There are also independent directors of listed companies!
Recently, the regulatory authorities released the latest punishment results, and the case of insider trading of independent directors surfaced!
Li, as an independent director of a listed company, embarked on the road of Insider Trading: after talking with the chairman of the board of directors for less than 35 minutes, he raided and bought a large number of shares of the company that used to be an independent director. Instead of making money, he lost 670000 yuan.
In addition, during his tenure as sole director of another listed company, Li also involved a short-term trading violation.
It is worth mentioning that the public information shows that Li is still an accounting professor and doctoral supervisor of a university.
Decision on administrative penalty of Ningbo regulatory bureau of China Securities Regulatory Commission (Li Xinhe) [2020] No.2
Party: Li Xinhe, male, born in November 1963, address: Xuanwu District, Nanjing City, Jiangsu Province.
　　
According to the relevant provisions of the securities law of the people's Republic of China (2014 Amendment) (hereinafter referred to as the Securities Law), our bureau has filed a case, investigated and tried Li Xinhe's violation of securities laws and regulations, and informed the parties of the facts, reasons, basis and rights of administrative punishment according to law. In the receipt of the notice of administrative penalty in advance, the party concerned requests to state and defend, but does not require a hearing. On March 30, 2020, the parties and their entrusted agents reviewed the case evidence materials. On April 8, our bureau received the statement that the parties gave up their statement and defense. The case has now been investigated and concluded.
After investigation, the following illegal facts exist:
1、 Li Xinhe insider trading "Nanjing Xinbai"
（1） The formation and disclosure of inside information
　　
Due to the difficulties in the continuous operation of the department store business of Nanjing Xinjiekou Department Store Co., Ltd. (hereinafter referred to as Nanjing Xinbai (600682)), the controlling shareholder Sanyou Group Co., Ltd. (hereinafter referred to as Sanyou group) considers transforming Nanjing Xinbai into a health industry.
　　
In August 2017, Yi Yulin, vice president of Sanyou group, asked yuan Yufei, chairman of Sanyou group, for instructions to carry out peak project, that is, to start the transfer of the newly acquired dendreon pharmaceuticals LLC (hereinafter referred to as dendreon) of Sanyou group to Nanjing Xinbai. Yuan agreed and arranged for Yimou Lin to take charge of the acquisition.
　　
On August 27, 2017, the wechat group of "peak project intermediary working group" was officially established, and relevant personnel of Sanyu group, Huatai United Securities Co., Ltd. (hereinafter referred to as Huatai United), Guohao law firm (Nanjing) and other intermediaries carried out continuous communication of peak project through the wechat group.
　　
On August 28, 2017, Sanyou group held a conference call with the personnel of various intermediaries to launch peak project. On the same day, Huatai jointly drafted the memo on insider information and the summary of restructuring transaction structure related to peak project, and began to send the address book of peak project team, memo peak project 001 and schematic transaction structure to participants of Sanyo Group and various intermediary institutions by email.
　　
On September 8, 2017, Wang Mou, vice president of investment of Sanyou group, reported to Yang Mou Zhen, chairman of Nanjing new 100, on the transfer of dendreon to Nanjing new Pepsi project, and Yang Mou Zhen agreed.
　　
On September 15, 2017, Nanjing Xinbai issued the notice on suspension of planning major asset restructuring and suspended the trading.
　　
On October 10, 2017, Nanjing Xinbai issued the indicative announcement on signing the acquisition framework agreement, which clearly stated that the suspension of trading was that Sanyou group planned to transfer the wholly-owned dendreon to Nanjing Xinbai, with the estimated price not exceeding 6 billion yuan. The subject matter accounted for 230% of Nanjing Xinbai's net assets of 2.614 billion yuan at the end of 2016.
　　
"The transfer of dendreon held by Sanyou group to Nanjing Xinbai" belongs to the "major event" specified in Article 75, paragraph 2, item 1 and Article 67, paragraph 2, item 2 of the securities law, and belongs to the insider information mentioned in Article 75, paragraph 1 of the securities law before the information is disclosed. The formation time of inside information is no later than August 27, 2017, and the sensitive period of inside information ends on September 15, 2017. Yang, yuan, Yi and Lin are insiders of insider information, of which Yang knows the insider information no later than September 8, 2017.
（2） Li Xinhe contacts insider to trade "Nanjing Xinbai"
1. Li Xinhe and Yang Yuzhen have communication during the sensitive period of inside information
　　
Li Xinhe used to be an independent director of Nanjing Xinbai, and he knew each other with Yang. During the sensitive period of insider information, at 13:17 on September 14, 2017, Li Xinhe had a call with Yang.
　　
2. Li Xinhe borrowed "Yao" securities account and "Wu" securities account to trade "Nanjing Xinbai" in the insider information sensitive period
　　
Wu is the spouse of Li Xinhe. The securities account of Yao is borrowed by Wu from Yao. The account capital comes from Li Xinhe and Wu. During the sensitive period of insider information, "Yao" and "Wu" securities accounts bought 129900 shares of "Nanjing Xinbai" on September 14, 2017, with a transaction amount of 5033587 yuan; after the sensitive period of insider information, all shares were sold, with a transaction amount of 4366709 yuan, with a loss of 672786.77 yuan after deducting transaction taxes. Specifically:
　　
1. "Yao Mou" securities account bought 126300 shares of "Nanjing Xinbai" from 13:35 to 13:51 on September 14, 2017, with a transaction amount of 4894555 yuan; all shares were sold after the end of the insider information sensitive period, with a transaction amount of 4229981 yuan and a loss of 670257.80 yuan after deducting the transaction tax.
　　
2. At 13:27 on September 14, 2017, the securities account of "Wu Xiaoxiao" purchased 3600 shares of "Nanjing Xinbai", with a transaction amount of RMB 139032; all shares were sold after the end of the insider information sensitive period, with a transaction amount of RMB 136728 and a loss of RMB 2528.97 after deducting the transaction tax.
　　
The trading of the above securities accounts of "Yao" and "Wu" is decided by Li Xinhe and then operated by Wu or Li Xinhe himself.
　　
3. The "Nanjing Xinbai" behavior of Li Xinhe trading is obviously abnormal, highly consistent with the insider information, and there is no reasonable reason
　　
Li Xinhe used another securities account to trade "Nanjing Xinbai". In the inquiry record, he admitted that he called Yang to confirm whether Nanjing Xinbai would be reorganized before buying "Nanjing Xinbai" on September 14, 2017, and told Wu that Nanjing Xinbai would stop trading and reorganize to let her buy "Nanjing Xinbai". The time of Li Xinhe's decision to buy "Nanjing Xinbai" coincides with the formation and development of inside information and the contact time of Li Xinhe and Yang. Li Xinhe sold other stocks he had held for a long time at a loss and bought "Nanjing Xinbai" in a large amount, reflecting the abnormity and urgency of buying "Nanjing Xinbai". Although Li Xinhe provided the "situation description" of Tan and Li, Yang's subordinates, that Yang didn't mention the company's insider information and stock related matters during the call, he couldn't explain the abnormality of Li Xinhe's transaction "Nanjing Xinbai", and could not exclude Li Xinhe's use of insider information to trade "Nanjing Xinbai".
2、 Li Xinhe short-term transaction "central market"
（1） Position of Li Xinhe
　　
From April 18, 2014 to April 29, 2019, Li Xinhe served as the independent director of Nanjing central shopping mall (600280) (Group) Co., Ltd.
（2） Li Xinhe borrows "Yao Mou" securities account short-term trading "central market"
　　
"Yao" securities account is borrowed by Wu, the spouse of Li Xinhe, and the account capital comes from Li Xinhe and Wu. During the period from January 15, 2017 to April 29, 2019, Li Xinhe sold or bought the "central shopping mall" held by him through "Yao Mou" securities account within six months after buying or selling. 50000 shares were purchased from August 22 to 23, 2017, with a transaction amount of 398500 yuan; 50000 shares were sold from September 14, 2017, with a transaction amount of 415816.78 yuan; 61700 shares were purchased from December 14 to 22, 2017, with a transaction amount of 566706 yuan; 10000 shares were sold from May 21, 2018, with a transaction amount of 91400 yuan; 50000 shares were purchased from September 10 to 14, 2018, with a transaction amount of 237100 yuan. After Li Xinhe makes the decision, Wu or Li Xinhe will place an order for the above-mentioned securities transaction.
　　
The above-mentioned illegal facts are proved by relevant personnel's inquiry record, communication record, relevant securities account opening information, transaction flow, bank account capital flow and other evidences.
　　
Li Xinhe's act violates the provisions of Article 47, Article 73 and article 76, paragraph 1 of the securities law, and constitutes the illegal act mentioned in articles 195 and 202 of the securities law.
According to the facts, nature, circumstances and social harm degree of the illegal act of the party concerned, our bureau decides:
1、 A fine of 300000 yuan shall be imposed on Li Xinhe for the illegal act of insider trading;
2、 For Li Xinhe's illegal short-term transactions, he will be given a warning and fined 50000 yuan.
　　
The above-mentioned parties shall remit the fine to China Securities Regulatory Commission within 15 days from the date of receiving the punishment decision, with the Bank of deposit: Beijing Branch Business Department of China CITIC Bank, account No.: 7111010189800000162, which shall directly turn it over to the state treasury, and send the copy of payment certificate with the name of the party to the Inspection Bureau of China Securities Regulatory Commission and our bureau for filing. If the party concerned refuses to accept the punishment decision, he may apply for administrative reconsideration to China Securities Regulatory Commission within 60 days from the date of receiving the punishment decision, or directly file an administrative lawsuit to the people's court with jurisdiction within 6 months from the date of receiving the punishment decision. During the period of reconsideration and litigation, the above-mentioned decisions shall not be suspended.