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2018 witnesses inspected 20 typical cases of violations

January 11, 2019 16:20
source: SFC website

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Summary
[SFC Conference] The Securities and Futures Commission spokesperson Gao Li said on January 11 that there were 20 typical cases in the 2018 audit.

  1. False statements and intermediaries have not diligently tried their duty

  (1) Jinya Science and Technology Information Disclosure Violation and Law--Fighting to crack down on fraudulent issuance and financial fraud that seriously damage the legitimate rights and interests of small and medium-sized investors

This case is a typical case of fraudulent issuance and financial fraud. Jinya Technology Co., Ltd. (referred to as Jinya Technology) through fictitious customer and business, forgerycontractOther ways to inflict income and profits, fraudulently obtained initial public offering (IPO) approval. After the listing, Jinya Technology increased its profit in 2014 by about 80.49 million yuan, and the bank deposits were about 218 million yuan. The amount of prepaid projects was about 310 million yuan. In March 2018, the CSRC made administrative penalties for Jinya Science and Technology and related responsible personnel in accordance with the law. In June of the same year, the CSRC transferred the crimes related to fraudulent issuance by relevant personnel to the public security organs. In August of the same year, the CSRC made administrative penalties against the Licensing Office and related personnel in accordance with the law. Fraudulent issuance and financial fraud seriously violate the information disclosure system and seriously undermine the foundation of market integrity. It has always been the top priority of the CSRC's supervision and enforcement.

  (II) Huaze Cobalt and Nickel Information Disclosure Violation Laws - The actual controllers cover up the capital occupation and cause the listed company to disclose the violations

This case is a case in which the actual controller of a listed company obscures the occupation of funds and refers to a typical case in which a listed company violates the rules. From 2013 to the first half of 2015, Chengdu Huaze Cobalt Nickel Materials Co., Ltd. (Huazco Co., Ltd.) accumulatively incurred 890 million yuan, 3.04 billion yuan, and 1.49 billion yuan of related transactions to related parties. The balance reached 1.33 billion yuan. In order to cover up the fact that the related parties have long occupied funds, the actual controller of the listed company, Wang Tao and others, successively used the fictitious purchase contract, fictitious payment service, and endorsement of the bills by air, and accounted for 3.78 billion yuan of invalid bills as repayment. In January 2018, the CSRC imposed administrative penalties on Huaze Cobalt and Nickel in accordance with the law. In August of the same year, the relevant personnel were transferred to the public security organs for suspected securities crimes to be investigated for criminal responsibility. At the same time, Guosen Securities as a major asset of Huaze Cobalt and Nickel in 2013 and 2014ReorganizationThe financial adviser and the sponsoring institution that resumed listing did not perform their duties diligently during the practice. Ruihua Certified Public Accountants in 2013 and 2014Financial StatementsDuring the audit process, he did not perform his duties diligently and issued an audit report with false records. In June 2018, the CSRC made administrative penalties for Guosen Securities and its related employees in accordance with the law. In December 2018, the CSRC imposed administrative penalties on Ruihua Certified Public Accountants and related employees. The investigation and investigation of this case showed that some listed companies lack legal person governance and internal control management confusion, and illegal acts harm the legitimate rights and interests of listed companies and investors, and will be severely punished by law.

  (III) Kunming Machine Tool Information Disclosure Violation Law--Listing Company Implements Financial Fraud for Three consecutive Years to Avoid Suspension of Listing

This case is a typical case in which listed companies have self-declared financial fraud and letter-breaking violations over the years. From 2013 to 2015, Shenji Group Kunming Machine Tool Co., Ltd. (referred to as Kunming Machine Tool) inflated revenue by 4.83 billion yuan through inter-period recognition of income, false income and inflated contract price;ExecutiveThe way of remuneration has increased the profit by 29.61 million yuan; by setting the warehouse for finished products, and the fictitious production business, the operating costs of each period and the inventory are understated. False records of the 2013-2015 annual report. In February 2018, the CSRC imposed administrative penalties on Kunming machine tools and related responsible personnel. The investigation and investigation of this case shows that financial fraud and letter-breaking violations seriously damage the interests of investors and seriously undermine the basis of market integrity. All parties in the market should take this as a guide and be highly self-disciplined to ensure the truthfulness, accuracy and completeness of information disclosure.

  (4) Cases of violations of laws and regulations on the disclosure of long-lived biological information - promptly investigate and deal with illegal cases of listed companies that seriously damage the vital interests of the people

This case is a typical case involving the disclosure of compliance information on the production and operation of listed companies. In July 2018, the vaccine incident of Changsheng Biotechnology Co., Ltd. (abbreviated as Changsheng Biological) occurred. After investigation, Changsheng Biological has the following securities violations: First, it fails to disclose that the subsidiary's Baibai Break Vaccine does not meet the standard requirements, completely suspend production and recall the issued vaccine; second, the company's rabies vaccine GMP certificate is not disclosed and Re-acquisition of major issues such as the certificate; third, the disclosed 2015-2017 annual report and internal control self-evaluation report have false records. In December 2018, the CSRC imposed administrative penalties on Changsheng Biology and 18 related responsible personnel. The investigation and punishment of this case shows that the CSRC has “zero tolerance” for market entities that have seriously infringed on the public interest and caused major social impacts. Listed companies must strictly abide by laws and regulations, operate with integrity, and earnestly assume their due social responsibilities.

  (V) Shanxi three-dimensional environmental protection information disclosure violations - resolutely fight the capital market to prevent pollution

This case is a typical case in which the CSRC assisted in the fight against pollution prevention and rectification of listed companies' environmental information disclosure violations. In April 2018, the media reported on the pollution problem of Shanxi Three-dimensional Group Co., Ltd. (referred to as Shanxi three-dimensional) caused social concern. According to the investigation, from 2014 to 2017, Shanxi's three-dimensional environmental pollution department was subjected to seven administrative penalties for environmental pollution. The daily production and operation had multiple discharges exceeding the standard, and the above information was not disclosed in the regular report. In June 2018, the Shanxi Securities Regulatory Bureau imposed administrative penalties on three-dimensional and related personnel in Shanxi. The investigation and punishment of this case shows that listed companies must effectively shoulder the social responsibility of protecting the environment. The CSRC will always maintain a high-pressure law enforcement trend for violations of environmental information disclosure.

  (6) Longbao Ginseng submits false application documents - Strictly prevent IPO enterprises from "reporting with illness"

This case is a typical case of illegal IPO corporate information disclosure. In March 2014, Longbao Ginseng Co., Ltd. (referred to as Longbao Ginseng) filed an IPO application. The on-site inspection by the regulatory authorities on the IPO enterprise found that the information disclosure of Longbao ginseng had doubts. After investigation, there is a major omission in the description of the distribution model in the Longbao ginseng prospectus. The distribution contract involving the transfer of sales risk and the provision of guarantees has not been disclosed. The sales certificate of the wild ginseng attached to the identification certificate and the prospectus disclosed in the prospectus Not exactly the same. In August 2018, the CSRC made administrative penalties for Longbao ginseng and related responsible persons according to law. The case warned that enterprises should not "report the disease". For those who are lucky, the regulatory authorities will resolutely pursue the responsibility of the relevant institutions and personnel.

  (7) The Bank’s assessment has not been diligent and conscientious in its case – keeping an eye on the illegal activities of the evaluation agency’s practice procedures and inaccurate opinions

This case is a typical case in which the CSRC will impose penalties for failing to perform due diligence in the course of practising. From May to October 2014, Yinxin Assets Appraisal Co., Ltd. (referred to as Yinxin Evaluation) was in the business of Shenzhen Baoqianli Electronics Co., Ltd.shareholderWhen assessing the entire value of equity, it is not diligent, and there is a violation of the Assets Evaluation Guidelines, such as failure to pay due attention to relevant agreements and implementation of effective evaluation procedures, and incomplete collection of assessment reports. The “assessment report” issued is misleading. statement. In November 2018, the CSRC made administrative penalties for the evaluation of Yinxin and related responsible personnel according to law. The investigation and punishment of this case shows that all kinds of intermediaries should abide by the duties of “gatekeepers” in the capital market, establish a sense of compliance, and earnestly perform their duties.

  Second, manipulating market cases

  (8) The case of Beibadao Manipulating the Market - Investigating and Handling the Short-term Operation of Leveraged FundsNew shares

This case is a typical case in which a large amount of funds are raised together and a large number of accounts are used to speculate as “secondary shares”. From February to May 2017, Bei Badao Group Co., Ltd. (referred to as Bei Ba Dao) and its actual controllers organized a trading team to raise billions of funds through multiple capital intermediaries, using more than 300 securities accounts, and adopting frequent transactions. In the intraday, the stock price was pulled up, and the price limit was quickly closed. The “Zhangjiagang Bank”, “Jiangyin Bank” and “Hesheng Shares” and other new stocks were manipulated, with a total profit of 950 million yuan. In April 2018, the CSRC made administrative penalties for Bei Ba Dao and related responsible persons according to law. The investigation and handling of this case has cracked down on the use of leveraged funds to manipulate "secondary shares" in a short-term manner and maintained market order.

  (9) Yuxing Group and Li Weiwei conspired to manipulate Dalian Electric Porcelain Stocks – the actual controllers of listed companies abused the information advantage and colluded with the market

This case is a case in which the actual controller of the listed company abuses the information advantage and colludes with the market organization to conspirate to manipulate the market case. Shanghai Yuxing Financial Holdings (Group) Co., Ltd. (referred to as Yuxing Group), after obtaining the controlling power of Dalian Electric Porcelain, colluded with Li Weiwei to control the stock price of “Dalian Electric Porcelain” by controlling the rhythm and content of the company's major information disclosure. In July 2018, the CSRC made administrative penalties for the Yuxing Group and related responsible persons in accordance with the law. The investigation and investigation of this case showed that some listed companies colluded with market institutions, illegally manipulated the content and rhythm of information disclosure, and seriously undermined the pricing function of the market. The CSRC has always severely cracked down on this.

  (10) Chen Xian's manipulation of the price of government bonds - the first exchange price of the bond market in the bond market

This case is an illegal case in which the price of government bonds is manipulated in the exchange bond market. Chen Xian frequently traded against each other in the trading of five government bonds, such as “national debt 1507”, accumulating 117 times, raising the closing price, and manipulating the formed price through the national debt.PledgeformulaRepoThe business is over-integrated into funds and reduces financing costs. In June 2018, the CSRC imposed an administrative penalty on Chen Xian in accordance with the law. The investigation and punishment of this case shows that the act of manipulating the bond price interferes with the market supply and demand relationship and undermines the normal price formation mechanism and should be punished according to law.

  (11) Liao Yingqiang manipulates the market case - the stock market "black mouth" manipulates the market by means of self-media recommendation

This case is a case of “black mouth” that publicly recommends shares and makes profits from it by means of short videos such as the Internet. Liao Yingqiang is a guest hosted by a well-known financial media. At the same time, he has published a recommendation video through the platform of the “Love Shares” APP, which has been operated by him, and has accumulated a reputation and audience. Liao Yingqiang does not haveStock investmentIn the case of consulting practice qualifications, use their influence to publicly evaluate and recommend stocks on Weibo and blogs. Buy before the stock recommendation, then recommend others to buy, and sell quickly when the stock price rises, and take short-term spreads. From March to November 2015, Liao Yingqiang manipulated 39 stocks 46 times. In April 2018, the CSRC imposed administrative penalties on Liao Yingqiang in accordance with the law. The investigation and punishment of this case once again sounded the alarm for the stock market "black mouth" to manipulate the market through the "grab hat" transaction.

  (12) Ren Liangcheng's manipulation of the market case - severely punishing the capital market for repeated investigations

This case is a series of cases that repeatedly investigate and manipulate the market. From December 2015 to April 2016, Ren Liangcheng and Ren Liangbin controlled and used 11 securities accounts opened by Shanghai Renxing Investment Management Co., Ltd. and other company employees and financiers controlled by them.big dealAfter the platform took over the stock, the price of six stocks such as “Nanwei Software” was raised by manipulative methods, and then the stocks bought in the previous period were sold at a high price, and the profit was 7.53 million yuan. In September 2018, the CSRC made administrative penalties for Ren Liangcheng and Ren Liangbin. This is the third time Ren Liangcheng has received a ticket for manipulating the market. The first two have been fined 340 million yuan. The investigation and punishment of this case shows that for those who repeatedly commit repeated punishments and arbitrarily disrupt the market order, the regulatory authorities will keep a close eye on them and seriously investigate them.

  (13) Wenga Yongquan and other manipulation of Zhongyi Media's stock price case - the actual controller of the new three board listed company manipulated the company's share price

This case is a typical case of manipulating the stocks of the New Third Board listed companies. Hunan Gaoyi Culture Media Co., Ltd. (referred to as Zhongyi Media), the actual controller and chairman of the board, Wenga Yongquan, in planning the company restructuring, in order to make the stock price reach its expected price, through joint trading, continuous trading, publishing false information and other methods Manipulate the company's stock price. On April 3, 2018, the CSRC made administrative penalties for Wenga Yongquan and related responsible persons according to law. The investigation and investigation of this case showed that the participating parties in the New Third Board market should participate in market activities in accordance with the law and consciously maintain the normal order of the new three board market.

  (14) Wang Fatong’s manipulation of the market case – serious investigation and punishment of vicious manipulation cases that accumulate market risks

This case is a typical case of manipulating "secondary shares" together. From January to June 2017, Wang Fatong controlled the use of 344 securities accounts such as “Xie Mouwei”, raised more than 2 billion yuan of funds with 3-5 times leverage, and adopted the centralized shareholding advantage and capital advantage to continuously pull up. The abnormal trading methods such as reversed transactions, and the repeated speculation of "Qingyuan shares" and other three stocks, led to a sharp rise in the relevant stock price. In October 2018, the CSRC imposed administrative penalties on Wang Fatong in accordance with the law. The investigation and investigation of this case showed that some investors used high-leverage funds such as private capital allocation to manipulate stock prices. The CSRC has always paid close attention to this and strictly investigated and handled the market manipulation.

  3. Insider trading and the use of undisclosed information trading cases

  (15) Wang Yicheng and other insider trading Han Ding Yuyou stock case - listed company insider information insider insider trading

This case is a typical insider trading case. From February to October 2016, Han Ding Yuyou Internet Co., Ltd. (referred to as Han Ding Yuyou) in the process of planning the acquisition of Handing Yuyou Media Group Co., Ltd., the actual controller of listed company Wang Yucheng and related company executives Wang Some legal insider information insiders use their own and other people's accounts to buy a large number of company stocks in advance during the sensitive period of inside information. In July 2018, the CSRC made administrative penalties for relevant personnel in accordance with the law. The investigation and investigation of this case shows that the CSRC has always maintained a high-pressure supervision of insider trading, warning the insiders of listed companies and other insider information to be cautious, and must not exceed the legal bottom line.

  (16) Hu Zhongquan and other insider trading Vignas stock case - bank practitioners use their position to facilitate insider trading

This case is a typical case in which a bank employee passes inside information and engages in insider trading. In May 2016, Vignas Fashion Co., Ltd. (Vignes) intends to acquire a clothing brand and related assets and business in cash, and apply for a loan to China Merchants Bank Nanjing Branch on the matter. Hu Zhongquan, deputy general manager of the bank credit approval department, and Fan, a staff member of the Nanjing Jiangning Sub-branch, attended the credit approval and financing plan discussion. In August 2016, Hu Zhongquan used the accounts of himself and others to trade Vignas stocks in large quantities before the inside information was released. In the case of a number of people who had specific relationships and contacts with inside information insiders, the stock was traded in large quantities. In August 2018, the CSRC imposed administrative penalties on Hu Zhongquan and others. The investigation and investigation of this case showed that employees such as banks use insider information obtained by performing job duties to buy and sell related securities, or disclose inside information and suggest others to buy and sell related stocks, which constitutes insider trading.

  (17) Wang Peng's use of undisclosed information transaction case - practitioners and their relatives jointly implemented the "mouse warehouse" was criminally accountable

This case is a typical case of the CSRC's legal transfer and the criminal judgment of the judicial authorities to determine the "mouse warehouse" joint crime. From March 2009 to August 2011, whenHuaxia FundBond trader Wang Peng repeatedly logged into the company's transaction management department to check the account number, and learned about China.fundAfter the investment information of the stock fund products, the relatives and their relatives used the undisclosed information obtained for securities trading, involving 375 stocks, the accumulated transaction amount was 878 million yuan, and the illegal profit was 17.74 million yuan. In March 2018, the First Intermediate People's Court of Chongqing Municipality ruled that Wang Peng and two relatives constituted a joint crime using undisclosed information. The investigation and investigation of this case showed that the fund's “mouse warehouse” seriously undermined the integrity of the industry's development and infringed on the rights and interests of investors. The CSRC has always maintained a high law enforcement trend.

  (18) Liu Xiaodong and other use of undisclosed information transactions - private equity fund practitioners "rat warehouse" severely punished

This case is a typical case of a private equity fund practitioner colluding to implement a “mouse warehouse”. Liu Xiaodong is the legal representative and general manager of Shenzhen Fande Fund Management Co., Ltd. (referred to as Fande Fund). From May 2015 to May 2016, Liu Xiaodong and others used their position to know the undisclosed information of Fande Fund products and jointly controlled the use of Liu Xiaodong's securities account to implement the “rat warehouse” transaction. In June 2018, the CSRC imposed administrative penalties on Liu Xiaodong and others. The investigation and investigation of this case shows that private equity institutions and employees must establish a sense of compliance and compliance, and must not break through the legal bottom line and damage the interests of fund property and fund share holders.

  Fourth, fraudulent issue of corporate bond cases

  (19) Wuyang Construction Fraudulent Issuance of Corporate Bonds - First Administrative Penalty for Fraudulent Issuance of Corporate Bonds

This case is the first case of the CSRC for administrative punishment for fraudulent issuance of bonds. In order to comply with the conditions for the public issuance of corporate bonds, Wuyang Construction Group Co., Ltd. (referred to as Wuyang Construction) has made provision for bad debts after the “accounts” of accounts receivable and accounts payable, and defrauded the issuance of bond issuance and approval. Secondary public offering to qualified investors. In addition, Wuyang Construction still has illegal activities such as failing to disclose annual reports in a timely manner and failing to disclose changes in audit institutions in a timely manner as required. In July 2018, the CSRC made administrative penalties for Wuyang Construction and related responsible personnel according to law. The investigation and investigation of this case shows that enterprises must fulfill their information disclosure obligations in accordance with the law through the exchange bond market financing. Law-abiding integrity is the basic requirement for market entities.

  V. Fabricating and disseminating false information cases of securities futures

  (20) Cao Lei fabricated a case of disseminating false information - serious investigation and punishment of the dissemination of false information through the Internet and self-made media

This case is a typical case of using the media to fabricate and disseminate false information about securities futures. On November 20th, 2017, Cao Lei adapted the "2016 Minutes of Financial Institutions Meeting" transferred by WeChat friends to "Opening and Closing Meetings of Financial Institutions and Housing Enterprises in the Securities Regulatory Commission" without any authoritative source and unfulfilled verification obligations. Through the release of the “Shanshiguan City” WeChat public account of its operation, it has produced serious social and market impacts. In January 2018, the CSRC imposed administrative penalties on Cao Lei in accordance with the law. The investigation and handling of this case fully warned the market participants that the new media is not a place of extrajudiciality. It is an act strictly prohibited by law to fabricate the dissemination of false information in securities and futures that seriously disrupts the market order.

(Article source: SFC website)

                (Editor: DF142)

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