In China, a man was fined more than 428.07 million yuan for manipulating stock prices in eight stocks with 145 stock accounts.
According to local media reports in China on the 29th, the China Securities Supervisory Commission recently announced a decision to punish individual investors. Wang Baowen, 59, of Fujian province, was manipulating stocks, illegally using 145 private stock accounts at a securities firm.
From February 3 to November 6, 2020, he repeatedly bought and sold eight stocks through his 145 accounts, changing stock prices.
He used 54 of his accounts to buy 6.89 million shares in one stock. This was equivalent to 5.32% of all issued stocks, and the stock price rose 47.33% from 12.38 yuan to 18.24 yuan in an instant.
When the stock price rose to the level he wanted, he made profits by selling all of them. In this way, his nine-month profit amounted to 142.69 million yuan.
Judging that his actions violated Articles 55 1 and 3 of the Securities Act and constituted a “securities market manipulation” in Article 192, the Securities and Supervisory Commission ordered him to confiscate all of his unjust enrichment and pay a fine of 428.07 million yuan, three times his profits.
This is the largest amount of fines for individual investors in 2022. In China, a large fine was imposed on an individual investor last year.
At the end of 2021, investors in their 40s manipulated four stocks using 71 accounts, and they had to pay the final 446 million yuan as a fine.
Wang and his legal representative refuted the Securities Regulatory Commission’s ruling, saying the fine was excessive. They argued that the transaction was minor and that the degree of social damage was small. He also asked for normal consideration of his active cooperation in the investigation.
But China’s Securities and Exchange Commission rejected his counterargument, saying the three-fold fine is reasonable because it has caused a social stir just by using other people’s accounts and manipulating stock prices for a long time.
Meanwhile, China’s Securities Supervisory Commission strengthened punishment for stock market manipulation during the revision of the Securities Act in 2019 to root out continued illegal stock price manipulation. If profits are generated illegally by manipulating the stock market, the regulations have been strengthened to confiscate all profits and impose fines up to 10 times.