SHANGHAI Feb 20 The Shanghai Stock Exchange and
the China Financial Futures Exchange disputed claims by an
ex-trader at Everbright Securities in a lawsuit
contesting the trader's punishment for insider trading.
The Beijing First Intermediate Court on Tuesday agreed to
accept a lawsuit filed against the China Securities Regulatory
Commission (CSRC) by Yang Jianbo, the former general manager of
a high-frequency trading unit at Everbright. The
CSRC banned Yang and some colleagues from the securities
industry for life and fined them each 600,000 yuan ($98,700)
over trades related to a computer malfunction last August.
"Yang Jianbo's comments about this exchange have many
inaccuracies," the Shanghai Stock Exchange said in a statement
in its Sina Weibo microblog late on Wednesday. It said that it
would deliver supporting documents and evidence to the relevant
The China Financial Futures Exchange said Yang's comments
were "distorted and untrue", the official Xinhua news agency
reported on Thursday.
The CSRC has direct control over both exchanges. Neither
exchange specified which of Yang's claims it believes are
The CSRC found that after a computer malfunction during
morning trade on Aug 16, which caused Everbright to take a 7.27
billion yuan ($1.2 billion) long position in a popular
exchange-traded fund, Yang and his colleagues committed insider
trading by partially unwinding that position in afternoon trade
without properly disclosing the original trading error.
Yang's lawsuit claims, among other things, that Everbright
communicated with CSRC and exchange officials before initiating
the hedging transactions and that they did not raise objections
to the actions later determined to be insider trading.
Yang also claims that the existence of a trading error
doesn't qualify as inside information, and that subsequent
trades designed to unwind them were in line with the unit's
normal hedging strategy, not an exceptional response to the
($1 = 6.0764 Chinese yuan)
(Reporting by Lu Jianxin and Gabriel Wildau; Editing by Kenneth