China fines brokerage $109 million for stock market chaos
BEIJING (AP) - One of China's biggest securities firms was fined a record S$ million on Friday and its former CEO was banned from the industry after computerized trading mistakes caused wild swings in Chinese stock prices two weeks ago.
A multibillion-dollar avalanche of buy orders from Everbright Securities on Aug 16 propelled China's main market index up 6.5 per cent before it fell back and ended the day down. Regulators blamed a design flaw in Everbright's computerised trading system.
In addition to the 523 million yuan (S$109 million) fine, the highest ever imposed on a Chinese brokerage, regulators will seize 87.2 million yuan in improper trading profits, state media reported, citing China's market regulator.
The penalties reflect Beijing's willingness to punish securities executives severely, in contrast to what critics complain is reluctance by regulators in the United States and elsewhere to pursue misconduct by managers of major financial firms.