In China, a man has been manipulating 67 accounts for 5 years, trading stocks of a listed company, raking in over 500 million yuan. After the case was exposed, his profits were confiscated and he was fined. Additionally, he was banned from the securities market and prohibited from trading for 3 years.
According to the administrative penalty decision issued by the China Securities Regulatory Commission on its official website, during the manipulation period from June 25, 2019, to August 16, 2024, Yu Han controlled and used 67 accounts to trade stocks of “Dr. Glasses”. Using various tactics such as concentrating funds, holding a dominant share, and conducting continuous transactions between his controlled accounts, Yu Han manipulated the stock price and trading volume of “Dr. Glasses”. It was calculated that Yu Han’s illegal gains from manipulating “Dr. Glasses” amounted to 510,892,270.94 yuan.
Despite Yu Han’s claims that he lacked the subjective intent to manipulate the market and did not engage in market manipulation behaviors objectively, and that the number of controlled accounts was incorrectly identified, the Securities Regulatory Commission rejected his statements and defense arguments.
According to a report by “Qichacha Finance” under the China Enterprise Credit Information Search Platform and Qichacha Technology Co., Ltd. on February 9, Yu Han primarily manipulated the stock price and trading volume of “Dr. Glasses” through two core methods.
On one hand, by concentrating funds and dominant shareholdings to conduct consecutive buying and selling, using money and share quantities to control the price, Yu Han had a substantial amount of funds and stocks, frequently trading within 837 trading days. The penalty data showed that on 181 trading days, the buying volume of his account group accounted for more than 10% of the market trading volume, with some days exceeding this percentage. This “high-price maneuvering” operation to a certain extent pushed up the stock price, creating a false impression of the stock being popular.
On the other hand, he engaged in securities trading between his controlled accounts, commonly known as contra trading. In simple terms, it involves selling with one hand and buying with the other, using his A account to sell stocks to his B account, making it seem like there were large transactions while the stocks remained in his possession. This could mislead other investors into thinking there was significant capital inflow, prompting them to buy, allowing Yu Han to profit by selling at high prices.
The administrative penalty decision by the China Securities Regulatory Commission states that Yu Han’s illegal gains of 510,892,270.94 yuan were confiscated, and he was fined the same amount. Additionally, Yu Han was subject to a 3-year ban in the securities market, during which he is prohibited from engaging in securities business, securities service business, or holding positions such as director, supervisor, or senior management in the original institution or any other institution.
“Qichacha Finance” alerts retail investors to be cautious when encountering stocks with sudden significant price increases and abnormal trading activities, advising against blindly following the trend. Stocks like the one in question, which deviate from the overall market trends and exhibit fluctuations in trading volume, likely conceal manipulation risks.
Public records show that Dr. Glasses Chain Co., Ltd. was established in 1993, headquartered in Shenzhen, and primarily operates in the retail eyewear industry. The company was listed on the Shenzhen Stock Exchange’s Growth Enterprise Market in 2017.
As of the closing of the A-share market on February 9th, Dr. Glasses’ stock price was reported at 30.72 yuan per share, up by 2.20%, with a total market value reaching 7 billion yuan.