Everbright executive sues CSRC over punishment

The former head of a trading unit at mainland brokerage Everbright Securities has filed a lawsuit against the China Securities Regulatory Commission to contest punishment he received for insider trading last year.

Yang Jianbo, former general manager of a trading unit at Everbright, and three colleagues were banned for life from the securities industry and fined 600,000 yuan (HK$762,000) each by the regulator in August after an investigation determined they had committed insider trading.

"[The CSRC's] punishment towards me is illegal behaviour," Yang said yesterday.

The regulator found that after a computer malfunction during morning trade on August 16, which caused Everbright to take a 7.27 billion yuan long position in an exchange-traded fund, Yang and his colleagues committed insider trading by partially unwinding that position in the afternoon without properly disclosing the original trading error.

Yang said the existence of a trading error did not qualify as inside information. "In the whole world, no one considers mistaken orders to be inside information," he said.

He said the CSRC never included mistaken orders in its definition of inside information, but only designated it as such after the Everbright incident occurred.