Stock Manipulators Arrested After USD2.9m in Illegal Profits

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Brian P. Lee

Published at 2018-08-10 06:28

Summary

Chinese authorities caught a gang that manipulated stock pricing through fraudulent orders with use of the Shanghai-Hong Kong Stock Connect, reported Yicai Global on August 9. Of the three suspects Shanghai police arrested, two were charged for stock market manipulation that netted profits of over RMB20m (USD2.9m). Led by a trader referred to as Mr. Tang, the gang selected stocks with a small market cap in order to better exploit share price fluctuations. They then placed fraudulent buy and sell orders to bid up prices, and then canceled the orders afterward to made profits by trading between each other.

Analysis

Fraudulent purchases in low market cap securities to profit through arbitrage is highly illegal. Previously, the China Securities and Regulatory Commission (CSRC) issued fines against the suspects for illegal trading activity. From 2012 through 20

Brian P. Lee
Senior Research Analyst