Control 71 accounts to manipulate stocks, super "Niu San" fined 450 million yuan

  The China Securities Regulatory Commission recently announced an administrative penalty decision. Pan Rizhong manipulated 4 stocks including "Tiantie Co., Ltd.", "Jiaao Environmental Protection", "Dingjie Software" and "Rip Biotechnology" by controlling 71 securities accounts and confiscated a total of 2.23 illegal income. A total of 446 million yuan was fined and confiscated with the same amount of fines.

"Niu San" Pan Rizhong argued that "I don't have a high level of education, and I don't understand the trading rules, laws and regulations", which was rejected by the China Securities Regulatory Commission.

  Use multiple methods to influence stock prices and trading volume

  The survey showed that from December 19, 2018 to March 1, 2019, Pan Rizhong controlled 31 accounts and used various methods to influence the trading price and volume of "Tiantie shares", resulting in a profit of 37.45 million yuan.

Tiantie Co., Ltd. is a high-tech enterprise specializing in R&D, production and sales of rail engineering rubber products.

Tiantie's revenue and net profit have maintained a growth momentum in the past three years, with the latest market value of 12.6 billion yuan.

  From January 14 to February 15, 2019, Pan Rizhong controlled the use of 32 accounts and used various methods to influence the transaction price and volume of "Jiaao Environmental Protection", resulting in a profit of 33.64 million yuan.

Jiaao Environmental Protection is a company limited by shares specializing in the research and development, production and sales of environmental plasticizers and stabilizers.

In the past three years, Jiao’s environmental protection revenue has maintained growth. Last year’s net profit fell by 40% year-on-year. The latest market value is currently 3.1 billion yuan.

  From March 14th to April 15th, 2019, Pan Rizhong controlled the use of 42 accounts, concentrated capital advantages and shareholding advantages for continuous trading, which affected the transaction price and transaction volume of "Dingjie Software" and made a profit of 133 million yuan.

Dingjie Software mainly engages in consulting, sales and service of information construction and management software for manufacturing, circulation and micro-enterprises.

In the past three years, Dingjie Software's net profit has maintained growth, but the net profit of the first three quarters of this year has declined slightly, and the latest market value is 6.1 billion yuan.

  From April 1st to May 22nd, 2019, Pan Rizhong controlled the use of 49 accounts and used various methods to influence the trading price and volume of "Ripple Bio", resulting in a profit of 19.37 million yuan.

Ruipu Biology is a high-tech enterprise serving the animal health industry, mainly engaged in the research and development, production, sales and technical services of veterinary biological products and veterinary preparations.

In the past three years, Ruipu Biotech's revenue and net profit have both grown rapidly, and the latest market value is 10.8 billion yuan.

  Request for mitigation of punishment on the grounds of low education

  During the hearing, Pan Rizhong and his agent filed a request for a reduced punishment and only the illegal gains were confiscated.

The reasons put forward by Pan Rizhong and his agents include: Pan Rizhong did not have the intention to manipulate the securities market.

Pan Rizhong is not well-educated, does not understand securities trading rules and related laws and regulations, and is not clear about the trading methods of the stocks involved in the case.

Pan Rizhong was the first offender and actively cooperated with the investigation after the incident, and the punishment should be mitigated in accordance with the law.

Pan Rizhong was willing to work hard to raise funds and return the profits; he requested a mitigation of punishment.

The penalty amount stipulated in the advance notice is too high, which will seriously affect Pan Rizhong's life and the operation of the company and investment projects.

  The CSRC will not accept the party's statement of defense

  After review, the CSRC believes that the parties have the subjective intent to manipulate the market.

In order to implement manipulative behavior, Pan Rizhong intervened in securities accounts through self-intervention or allotment intermediaries, controlling and using 71 securities accounts in total, concentrating on the advantages of funds and holdings, and using continuous trading, reverse and other means to influence "Tiantie" and "Jia". The trading prices and trading volume of “Australian Environmental Protection”, “Dingjie Software” and “Rip Biotech” disrupted the order of the securities market, which is enough to determine that Pan Rizhong has the intention to manipulate the above four stocks.

  The ignorance of laws and regulations and the unclear nature of the transaction made by Pan Rizhong and his agents did not constitute a reason for exemption.

The illegal income in this case was calculated correctly.

Illegal income refers to all the profits obtained by the parties involved in the manipulation. The illegal income calculated in this case has been deducted from relevant transaction taxes and fees. The illegal income proposed by Pan Rizhong and his agent should be deducted from the cost of capital allocation. There is no legal basis.

  The CSRC will not accept the statement and defense opinions of the parties concerned.

  Text/Reporter Liu Shenliang Co-ordinated by Yu Meiying