Error costs Everbright millions

BEIJING. August 31. KAZINFORM It took only three minutes. The operational error made by Everbright Securities two weeks ago has earned it a 523 million yuan ($85 million) fine from the nation's top securities regulator, for insider trading, release of misleading information, and muffed risk control.
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That is the largest fine the regulator has ever given a securities brokerage in the history of the country's stock market.

China Securities Regulatory Commission announced the punitive measures on Friday after a two-week investigation of Everbright Securities' near hysterical trading behavior that shocked the domestic A-share market on Aug 16.

The brokerage will be fined five times its insider-trading-related gains, the CSRC spokesman said.

In addition, Everbright Securities' former president Xu Haoming, assistant executive Yang Chizhong, general manager of the accounting department Shen Shiguang and general manager of the strategic investment department Yang Jianbo were each fined 600,000 yuan. And they were all banned from the securities industry for life, Xinhuanet reported.

Xu resigned after the firm caused the biggest swing in the benchmark stock index since 2009.

Mei Jian, secretary of the board of directors of Everbright Securities, was fined 200,000 yuan for giving the media erroneous information on how the abnormal market fluctuation occurred, an error that influenced investors' decisions that day.

The CSRC also banned the securities company from proprietary trading for three months and suspended approval for new Everbright services.

The penalties may hurt the company's business and its brand reputation, possibly causing its shares to drop sharply next week, analysts said.

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