The Secretary of the chairman of the board of directors of a listed company, who made 100,000 yuan by stealing insider information, was sentenced to three years'imprisonment
When the Secretary of the chairman of a listed company cleaned the office of the chairman, he saw the company's foreign acquisition documents. He obtained insider information by taking pictures and eavesdropping. He bought nearly two million yuan of company stock and made a profit of 100,000 yuan. Details of the bizarre insider trading case came to light with the release of the first-instance verdict of the case on September 19 by the China Judicial Documents Network.
The Secretary of the board photographed and tapped inside information.
Buy nearly 2 million yuan stock
The listed company involved is Longxing Chemical Co., Ltd. (hereinafter referred to as "Longxing Chemical"), listed on the SME board of Shenzhen Stock Exchange in 2010. The chairman of Longxing Chemical Industry is Liu Mou, who is the Secretary of the case. During the failed overseas acquisition of Longxing Chemical Company in 2014, LAN Jiao manipulated the insider dealing.
On July 28, 2014, Long Xing Chemical Chairman Liu Mou met with Dai Mou, a Chinese-American, and the two sides negotiated a framework for Long Xing Chemical's proposed acquisition of Dai Mou-controlled U.S. educational assets. On Nov. 20, 2014, Longxing Chemical Company issued the "Stop Notice on Major Asset Restructuring" and the stock market was suspended. On May 8, 2015, Longxing Chemical Company issued the "Notice on Termination of Major Asset Restructuring and Company Securities Restructuring", saying that the restructuring failed and resumed trading on the same day. Therefore, the inside information on Longxing Chemical's proposed acquisition of US educational assets will be formed no later than July 28, 2014, and will be made public on May 8, 2015.
According to Liu's testimony, in September 2014, Dai sent an e-mail to Long Xing Chemicals Director Mi Jiang about the American education management company. Jiang printed out the contents of the mail and sent it to Liu, who had about six or seven pages of paper. Liu looked at these pages and put them on his desk. Later he couldn't find the document. He asked his secretary, Lanjiao. Lanjiao said that she had collected these pages and that she had scanned them into her computer to save them for future convenience.
Lanjiao's main job is to clean the office of Liu, the chairman of the board of directors, organize documents, and act as Liu's agent to deal with internal mail. According to Lan Jiao's testimony, when she saw the papers on the chairman's desk about the company's foreign acquisition and equity changes, she felt that "the company is going to make a big move," and the papers "touched her very much" because of the company's declining performance, there were many attempts to seek transformation around 2014, and there were also some. This action is not as good as this one. Later, LAN Jiao had the intention of buying shares in the company.
In addition, Lan Jiao also observed that between August and November 2014, Liu and the company's vice chairman Yu, Dong Mijiang frequent business trips, and Jiang is responsible for the company's securities business, so she is more confident that the company will have a significant advantage, the stock will rise. Around November 17, 2014, when Lanjiao heard Liu's phone call, she had the intention to stop trading. "I feel good things are coming, and it's too late to buy them." So she sold all the stocks she had before the company stopped trading. In addition, she raised some money and bought all the stocks of Longxing Chemical Industry. "At that time, I wanted to buy a long Star Chemical Stock for a penny and wait for the proceeds."
What's interesting is that some of the money bought by Lanjiao is borrowed from the boss. According to her testimony, she raised about 200,000 yuan of all the money in her family. In addition, she borrowed 600,000 yuan from Liu, who lied about doing a dump car business, and put it into the stock market. Later, after the company's stock resumed, Lanjiao sold the stock and Liu's money.
On May 8, 2015, Longxing Chemical Stock resumed trading on the first day of trading, Lanjiao is the day to sell its shares. She said that if the SFC did not investigate her, she would certainly not sell, because the SFC has detected that she believes that less income is likely not to be suspected of criminal offences, if too much income on the crime.
The court found that from July to November 20, 2014, Lan Jiao used her account to buy 292,000 shares of Longxing Chemical Co., Ltd. with a total amount of 1975,511,000 yuan and an illegal profit of 1055,945,580 yuan.
Finally, the Shijiazhuang Intermediate People's Court of Hebei Province ruled that the defendant, Lan Jiao, was guilty of insider trading and sentenced to three years'imprisonment, four years' probation and a fine of 120,000 yuan.
Get insider information unknown
In this case, Shijiazhuang People's Procuratorate charged another defendant, Hou Yongli, is an acquaintance of Lanjiao. The procuratorate accused him of spilling inside information from Lanjiao and buying large quantities of Longxing chemical stocks, which constituted the crime of insider trading. But in the end Hou Yongli was acquitted.
Hou Yongli, the owner of a jewelry store in Shahe City, knew Lanjiao in 2010, began to want to speculate in 2014, and knew that Lanjiao had been speculating in stocks, so she asked Lanjiao to help him buy and sell stocks. Lanjiao controlled Hou Yongli's securities account number and password, helped her speculate for about a month, earned about 40,000 yuan, about the end of October 2014, Hou Yongli stopped asking Lanjiao to help her speculate.
In November 2014, Hou Yongli opened accounts with her parents, nephews, classmates, two nephews, two employees and a friend, all of which were controlled by Hou Yongli, with a total investment of about 15 million yuan and all of which bought shares in Longxing Chemical. During the period from July 28 to November 20, 2014, the account controlled by Hou Yongli purchased Longxing Chemical Stock amounting to $15,584,196,08,000, with a profit of $177,881,780,000.
According to Hou Yongli's testimony, in July and August 2014, she saw the news of the reorganization of Longxing Chemical Industry on the Internet. She asked if Lanjiao wanted to reorganize. Lanjiao said she didn't know. Hou Yongli also asked the leader of Lanjiao what Liu was busy with. Lanjiao said the leader was busy and often traveled on business. Hou Yongli felt that the news of the reorganization should be true. Later she went to Longxing Chemical Company to find Lanjiao, asked how the benefits of Lanjiao company, Lanjiao said okay, she thought "good news should be accurate".
Lanjiao said she had not told Hou Yongli or anyone else about the restructuring and suspension of the company. Hou Yongli also said that Lan Jiao did not tell him about Longxing Chemical Industry. In addition, Hou Yongli also knows the chairman of Longxing Chemical Co., Ltd. Liu Mou, but Hou did not ask Liu about the company before he bought large-scale Longxing chemical stocks.
In the indictment, only witness Liu testified that Lan Jiao had said to him that the information that Hou Yongli purchased Longxing Chemical Stock was that Lan Jiao told Hou Yongli. Shijiazhuang Intermediate Court holds that on the one hand, Liu's testimony belongs to solitary evidence; on the other hand, Liu said in the SFC investigation that he disclosed to Hou Yongli that the reorganization of Longxing Chemical Company was very smooth, and later denied the plot to the SFC, the investigation organs also failed to convert the testimony, so Liu said Lanjiao. Testimony of Hou Yongli's disclosure of internal information proved doubtful.
The key to judging whether Hou Yongli is guilty is that she gets the source of insider information. In this regard, the court's review is based on the Oriental Fortune net share. The information about "restructuring and acquisition" in Longxing Chemical Stock Bar of Dongfang Fortune. com was shown and discussed many times during the suspension announcement from the end of August to November 20, 2014. For example, on August 29, 2014, "restructuring stocks have foreboding suspension of surge such as Great Wall computer, Wanhao Wanjia", September 2, 2014 "best integration: restructuring + promotion = wealth", November 12, 2014 "today listen to a friend of Dragon said to buy." The court held that the existing evidence could not rule out Hou Yongli's excuse for learning from the Internet that Longxing Chemical might have "reorganization, acquisition" information.
The indictment accused Hou Yongli of using relatives and friends to open a securities account and buy a large number of chemical stocks in Longxing before the suspension of trading. The relevant evidence proves that the fact, Hou Yongli argues that it is to avoid triangular debt. The court held that Hou Yongli's transaction was indeed abnormal, but the evidence of the whole case shows that Hou Yongli's "insider information" is not clear, and that she belongs to the person who illegally obtains insider information and constitutes the crime of insider trading is insufficient.
Author Gu Zhijuan
Editor in chief: Yan Hong Liang
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