["Investor Protection · Clear Rules, Know Risks" Series]

 

Source: Investment Education Center of Shenzhen Stock Exchange

From July 5 to July 12, 2016, the account group manipulated the lifting and opening period of A shares. From July 5 to 8, the stock price was relatively stable, and the account portfolio included the purchase of 9,005,900 A shares. On July 11, the account group began to create a daily limit trend: 14:03:18 to 14:06:13. After raising the stock price to the daily limit, it continued to declare buy orders at the daily limit price, and a total of 29 transactions totaling 6.093 million shares were subscribed. As of the close of the day, the untraded limit-price buy orders of the account group reached 5,748,600 shares, accounting for 51.73% of the total market untraded limit-price buy orders. See the chart below for the stock price trend on July 11:

On July 12, the account team copied the trading method on July 11: 14:29:13 to 14:32:34. After raising the stock price to the daily limit, it continued to declare buy orders at the daily limit price. A total of 23 purchase orders totaled 509.86. Million shares. As of the close of the day, the number of untraded daily limit price buy orders in the account group reached 3.9363 million shares, accounting for 49.14% of the total market untraded limit price buy orders. A slight difference from July 11 is that on July 12, the account group began to ship during the process of pulling up, and the net sold 1,911,600 shares that day. See the chart below for the stock price trend on July 12:

Article 77 of the Securities Law prohibits market manipulation and lists four manipulation methods. In this case, Ma XX and Cao XX violated the provisions of items (1), (3), and (4) of the first paragraph. They were "alone or through collusion, pooled capital advantage, shareholding advantage or Use information superiority to unite or continuously buy and sell, manipulate securities transaction prices or securities transaction volume", "make securities transactions between accounts actually controlled by oneself, affect securities transaction prices or securities transaction volume" and "manipulate the securities market by other means."

 

The illegal entity in this case made a profit of 22.88 million yuan in 8 trading days by manipulation, and was eventually confiscated by the China Securities Regulatory Commission, and fined a total of 68.65 million yuan. In A stock trading, if investors follow suit and buy on July 12 or 15, they are likely to suffer a large loss in a short period of time, and there is even no chance to stop the loss under the limit state. Therefore, for stocks with irrational changes in prices, investors should comprehensively analyze the company’s operating conditions, compare it horizontally and vertically with companies in the same industry, and find the basis for the intrinsic value of the stock. Don’t blindly follow the rise, or be superstitious about the daily limit, and avoid participating in stocks. Excessive speculation in the market has formed good investment habits.

 

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