In October, China heard its very first stock manipulation case at the Beijing Second Intermediate People’s Court. Trader Wang Jianzhong, who was detained by police in January last year, has been charged with stock manipulation. He faces a maximum sentence of five years imprisonment and a fine of RMB$625m.

The China Securities Regulatory Commission (CSRC), which began the investigation in May 2008, has already confiscated RMB$125m in illegal gains from Wang and has issued an administrative penalty fine totaling RMB$125m. Wang is accused of opening nine accounts under different names from 2006-2008 and trading on manipulation of share prices while he was chairman, executive director and the largest shareholder of Beijing Shou Fang Investment and Consulting Company.

He is alleged to have received gains totaling RMB$125m by using his company’s influence to recommend securities through various media outlets. According to the indictment, Wang manipulated the market 55 separate times from 2007-2008, and traded 38 types of securities including ICBC and China Unicom shares.

The Hefei Municipal Intermediate People’s Court in Anhui province has also commenced proceedings against Wang’s two older brothers – Wang Jianhua and Wang Qianyi – along with Zhao Zihong, Wang’s ex-brother-in-law. They are charged with money laundering and helping Wang conceal illegal earnings of more than RMB$385m. ALB

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