Three People Fined Over 18.3 Million for Insider Trading Combined

Source: Taiwan Strait Network

Taiwan Strait Network, March 23 — Targeting insider trading, the Xiamen regulatory authorities have taken strong action again! On March 20, the Xiamen Securities Regulatory Bureau officially released two administrative penalty decisions, punishing two violations related to insider trading. A total of three individuals were involved, with combined fines and confiscations reaching 18.3037 million yuan. Among them, Wang Sheng’s case alone involved fines and confiscations exceeding 13.98 million yuan, setting a recent record for insider trading penalties in Xiamen’s capital market.

Confiscated profit of 3.4957 million yuan

Fined 10.4872 million yuan

The penalty decisions show that both cases revolve around the same listed company’s controlling shareholder and actual controller change, which is considered insider information. According to the decisions, this insider information qualifies as a major event under the Securities Law of the People’s Republic of China. It was considered insider information before being publicly disclosed, with formation no later than May 28, 2024, and it was only officially disclosed on November 4, 2024, resulting in an insider information sensitive period of over five months.

In Penalty Decision No. [2026]4, Wang Sheng was heavily fined for executing insider trading alone. Investigations revealed that Wang Sheng knew the relevant insider information and had contact with the insider during the sensitive period. Between August 12 and October 10, 2024, Wang Sheng bought a total of 1.5436 million shares of the related listed company, with a purchase amount of 2.5152 million yuan, ultimately earning a profit of 3.4957 million yuan from the trades.

The Xiamen Securities Regulatory Bureau pointed out that Wang Sheng’s trading behavior showed obvious anomalies — the timing of his initial purchase and fund transfers closely coincided with contact with the insider, the trading was highly sensitive, and he showed strong buying intent. Moreover, shortly after the insider information was disclosed, he quickly sold all his holdings without legitimate reasons or legal information sources. Although Wang Sheng and his agent argued that they were unaware of the insider information and that their trades were normal, the bureau’s review found these defenses unsubstantiated. Based on relevant provisions of the Securities Law, the bureau decided to confiscate Wang Sheng’s illegal gains of 3.4957 million yuan and impose a fine of 10.4872 million yuan, totaling 13.9829 million yuan in penalties and confiscations.

He leaked insider information

Fined 1.35 million yuan

The other Penalty Decision No. [2026]3 involves related illegal activities of leaking insider information and insider trading, with individuals Sun Mingfei and Li Nailing held responsible.

Investigations showed that Sun Mingfei, as an insider information holder, leaked the relevant insider information to Li Nailing. After learning of the information before August 22, 2024, Li Nailing immediately began trading. Between September 12 and November 1, 2024, Li Nailing bought a total of 675,000 shares of the related listed company, with a purchase amount of 1.5851 million yuan, earning a profit of 800,200 yuan. His trading also exhibited abnormal timing, strong buying intent, and quick liquidation after the information was disclosed, with no legitimate reasons or legal information sources.

Regarding their illegal activities, the Xiamen Securities Regulatory Bureau determined that Sun Mingfei violated relevant provisions of the Securities Law by leaking insider information, constituting insider trading. Li Nailing was found to have illegally obtained and traded insider information, constituting illegal insider trading. Ultimately, the bureau decided to fine Sun Mingfei 1.35 million yuan, confiscate Li Nailing’s illegal gains of 800,200 yuan, and impose a fine of 2.1606 million yuan on him. In total, Li Nailing faced penalties and confiscations totaling 2.9608 million yuan.

The Xiamen Securities Regulatory Bureau stated that the facts of both cases are fully supported by sufficient evidence, including explanations from the involved listed companies, announcements, securities and bank transaction records, interrogation transcripts, and other materials, forming a complete chain of evidence. The bureau clarified in the penalty decisions that the involved parties must pay the fines and confiscations to the national treasury within 15 days of receiving the decisions and file the payment records; if they object to the penalties, they can apply for administrative reconsideration or file administrative lawsuits within the legal timeframe. During the reconsideration or litigation process, the penalties will not be suspended.

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【Source: Taiwan Strait Network】