Securities regulator points finger at unconventional investing strategies
Illegal operation on the domestic markets showed new trends in 2015, such as opening stock accounts in remote areas to evade official investigations and combing traditional methods with new business, the China Securities Regulatory Commission (CSRC), China's watchdog for securities, said in an interview with the Beijing-based Legal Daily on Tuesday.
The other two trends are engaging in over-the-counter stock trading and "ferocious" stock manipulation by individual traders to maximize profits, according to the CSRC.
According to the report, in the past year stock speculators tended to combine one or several types of traditional stock operating methods with new products (like stock index futures), new businesses (such as securities loans) and new technologies. They also started to engage in cross-border stock operation.
Those new forms of operation not only did a lot of damage to the markets, but also posed unprecedented challenges to investigators.
Also, many individuals participated in manipulating the stock markets in the past year with "ferocious" trading measures. Many of them had intensified market fluctuations at "sensitive" points. According to the Legal Daily report, some of those individual stock traders had engaged in stock trading for a long time, were very rich and had a lot of experience investing in stocks.
Another trend in domestic stock trading activities in 2015 was using leverage with methods such as over-the-counter stock trading to maximize profits. One such measure is what is called an "umbrella trust," a trust plan designed to provide high leverage for bold investors. For example, "umbrella trust" was used by investors who were accused of manipulating the stock of Shenzhen Tellus Holding Co, for example, to accumulate massive funds.
The Legal Daily also reported that in 2015, many illegal stock traders took a lot of measures to evade investigation. Some of them even deliberately opened accounts in remote areas such as the Tibet Autonomous Region and the Xinjiang Uyghur Autonomous Region. This has caused a lot of trouble for investigators.
According to the report, the CSRC had investigated into 71 market manipulation cases in 2015, up 473 percent compared with 2014.
