Bottom of Form | China fines repeat offender USD170m for stock manipulation

Chinese regulators seem to have run out of patience with Tang Hanbo.

The China Securities Regulatory Commission on Friday ordered Tang to pay a total of 1.17 billion yuan (USD170 million) in two cases of stock market manipulation, one of which was the first to involve trading through the stock connect between the mainland and Hong Kong. Tang, 43, has been punished for illegal trading at least twice before. But it appears his previous penalties from the CSRC, which include 39 million yuan in 2014 and 15 million yuan in 2015, weren’t enough to deter his bad behavior.

On Friday, Tang, a Chinese national based in the city of Shenzhen, was ordered to pay 251 million yuan for allegedly using the link between the Shanghai and Hong Kong exchanges to manipulate a Shanghai-listed stock, Zhejiang China Commodities City Group Co. He was also hit with 925 million yuan in fines and disgorgement over domestic trades carried out from December 2014 to April 2015.

“It seems to be the record fine imposed by CSRC on individuals by amount so far,” said Eric Liu, a partner at Zhao Sheng Law Firm in Shanghai. “This is not the first time Mr. Tang was sanctioned by CSRC for manipulating stock prices and that is one of reasons why the fine amount is that high.”

The penalties imposed on Tang are smaller than the 3.47 billion yuan the CSRC plans to impose on Xian Yan, a former controller at Guangxi Future Technology Co. The regulator will penalize Xian for suspected violations on information disclosure and stock manipulation, spokesman Zhang Xiaojun said at a briefing on Feb. 24. The penalties haven’t been officially announced by the CSRC.

Trading Chinese stocks using connect-enabled accounts in Hong Kong has less regulatory oversight because mainland regulators and exchanges have real-time identification of every investor. Authorities in Hong Kong can only get such data by requesting it from brokers.  Bloomberg