New | Chinese regulator fined half a billion yuan for trading shares under in-laws’ names
Feng Xiaoshu, a former IPO reviewer, pocketed 248 million yuan profit trading stock using accounts of his mother-in-law and sister-in-law
A regulator responsible for reviewing initial public offerings in China has been banned for life and fined almost half a billion yuan for trading stocks under his mother-in-law’s and sister-in-law’s names.
Feng Xiaoshu (馮小樹), a former member of the review committee under the China Securities Regulatory Commission (CSRC), bought a large amount of shares in a company ahead of its IPO using accounts in his relatives’ names and sold them after the firm’s debut for an illicit profit of 248 million yuan.
Feng’s behaviour has violated the securities law and seriously disturbed the order on the securities market
He faces a lifetime ban from the securities market and a fine of 499 million (US$72.5 million) yuan, CSRC spokesman Zhang Xiaojun said in a media briefing in Beijing on Friday. The fine comprises the money he pocketed from the deal and a separate penalty of 251 million yuan.
“Feng’s behaviour has violated the securities law and seriously disturbed the order on the securities market,” Zhang said.
Feng’s case is the latest scandal to rock China’s financial markets as regulators crack down on misconduct and activities they see as having a destabilising effect on markets.
The mainland’s review-based IPO approval system has been criticised by investors for giving reviewers too much power, while suppressing the function of the market.