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Case of "Investor Protection, Clear Rules and Risk Recognition": Respect for Teachers and Respect for Ways and Means to Don't Report Teachers'Benefits with "Insiders"

2019-07-24 17:08
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Case of "Investor Protection, Clear Rules and Risk Recognition": Respect for Teachers and Respect for Ways and Means to Don't Report Teachers'Benefits with "Insiders"
Major investment actions and major property disposal decisions of listed companies, such as asset restructuring, asset injection and asset acquisition, are often interpreted as good news by the capital market. Many investors like to inquire about this kind of news and think that they can get huge profits by using these so-called "insider information" to speculate in stocks. But in fact, insider trading is not only not necessarily profitable, insider trading itself is prohibited by law.
Professor Song Mou of a university paid a huge price in an insider trading. He bought stocks according to his former student Chen Mou's insider information. Instead of making money, he lost more than 410,000 yuan and was eventually severely punished by the SFC.
Chen Mou acted as an intermediary for the M&A and reorganization project of G Company. After Song Mou contacted Chen Mou by telephone, he bought 931,000 shares of G Company before the company's stock was suspended, with a value of about 7163,000 yuan. Although Song Mou preempted "latent" entry before G Company's stock suspension, it was unexpected that the two sides of the transaction decided to terminate the reorganization because they failed to reach an agreement on important matters. As the major restructuring events expected by the market failed, after the reorganization, the stock price suffered setbacks, and Song Mou sold it and lost more than 410,000 yuan.
There are ways to respect teachers and respect them. Don't report teachers'kindness by insider. Teacher's kindness was not repaid, but the teacher lost money. Not only that, Song Mou's behavior also violated the provisions of the Securities Law on prohibiting insider trading, and it is difficult to escape the sanctions of the law. According to the provisions of Articles 73 and 76 of the Securities Law, the insider and the person who illegally acquires the insider information shall not buy or sell the company's securities until the insider information is made public. Article 2 of the Interpretation of the Supreme People's Court and the Supreme People's Procuratorate on Several Questions Concerning the Specific Application of Law in Criminal Cases of Handling Insider Trading and Leaking Insider Information also stipulates that during the sensitive period of Insider Information, they shall liaise with and contact people who know the Insider Information, engage in securities trading related to the Insider Information, and make relevant submissions. Insider trading is a kind of insider trading in which the easy behavior is obviously abnormal and there is no justified reason or proper information source. According to Article 202 of the Securities Law, Song Mou was fined 600,000 yuan and prohibited from entering the securities market for 10 years.
This story tells investors not to easily believe the so-called "insider information" of the relevant personnel, let alone take the initiative to ask the relevant personnel for such information. The risk of long suspension and failure of asset restructuring is also involved in the rush to buy such stocks. What is more serious is that such "insider information" which has a significant impact on the company's stock price can not be leaked in advance. It is illegal to inquire about such information from insider and use it to buy and sell stocks. Whether it is profitable or not, it will be punished by law. Therefore, investors should pay special attention to the investment risks and legal risks contained in "insider information". They should not simply "listen to news" and "listen to stories" to buy stocks of so-called asset restructuring, let alone make every effort to inquire about "insider information" for insider trading. They should still insist on value investment and establish correct investment. Idea: Real good stocks are not so-called "news stocks" or "concept stocks", but stocks of companies that have the ability to create good performance and can bring sustained returns to investors.