Investor trio jailed for insider trading

THREE investors who took advantage of insider information about a company’s plan to purchase a Hong Kong-based firm and bought large amounts of both companies’ shares have been jailed for up to nine years and fined 240 million yuan (US$33.8 million), the No. 1 Branch of Shanghai People’s Procuratorate announced yesterday.

Prosecutors said it was the nation’s first criminal insider trading case through the Shanghai-Hong Kong Stock Connect.

In May 2017, Sang, vice chairman of an equity investment bank’s headquarters, learned about a listed company’s plan to purchase a Hong Kong-based firm and bought more than 140,000 shares of the former.

He shared the information with two men Wang and Chen, who later bought over 7.5 million shares of the Hong Kong company through the ShanghaiHong Kong Stock Connect.

Two months later, the Hong Kong company released a company acquisition announcement and the listed company’s stock resumed trading.

Sang made over 130,000 yuan from the illegal trade, with Wang and Chen making more than 1.71 million yuan and 120 million yuan, respectively.

Sang was sentenced to nine years in jail and fined 12 million yuan for insider trading and revealing insider information.

Chen also got nine years and a fine of 240 million yuan. Wang was sentenced to three years in prison with a three-year reprieve and fined 1.72 million yuan.

Since 2014, Shanghai prosecutors have charged 132 suspects in 74 cases related to securities and futures with crimes of revealing insider information and insider trading, seeing a yearly small increase.