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Former Bocom Scrhroders director faces CSRC sanctions for rat trading
By Lu Nengneng |
November 30, 2011, Wednesday
|
Online Edition
Online Edition
THE former investment director of Shanghai-based Bank of Communications Schroders Fund Management Co was arrested for rat trading, and will face sanctions from China Securities Regulatory Commission, the authority said yesterday.
Li Xuli, 37, was detained in late August for trading on non-disclosed information, from which he had made over 10 million yuan (US$1.569 million) in illicit profits.
He allegedly abused his chairman position at the investment committee of Bocom Scrhroders from February 28 to May 25 in 2009, by placing orders for his two personal accounts before or when trading the same stock for the mutual fund he managed.
Two stocks were involved in the rat trading, involving more than 100 million yuan, the commission said.
The once star investment director, who had worked at the fund since 2005 before his resignation in June 2009, face up to 10 years of imprisonment, and or a fine of more or less five times his illegal gains if found guilty.
According to the seventh amendment of the criminal law, which took effect in 2009, a sentence ranging from five years to 10 years in jail will apply to serious rat trading cases. Before that, the maximum imprisonment was five years.
China has been leading a crackdown on illegal stock trading to step up supervision of the mutual fund industry.
Li isn't the first Shanghai-based mutual fund manger to be sentenced for insider trading this year.
Xu Chunmao, formerly of Everbright-Prameric Fund Management Co, who had made more than 2.09 million yuan from rat trading during February 28th 2009 to April 15th 2010, was sentenced to three years behind bars with three years' reprieve in October.
Xie Fenghua, former executive manager of the Investment Department of CITIC Securities who is wanted by Interpol for fraud and insider trading, turned himself in to the Chinese police in June.
In May, Han Gang, formerly from Great Wall Fund Management, received a sentence of one year in prison for insider trading. It was the first criminal penalty applied to such cases in the country.
Li Xuli, 37, was detained in late August for trading on non-disclosed information, from which he had made over 10 million yuan (US$1.569 million) in illicit profits.
He allegedly abused his chairman position at the investment committee of Bocom Scrhroders from February 28 to May 25 in 2009, by placing orders for his two personal accounts before or when trading the same stock for the mutual fund he managed.
Two stocks were involved in the rat trading, involving more than 100 million yuan, the commission said.
The once star investment director, who had worked at the fund since 2005 before his resignation in June 2009, face up to 10 years of imprisonment, and or a fine of more or less five times his illegal gains if found guilty.
According to the seventh amendment of the criminal law, which took effect in 2009, a sentence ranging from five years to 10 years in jail will apply to serious rat trading cases. Before that, the maximum imprisonment was five years.
China has been leading a crackdown on illegal stock trading to step up supervision of the mutual fund industry.
Li isn't the first Shanghai-based mutual fund manger to be sentenced for insider trading this year.
Xu Chunmao, formerly of Everbright-Prameric Fund Management Co, who had made more than 2.09 million yuan from rat trading during February 28th 2009 to April 15th 2010, was sentenced to three years behind bars with three years' reprieve in October.
Xie Fenghua, former executive manager of the Investment Department of CITIC Securities who is wanted by Interpol for fraud and insider trading, turned himself in to the Chinese police in June.
In May, Han Gang, formerly from Great Wall Fund Management, received a sentence of one year in prison for insider trading. It was the first criminal penalty applied to such cases in the country.
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