Employees fined for using the computer of the sales department to speculate in stocks of Changjiang Securities Business Department

category:Finance
 Employees fined for using the computer of the sales department to speculate in stocks of Changjiang Securities Business Department


This year, Changjiang Securities attracted much attention from the market. In August, the company reported a half year report showing a double decrease in net profit of revenue; the classification rating results of securities companies published by CSRC showed that Changjiang Securities was upgraded to level 4, from CCC to a; what attracted market attention was that the semi annual report showed that 10 financial indicators, such as risk coverage, capital leverage ratio and liquidity coverage, reached the early warning level.

Then, Changjiang Securities issued 7.2 billion yuan of bonds in August and September, but the asset liability ratio also increased significantly. As of September 30, 2020, the companys accumulated new loans accounted for 67.5% of the net assets at the end of the previous year.

The Changjiang Securities Business Department was ordered to rectify the problem of financing on behalf of customers

On the evening of October 20, Beijing Securities Regulatory Bureau issued a notice to order the securities business department of Changjiang Securities Beijing Wanliu East Road to take corrective measures.

Beijing Securities Regulatory Bureau said that the business department did not take effective measures to strictly regulate the practice of employees, and the supervision on the use of electronic equipment in the office of the business department was invalid, and there was a situation that the employees of the business department used electronic equipment in office places for financing and placing orders on behalf of customers for a long time. This behavior violates Article 6 (4) of the measures for compliance management of securities companies and securities investment fund management companies.

The punishment of Changjiang Securities this time is related to speculating on behalf of customers. On August 11, 2020, the Beijing Securities Regulatory Bureau issued a regulatory letter, punishing Lanjiang, a former employee of Changjiang Securities Beijing Wanliu East Road business department, for privately accepting clients entrustment to buy and sell securities.

According to the punishment decision, during the period from July 2, 2015 to June 30, 2018, Lanjiang, as a securities practitioner, signed four cooperation agreements with his client Xu xsong, and privately accepted his entrustment to buy and sell securities. According to the cooperation agreement, Lanjiang shall guarantee the principal security of Xus account with its own funds, and the annual income shall not be less than 10%. The settlement shall be conducted once every six months. More than 10% of the income shall be owned by Lanjiang, and the part with less than 10% of the income shall be made up by Lanjiang with its own funds.

During the agreement period from July 2, 2015 to June 30, 2018, Lanjiang operated Xus general securities account, credit account and stock option account for securities trading. Among them, the actual trading amount of credit account was 77573781 yuan until August 1, 2018. Lanjiang privately accepted Xus entrustment to conduct securities trading, and eventually lost money, but did not actually make profits.

According to the Beijing Securities Regulatory Bureau, Lanjiangs behavior violates the provisions of Article 145 of the securities law of 2005 that securities companies and their employees shall not privately accept clients entrustment to buy and sell securities without going through their legally established business places.. During the investigation, Lanjiang was able to actively cooperate with the investigation. According to the fact, nature, plot and social harm degree of the partys illegal act, and according to the securities law of 2005, Beijing securities regulatory bureau gave Lanjiang a warning and imposed a fine of 100000 yuan.

According to the statistics of the Financial Association, Changjiang Securities received many penalties from the CSRC for the problems of financial management on behalf of customers and illegal stock speculation, and two related personnel were former employees of Dapeng securities.

On March 30, 2020, Shenzhen Securities Regulatory Bureau announced the administrative supervision measures of Changjiang Securities Shenzhen Branch.

The punishment includes: some subordinate business departments do not supervise abnormal transactions in place, some brokers have illegal financing for customers, and they act as legal persons, shareholders or senior managers of many companies within the validity period of the contract.

On April 28, 2020, Guangdong securities regulatory bureau announced that it decided to order the securities business department of Changjiang Securities in Guangzhou Tianhe North Road to take corrective administrative measures. Guangdong Securities Regulatory Bureau believes that Zhang Weiwen, an employee of Changjiang Securities in Guangzhou Tianhe North Road Securities Business Department, privately accepted clients entrustment to conduct securities trading and agreed to share investment income with customers. On August 12, 2020, Guangdong Securities Regulatory Bureau issued a punishment decision, which imposed a fine of 80000 yuan on Zhang Weiwen.

Zhang Weiwen and Lan Jiang were registered as employees of Dapeng securities in March and May 2004 respectively. Two years later, in 2006, Dapeng securities received a liquidation notice, and then went into bankruptcy proceedings, and its brokerage business was also taken over by Changjiang Securities. On September 17, 2007, the two people registered information with the China Securities Association, and their practice institution was changed to Changjiang Securities.

The securities regulatory system has issued 20 related penalties this year

According to the previous data of the associated press, in 2019, the CSRC issued 8 administrative penalty decisions on illegal stock speculation by securities practitioners, with the minimum penalty amount of 60000 yuan and the maximum of 20 million yuan. The securities companies involved include Dongwu securities, AVIC securities, China CITIC investment securities, Dongguan securities, Zhejiang securities, open source securities, shenwanhongyuan securities, Northeast Securities, etc.

The newly revised Securities Law, which was formally implemented on March 1, 2020, once again makes it clear that if a securities practitioner holds, buys or sells stocks or other securities with equity nature directly or under an assumed name or in the name of another person, he shall be ordered to dispose of the illegally held stocks and other securities with equity nature according to law, confiscate the illegal income, and impose a fine of less than the equivalent value of securities trading.

According to the semi annual report, Changjiang Securities released the semi annual report of 2020. During the reporting period, the company realized a total operating revenue of 3.329 billion yuan, a year-on-year decrease of 10.71%; the net profit attributable to shareholders of listed companies was 942 million yuan, a year-on-year decrease of 13.35%; the net profit attributable to shareholders of listed companies after deducting non recurring profit and loss was 912 million yuan, with a year-on-year decrease of 16.09%; and the basic earnings per share was 0.17 yuan.

According to Changjiang Securities, the companys headquarters is located in the center of Xinguan epidemic, and the development of investment banking projects has been affected to a certain extent during the reporting period, and the progress of some projects has been delayed. Meanwhile, the secondary market in the first half of the year was affected by the epidemic, which caused a certain short-term impact on the companys business.

With the double-digit decline of revenue and net profit, the semi annual risk control index report released by Changjiang Securities also attracted market attention. At the same time, the capital coverage ratio of the Yangtze River and other financial indicators as of June 2020 has reached the regulatory standards, such as the capital coverage ratio of the Yangtze River and the Yangtze River by June 30, 2020.

(net capital risk control indicators of Changjiang Securities; source: announcement of Shenzhen Stock Exchange)

In the face of a number of financial indicators exceeding the standard, Changjiang Securities has taken action for a long time. On August 5, the company completed the issuance of 3 billion yuan of corporate bonds to supplement working capital and repay debts. On September 15, Changjiang Securities announced that the company plans to issue corporate bonds (the second issue) to professional investors with a maturity of 3 years and an issue scale of no more than 5 billion yuan (including). On September 22, the company announced that as of September 21, the company had completed the issuance of corporate bonds, with an actual issuance of 4.2 billion yuan. In addition, the companys public issuance of corporate bonds no more than 15 billion yuan (including) has been approved for registration by China Securities Regulatory Commission [2020] No. 1357 document.

Behind the continuous borrowing and financing, the asset liability ratio is further improved. On October 14, Changjiang Securities announced that as of September 30, 2020, the companys loan balance was 68.465 billion yuan, and the accumulated new loan amount was 19.04 billion yuan. The proportion of accumulated new loans to the net assets at the end of the previous year was 67.5%, more than 60%.

Source of this article: Chen Hequn, editor in charge of CFA_ NB12679