To quickly raise huge amounts of funds, the financing company provides one-stop services; a villa of more than 1,000 square meters, more than 100 computers, and more than 10 traders operating at the same time; the suspects involved refused to cooperate with the investigation, and even violently resisted the law, snatched and tore relevant financial information, and scratched investigators…
From February to May 2017, illegal profits of 945 million yuan were made in just a few months. The plot of the Xiamen Beibadao Group's suspected market manipulation case is comparable to that of a movie blockbuster. The China Securities Regulatory Commission imposed a maximum penalty of "no one penalty and five fines" on Beibadao Group, with a total fine of approximately 5.67 billion yuan. This is the largest fine ever issued by the China Securities Regulatory Commission.
Today, the Beiba Road market manipulation case that received "the largest fine in the history of the Securities Regulatory Commission" has made the latest progress.
1. A fine of 300 million was imposed and 8 people were sentenced.
According to the Securities Times, on October 27, the Shanghai No. 1 Intermediate People’s Court (referred to as Shanghai No. 1 Intermediate Court) publicly pronounced the verdict of the defendant unit Beibadao Group Co., Ltd. (hereinafter referred to as Beibadao Group), defendant Lin Qingfeng and other eight people in the case of manipulating the securities market in accordance with the law (the defendant Gong Xue was sentenced in an online video method), and the Beibadao Group was charged with manipulating the securities market. was sentenced to a fine of RMB 300 million (the following currencies are all in RMB); Lin Qingfeng was sentenced to eight years and six months in prison for manipulating the securities market and fined 10 million yuan; seven defendants, including Lin Yuting and Li Junmiao, were sentenced to five years and six months to one year and seven months in prison for manipulating the securities market, and fines ranging from 1 million to 200,000 yuan were imposed.
According to Guangzhou Daily, the market manipulation case of Beibadao Group was one of the 20 typical illegal cases previously announced by the China Securities Regulatory Commission in 2018. The China Securities Regulatory Commission imposed a maximum penalty of forfeiture of one and a fine of five yuan on Beibadao Group. The total amount of fines and confiscations was approximately 5.67 billion yuan, which was the largest fine issued by the China Securities Regulatory Commission in the history of administrative penalties.
The Shanghai No. 1 Intermediate People's Court stated that after trial, it was found that the defendant Lin Qingfeng was the actual controller of Beibadao Group. Starting from the second half of 2016, in order to gain capital and shareholding advantages in the securities market, Lin Qingfeng instructed the defendants Lin Yuting, Li Junmiao, He Yinghua and others to contact the defendant Zhang Dinghai and other fund allocation intermediaries to obtain huge amounts of funds and a large number of securities accounts at a capital allocation ratio of 1:3 to 1:10. Among them, Zhang Dinghai illegally provided more than 1.098 billion yuan in funds to Beiba Dao Group and 119 other people's securities accounts.
Lin Qingfeng concentrated the above-mentioned capital allocation funds and other people's securities accounts, together with some of Beiba Dao Group's own funds and actual controlled securities accounts, and arranged a trading team composed of defendants Cai Yongdong and Huang Huikang, employees of Beiba Dao Group and Xiamen Liuhu Yacht Club Co., Ltd., a subsidiary of the group, to use hundreds of computers and wireless network cards and other equipment without real-name registration in Xiamen, Shanghai, Kunming and other places to continuously buy and sell stocks or buy and sell stocks between accounts under his actual control, affecting stock trading prices and trading volumes.
From February 14 to March 30, 2017, Beibadao Group used 333 securities accounts, and the number of circulating shares held by "Jiangyin Bank" reached more than 30% of the total actual circulating shares of the security during the same period. The cumulative trading volume for "Jiangyin Bank" for 33 consecutive trading days reached more than 30% of the total trading volume of the security during the same period. As of May 9 of the same year, the account group controlled by Beibadao Group had illegally made more than 301 million yuan.
The Shanghai No. 1 Intermediate People's Court held that seven directly responsible managers and other directly responsible personnel including the defendant Beibadao Group and the defendant Lin Qingfeng, together with Zhang Dinghai, a capital allocation intermediary, concentrated on capital advantages and shareholding advantages to continuously trade and manipulate the securities market, affecting the securities trading price and volume. Their actions constituted the crime of manipulating the securities market, and the circumstances were particularly serious. Taking into account the facts, nature, circumstances and degree of social harm of the entire case, the Shanghai No. 1 Intermediate Court made the above judgment in accordance with the law.
2. Destroyed evidence, scratched inspectors, and was fined 5.67 billion by the China Securities Regulatory Commission.
It is worth noting that the Beiba Dao market manipulation case was one of the 20 typical illegal cases previously announced by the China Securities Regulatory Commission in 2018. The China Securities Regulatory Commission imposed a maximum penalty of not one penalty on Beiba Dao Group and a fine of five yuan on Beiba Dao Group. The total amount of fines and confiscations was approximately 5.67 billion yuan, which was the largest fine issued by the China Securities Regulatory Commission in the history of administrative penalties.
According to Brokerage China, in 2018, the China Securities Regulatory Commission announced three administrative penalties and one market ban decision. Beibadao and its relevant responsible persons received a 5.67 billion yuan compensation case for actually controlling more than 300 securities accounts such as "Chen Mouteng" and manipulating "Zhangjiagang Bank", "Hesheng Shares", "Jiangyin Bank" and other new stocks. The sky-high fines were imposed. At the same time, Lin Qingfeng, the then legal representative of Beiba Road, and Lin Yuting, the controlling shareholder, were banned from the securities market for life; Li Junmiao, the actual controller of Beiba Road (Xianyang) Logistics, was also banned from the securities market for 10 years.
According to the investigation by the China Securities Regulatory Commission, Beibadao manipulated secondary stocks of Zhangjiagang Bank, Hesheng Bank, and Jiangyin Bank. There are five main ways:
Under the influence of the above-mentioned manipulation techniques, from February 10 to April 12, 2017, Beibadao used the advantages of centralized funds and shareholding advantages to conduct continuous transactions and trade between securities accounts actually controlled by itself, which affected the transaction price of "Zhangjiagang Bank" and made a profit of 466,894,890.32 yuan. From February 10 to April 12, 2017, the share price of "Zhangjiagang Bank" rose by 109.55%. During the same period, the Small and Medium Enterprises Composite Index rose by a cumulative 2.74%, a deviation of 106.81 percentage points.
From February 7 to February 17, 2017, the Beibadao Control Account Group concentrated on its capital advantages and shareholding advantages to continuously trade "Hesheng Shares", affecting the transaction price and making a profit of 138,752,520.32 yuan. From February 7 to February 17, 2017, the share price of "Hesheng Shares" rose by 53.38%, deviating from the small and medium-sized board composite index by 52.58 percentage points during the same period.
From February 10 to May 9, 2017, Beiba Dao used 297 accounts in its control account group to continuously and intensively trade "Jiangyin Bank" by taking advantage of its capital and shareholding advantages. At the same time, it traded among accounts actually controlled by itself, affecting the transaction price of "Jiangyin Bank" and making a total profit of 339,223,805.59 yuan.
Investigators from the China Securities Regulatory Commission said that the perpetrators in the Beibadao case used intermediaries to drive leveraged companies. On the one hand, they quickly mobilized huge amounts of funds. On the other hand, they used hundreds of seemingly unrelated stock accounts to carry out manipulations and hide illegal activities behind these accounts, making their manipulations more covert.
Beibadao used a variety of means to manipulate the stock prices of listed companies, and the amount involved was particularly huge. Relevant personnel also obstructed and resisted supervision by deliberately concealing and destroying important evidence. Law enforcement officers were prevented from exercising their powers of supervision, inspection, investigation and evidence collection in accordance with the law. Its group executives and relevant personnel refused to cooperate with the investigation, and the accounting personnel scratched the CSRC auditors in order to destroy evidence.
The China Securities Regulatory Commission believes that Beibadao used "cruel" and "evil" manipulation techniques to "cut leeks" and should be punished with the maximum penalty of "no one and a fine of five". The amount of fines and confiscations reached 5.67 billion yuan. Lin Qingfeng, the legal representative of Beibadao at the time, and Lin Yuting, the controlling shareholder of Beibadao at the time, played an organizational and leadership role as the main person in charge of Beibadao. Their behavior was particularly bad and seriously disrupted. In order to maintain order in the securities market, he was banned from the market for life and fined 1.8 million yuan each. The other directly responsible personnel were Li Junmiao, the then general manager and head of the capital allocation business of Beiba Road. As the specific responsible person, the illegal behavior was egregious in nature, seriously disrupting the market order, and seriously damaging the interests of investors. He was banned from the market for 5 years and fined 1.2 million yuan.
According to Jiemian News, before the huge fine was issued by the China Securities Regulatory Commission, Lin Qingfeng, the actual controller of Beibadao, was trying to "escape" through industrial and commercial changes, entrusting the equity of many Beibadao companies to others and hiding behind the scenes in an attempt to evade administrative penalties. After receiving a huge penalty, Beibadao was dissatisfied and filed a lawsuit with the China Securities Regulatory Commission, but was rejected by the court in both the first and second instances.
