"Clear Rules and Recognize Risks" Case - The company controller manipulated the stock price and deceived investors into suffering losses

Xian serves as the actual controller, chairman, legal representative, board secretary (acting) of Shanghai Duolun Industrial Co., Ltd. (hereinafter referred to as Duolun Shares) and the actual controller of Duolun Investment (Hong Kong) Co., Ltd. (hereinafter referred to as Hong Kong Duolun) The controller and legal representative actually controls and uses the securities accounts of "Liu Moujie", "Xian Mou" and "Xia Moumei" and 14 trust accounts totaling 28 HOMS trading units (hereinafter referred to as the "account group"), using a variety of Means to manipulate the stock price of "Duolun Shares".

First, Xian controlled the stock price of "Duolun Shares" through continuous trading and trading through concentrated capital advantages and shareholding advantages. From January 17, 2014 to June 12, 2015, the account group held "Duolun Shares" for 60 trading days, accounting for more than 10% of the total share capital, and 179 trading days, accounting for more than 5%. At its peak, the shares accounted for 13.85% of the company's total share capital. Second, Xian used his information advantage to control the pace and content of information disclosure to manipulate the stock price of "Duolun Shares". Xian controlled the account group to buy "Duolun Shares" continuously and in large quantities in advance, and later misled investors by controlling the pace of disclosure of the proposed name change of "Duolun Shares" and the information disclosure content of "Duolun Shares". After the information was disclosed, "Duolun Shares" continued to rise by the limit, and Xian profited from this. Third, Xian manipulated the stock price of "Duolun Shares" by conducting securities transactions between accounts he controlled. The number of "Duolun shares" traded between the securities accounts of the account group actually controlled by Xian accounted for more than 5% of the market trading volume for 30 trading days, and exceeded 10% for 16 trading days, in January 2015. It reached a maximum of 40.27% on the 12th. Fourth, Xian manipulated the stock price of "Duolun Shares" through false declarations. On May 11 and 12, 2015, when the buying orders at the upper limit price were much greater than the selling orders, the account team placed a large number of orders for "Duolun shares" at the upper limit price, and frequently canceled the orders and then placed orders again, which was obviously not the case. For the purpose of completing transactions, false declarations were used to create the illusion that there were many buying orders at the upper limit, which affected investors' judgment. The actual buying volume was zero in both days.

To sum up, Xian affected the trading price and trading volume of "Duolun Shares" and obtained illegal gains by using his concentrated capital advantages, shareholding advantages, and information advantages to continuously buy and sell, trade among securities accounts actually controlled by himself, make false declarations, etc. A total of 578,330,753.74 yuan. Violated the provisions of Item (1), Item (3) and Item (4) of Paragraph 1 of Article 77 of the Securities Law, constituting the illegal conduct mentioned in Article 203 of the Securities Law. Based on the facts, nature, circumstances and degree of social harm of the parties' illegal acts, and in accordance with the provisions of Articles 193 and 203 of the Securities Law, the China Securities Regulatory Commission decided to order Xian to handle the illegal holding of "Duolun Shares" in accordance with the law. For some securities, illegal gains of 578,330,753.74 yuan were confiscated and a fine of 289,165,3768.70 yuan was imposed.

Managers of listed companies should be loyal and diligent to safeguard the interests of the company and investors. However, in this case, the actual controller of the company used the company information he possessed to manipulate the market and seek benefits for himself, causing losses to the majority of investors. Investors should not blindly follow the trend of speculation, nor lend their accounts to others. Be wary of market manipulation and other abnormal trading behaviors, do not give lawbreakers an opportunity to take advantage of, and safeguard their legitimate rights and interests.