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as the securities industry is subject to stricter supervision, securities firm employees are frequently fined for violations.

recently, the china securities regulatory commission has intensively announced a number of fines against securities company employees. many employees of cicc and cicc wealth were fined for illegal stock speculation and account lending. in addition, zhao yuanjun, then an investment bank employee of everbright securities, was fined 4.6 million yuan for insider trading and banned from the market for 10 years.

in addition to illegal stock speculation and insider trading, many brokerage employees were also fined for illegal business operations and failure to perform their duties diligently. according to incomplete statistics from china business news, as of september 17, the csrc has issued more than 120 fines involving brokerage employees this year, involving more than 200 people, most of whom were fined for illegal stock speculation and failure to perform their duties diligently.

fines for illegal stock trading appear frequently

since the beginning of this year, regulatory authorities have frequently taken action to crack down on securities practitioners who engage in illegal stock speculation.

the beijing securities regulatory bureau announced two fines on september 14. one was a warning letter to kou yue and 20 others, and the other was a regulatory talk with zhuang jiangbin. the reasons for both penalties were that securities practitioners violated regulations in stock speculation.

in addition to employees speculating in stocks, illegal lending accounts were also subject to strict supervision. on the 14th, the beijing securities regulatory bureau decided to issue warning letters to wang gangxuan, tao jiale, han xu, dai zirui and others. the reporter noted that many of the fined people were employees of cicc and cicc wealth management, and most of the registered employees were general securities business or investment consultants.

on september 13, the csrc also disclosed a ticket for insider trading by a securities firm employee. the ticket showed that zhao yuanjun, then an investment bank employee of everbright securities, was an insider of the major asset restructuring of xingxing technology (300256.sz), and controlled other people's accounts to illegally trade xingxing technology stocks, ultimately losing 5.3258 million yuan. in response, the csrc imposed a total fine of 4.6 million yuan on zhao yuanjun and banned him from the securities market for 10 years.

it is not uncommon for securities company employees to suffer losses from illegal stock speculation. for example, on august 16, the china securities regulatory commission imposed administrative penalties on cao yichen, a former employee of kaiyuan securities, who illegally speculated in stocks for two years and lost 770,000 yuan in his account. in june, the chongqing securities regulatory bureau issued a fine showing that he xi, an assistant investment consultant and senior investment consultant of southwest securities business department, violated the rules by speculating in stocks for a year, with a total loss of more than one million yuan. in march, the tianjin securities regulatory bureau issued a fine showing that bian shuyuan, a former wealth manager of ping an securities tianjin branch, used his own funds and other people's funds to control and use other people's accounts to illegally speculate in stocks during his tenure, resulting in a loss of 4.74 million yuan.

in addition, there are many executives who violated the rules in stock trading. among the cases of securities practitioners violating the rules in stock trading reported by the china securities association, one case involved xiong tao, the executive director and president of a brokerage firm, who manipulated multiple accounts to conduct large-scale transactions and was eventually banned from the market for life. in february, a penalty notice from the china securities regulatory commission showed that han fei, the former vice president of great wall securities, violated the rules in stock trading and was fined a total of about 117 million yuan, and was also banned from the securities market for 10 years.

"regulatory authorities and securities firms are very strict in investigating illegal stock trading. some securities firms even require employees to hand in their mobile phones during working hours." a person working at a securities firm told caixin that illegal stock trading is a regulatory "red line". since the beginning of this year, under the trend of strict supervision, securities firms have also been more stringent in their self-inspections of employees' illegal stock trading. reporting and verifying the accounts of employees and their families is a basic operation, and it also includes using technological means to verify whether employees have engaged in illegal stock trading, or whether their movements are consistent with the ip address of their relatives' accounts.

among the more than 200 securities employees fined this year, hundreds were punished for illegal stock trading. in addition to the 24 securities employees who were punished recently, in february, the china securities regulatory commission had concentrated on dealing with a group of securities employees who violated the rules in stock trading. hundreds of people were fined at china merchants securities alone, including administrative penalties against 63 people and administrative supervision measures against 46 people.

hundreds of brokerage employees fined

in addition to illegal stock speculation and insider trading, many securities company employees have been fined for illegal business operations and failure to perform their duties diligently since this year, mainly in the brokerage and investment banking business areas.

in terms of investment banking business, it mainly involves the fact that the sponsor representatives failed to perform their duties diligently in ipo, private placement and other projects. for example, on august 30, the guangdong securities regulatory bureau punished five sponsor representatives of citic construction investment, of which two were deemed inappropriate candidates and had their business qualifications suspended for three years, and three were subject to regulatory talks.

according to the classification list of sponsor representatives disclosed by the china securities association, 98 sponsor representatives have received regulatory fines this year. among them, haitong securities and citic construction investment received the most number of fined sponsor representatives, 14 and 12 respectively.

in addition, nearly 40 current or current senior executives and business managers of securities firms were fined for being "responsible" for business violations, including improper internal control and compliance management, asset management and investment banking violations, and improper management of subsidiaries. for example, hualin securities chairman lin li was publicly reprimanded for inaccurate reporting of monthly risk control indicator regulatory reports and excessive risk control indicators.

"hard constraints" on securities firm employees are strengthened

under the trend of strict supervision of the securities industry, the "hard constraints" on the professional standards of securities employees and the requirements for professional ethics are constantly being strengthened. previously, the china securities regulatory commission emphasized that in order to continuously optimize the ecology of the securities industry, it is necessary to strengthen the management of practitioners, improve the basic norms and ethics of practitioners' professional behavior, establish and improve the classification list system of practitioners and the professional reputation management mechanism, and strictly restrict the "sick flow" of illegal and irregular personnel in accordance with the law.

for example, if practitioners violate regulations in stock speculation, the rating of the brokerage firm will also be affected. it is understood that in the evaluation system for the 2024 classification rating of brokerage firms, points will be deducted for issues such as directors, supervisors, and senior managers, as well as key business personnel who violate regulations in buying and selling stocks and providing wealth management services for customers. in addition, in the self-evaluation phase of the 2023 brokerage culture construction rating, the cultural construction evaluation system has also been adjusted, which involves "newly added situations where practitioners violate regulations in stock speculation."

in terms of classification management of underwriters, in july this year, the china securities association further revised the "rules on underwriting business" to further strengthen the reputation constraints of underwriters, including that information on rejected projects will be publicly written into the "personal resume" of underwriters, and underwriters whose business has been suspended will be classified separately.

in terms of strengthening the professional ethics of securities employees, in early september, the china securities association issued the "code of professional ethics for securities practitioners", requiring all securities companies and their subsidiaries to strengthen the management of personnel selection and employment, and strengthen the examination of personnel's political quality, moral character, and integrity in their work; for personnel with negative reputation information, companies should be prudent in hiring and appointing personnel; those who violate laws and regulations and engage in unethical and deviant behavior should be resolutely cleared out, and the ranks of practitioners should be continuously purified.