Shanghai court to hear lawsuit against Everbright Securities

Source:Xinhua Published: 2013-12-14 10:54:05

A Shanghai court will hear a lawsuit against Everbright Securities after the broker was criticized for insider trading and fined 523 million yuan (84.75 million).

The No.1 People's Intermediate Court in Shanghai said on Friday it has agreed to hear a case against Everbright Securities.

The plaintiff, surnamed Guo, said she was an investor of commodity and stock index futures. Guo told the court she had lost 45,000 yuan after multiple tradings on Aug. 16, the day when Everbright Securities rocked the market.

Guo sued Shanghai Stock Exchange and China Financial Futures Exchange in the same lawsuit, according to the court.

But her claim for the sum of compensation was not disclosed.

On Aug. 16, Shanghai Composite Index suddenly surged six percent in three minutes with financial blue chips soaring about 10 percent. The unusual performance was attributed to money pumped in by Everbright Securities.

The securities firm later said an arbitrage system operated by its proprietary trading team malfunctioned.

However, on Aug. 30, China's securities watchdog identified the operation as insider trading and other violations, slapping the company with record penalties totaling 523 million yuan.

The Supreme People's Court (SPC) in November designated that courts should accept civil compensation cases involving Everbright Securities' erroneous trading in August.

The SPC said in a notice that courts should accept the cases if suitors are based on the administrative penalty decision made by China Securities Regulatory Commission (CSRC) over Everbright Securities.

The suitors should file suits on the excuse that their legal interests were being infringed upon by the illegal activities affirmed in CSRC's decision, said SPC's notice.

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