between accounts actually controlled by him, making a total profit of 133 million yuan. He was fined 266 million yuan by the China Securities Regulatory Commission.

Manipulating stock prices to make a profit of 133 million yuan

In accordance with the relevant provisions of the Securities Law of 2005, the China Securities Regulatory Commission initiated an investigation and trial into Zhang's manipulation of "Huaying Agriculture", and the investigation and trial have now been completed.

The trading team organized by Zhang actually controlled 109 securities accounts and manipulated "Huaying Agriculture" from April 17, 2017 to January 30, 2018.

During the period involved in the case, Zhang controlled a group of accounts and manipulated "Huaying Agriculture" by concentrating financial advantages and shareholding advantages to continuously buy and sell, and trading between accounts under his actual control, thereby affecting the trading price and volume of "Huaying Agriculture".

According to statistics, during the period of the case, the account group bought a total of 250 million shares, with a purchase amount of 2.897 billion yuan; and sold a total of 248 million shares, with a sales amount of 3.02 billion yuan. During this period, the share price of "Huaying Agriculture" rose by 22.49%, while the SME Board Index to which it belongs rose by -2.98% during the same period, and the Agricultural Index rose by 0.77% during the same period. The deviations between the stock price and the board index and the industry index were 25.47% and 21.72% respectively.

In summary, during the period involved in the case, Zhang manipulated "Huaying Agriculture" by controlling the account group, concentrating the advantages of funds and shareholdings to continuously buy and sell, and trading between accounts under his actual control, thereby affecting the trading price and volume of "Huaying Agriculture" and making a total profit of 133 million yuan.

The above-mentioned illegal facts are sufficiently proven by evidence such as the interrogation records of relevant personnel, relevant bank account information, securities account information, computer information information, and transaction data provided by the exchange.

The CSRC believes that Zhang's above-mentioned behavior violates the provisions of Article 77, Paragraph 1, Item 1 of the Securities Law of 2005, which states "alone or through collusion, concentrate financial advantages, shareholding advantages or use of information advantages to jointly or continuously buy and sell, manipulate securities trading prices or securities trading volume" and Item 3, which states "conduct securities transactions between accounts actually controlled by oneself, affecting securities trading prices or securities trading volume", and constitutes the manipulation of the securities market as described in Article 203 of the Securities Law of 2005.

Fined and confiscated 266 million yuan

The party stated and defended that he did not actually control the account group to manipulate "Huaying Agriculture". He was only a capital allocation intermediary, and the actual manipulators were the other two people. The party provided capital allocation services to the two people and supervised the capital allocation accounts. The control over the account group was limited to supervising the stock trading in the securities account and the safety of the principal. He was not responsible for specific transaction decisions and the issuance of transaction instructions, and had no control over the transfer of funds in the account. Moreover, not all of the 109 securities accounts in the account group were provided by the party, but some were provided by others.

The party concerned also claimed that he did not participate in the distribution of the profits from the operation. In addition to charging others for the intermediary service fee for the allocation of funds, Zhang did not obtain any profit from manipulating "Huaying Agriculture".

After review, the CSRC believes that regarding the account control issue, Zhang organized a trading team, and the relevant personnel followed Zhang's instructions to assist in finding funds, managing securities accounts, transmitting trading instructions and specific operations. Through the multi-dimensional evidence obtained on site, such as computer files, trading terminal associations, fund associations, trader identification, and financing intermediary identification, it is sufficient to determine that Zhang controlled the account group to trade "Huaying Agriculture" through his trading team, and the manipulation behavior involved in the case was organized and implemented by Zhang. Zhang is the illegal subject in this case rather than the financing intermediary.

Regarding the whereabouts of the funds in this case, the CSRC stated that of the funds transferred to Zhang by others, except for some funds transferred to other people's related accounts, the remaining funds were rolled over and used in a bank account controlled by Zhang. In addition to being used for margin trading of stocks, the funds were also used to purchase financial products, pay wages and rent, and make large cash withdrawals.

The CSRC did not accept the parties’ defense.

Based on the facts, nature, circumstances and degree of social harm of the party's illegal acts, and in accordance with Article 203 of the 2005 Securities Law, the CSRC decided to confiscate Zhang's illegal gains of 133 million yuan and impose a fine of 133 million yuan.