A MAN was given a fine of more than 21 million yuan (US$3.05 million) for insider trading with his former classmate, who worked at the Shenzhen-based Guosen Securities, the China Securities Regulatory Commission (CSRC) announced recently.

    The man, named Cai Zhemin, and his classmate Wang Fei-ming, a financial adviser working for Guosen Securities, have been close friends for a long time. In 2014, Wang told Cai about an acquisition undertaken by his company.

    The acquisition was initiated by a manager of a company in Shandong Province surnamed Li in March 2014. Li told Yu Shaoming, chairman of the board with Shandong Luqiao Group Co. Ltd. during a casual conversation that a certain advanced materials company had great potential.

    Believing in what Li had told him, Yu, together with Li and some other people, went to visit and inspect the advanced materials company, which was also based in Shandong Province, in August that year. After the visit, Yu decided to purchase the company and later contacted Guosen Securities to help with the acquisition.

    Wang was then dispatched to Shandong for the acquisition as one of the financial advisers. As a close friend, Wang told Cai about the case.

    According to a statement released by the CSRC, Cai was in close contact with Wang during a sensitive period of the acquisition and had purchased a large amount of shares in Shandong Luqiao Group Co. Ltd. through six stock accounts that were opened by himself, his mother, his spouse and others, since he learned about the inside information Sept. 15.

    By April 29, 2015, Cai had bought and sold shares in Luqiao worth nearly 16.68 million yuan through the six accounts, and earned 10.84 million yuan in profits in the deals, the CSRC said.

    The CSRC said Cai had been meeting and talking with Wang frequently during the period when Cai bought and sold Luqiao shares, supporting the accusation that Cai had taken advantage of his relationship with Wang to make insider trading.

    The commission decided to confiscate all of Cai’s illegal earnings and to fine him the same amount, which totaled over 21.68 million yuan.

    (Zhang Qian)