CSRC faces challenge over its powers in Everbright lawsuit

Yang Jianbo waved off questions about his own prospects, insisting the lawsuit that pits him against the mainland's securities regulator will eventually help enhance transparency in the policy-driven stock market.

The former head of a trading department at Everbright Securities, who was banned for life from the securities industry following chaotic trading in August last year, admitted that the decision to sue the China Securities Regulatory Commission was aimed at protecting his own reputation in the first place.

But Yang, 37, said there was another motivation - forcing the CSRC to properly use its power to regulate the market.

"I have my responsibility over the erroneous trading and have already become a negative example," he told the South China Morning Post. "But the regulator's punishment was by no means justified."

On the morning of August 16 last year, a computer bug caused Yang's department to mistakenly place a buy order worth 7.27 billion yuan (HK$9.2 billion) that propelled the key indicator up by more than 5 per cent.

Everbright pared its position in the afternoon to cut losses before issuing a statement to the public, while the CSRC slapped a record fine of 523 million yuan on the firm, citing the resulting share sales on the Shanghai stock exchange and short-selling on the China Financial Futures Exchange as "insider trading".