Looking back at history, there are many things worth learning from foreign capital market supervision. So, how are foreign stock market manipulations punished?

In early July, China began to strictly investigate malicious short selling and stock market manipulation. Law enforcement officers from the China Securities Regulatory Commission and the Ministry of Public Security entered the scene to conduct verification and evidence collection on more than a dozen institutions and individuals suspected of malicious short selling of blue chips.

Coincidentally, in early August, a former UBS Citigroup trader was sentenced to 14 years in prison for the famous Libor manipulation case. Looking back at history, there are many things worth learning from foreign capital market supervision. So, how are foreign stock market manipulations punished?

■Typical cases of those who were sentenced for market manipulation

UK: Trader sentenced to 14 years in prison for manipulating Libor, former employer may be fined US$1.5 billion

August On the 3rd, a jury in a London court unanimously found former UBS and Citigroup trader Tom Hayes guilty on all eight counts of manipulating the London Interbank Offered Rate (Libor). He was sentenced to 14 years in prison. Year. Tom Hayes thus became the first individual in the world to be criminally punished for manipulating Libor.

The Libor manipulation case refers to the falsification of Libor, the most important key interest rate for the world during the financial crisis by many large multinational banks. The case started with Barclays Bank and swept most multinational banks. banks and several national regulators. In the summer of 2012, the Libor manipulation scandal was exposed in the United Kingdom, and regulatory authorities in the United States and Europe began investigating related international banks. The investigation revealed that from December 2007 to January 2013, traders at Citigroup, JPMorgan Chase, Barclays and Royal Bank of Scotland used exclusive chat groups and code words to manipulate benchmark exchange rates to increase their own profits.

Hayes was detained in December 2012 and investigated by the UK's Serious Fraud Office (SFO). He is accused of manipulating Libor while working at UBS and Citigroup from 2006 to 2010. It is reported that his transactions earned UBS approximately 150 million pounds over a three-year period. His former employer Citibank received a $1.3 billion fine for the Libor case, and UBS was fined $203 million.

United States: The "devil trader" who caused the 2010 U.S. stock flash crash faces up to 380 years in prison

On April 21, commodities trader Navinder Singh Sarao was charged with suspicion of involvement in the 2010 shock He was arrested at his home in London, England in connection with the "Flash Crash" of global markets.

On May 6, 2010, U.S. stocks mysteriously plummeted 9%, and the Dow Jones Industrial Average fell nearly 1,000 points in a matter of minutes. This trading day also set the largest single-day intraday drop in the history of the U.S. stock market, and it was called the most volatile 20 minutes in the history of Wall Street. The U.S. Securities and Exchange Commission (SEC) later issued a report on the matter, but no one was blamed. The SEC said this may have been caused by a single trader manipulating the S&P futures contract. It was not until April this year that the suspect was arrested.

On the day of the flash crash of the US stock market, Sarao obtained nearly US$900,000 worth of trading futures on the S&P 500 index. On that day, nearly US$1 trillion in investor value disappeared from the US stock market in a matter of minutes. And fly. Sarao, 36, is a resident of West London, England, but his transactions occurred on an exchange operated by CME Group Inc. in the United States.

The U.S. Department of Justice estimates that between 2010 and 2014, Sarao made a total of $40 million in profits from trading S&P 500 futures contracts. Sarao now faces one count of wire fraud, 10 counts of commodity fraud, 10 counts of commodity market manipulation and one count of deception filed by the U.S. Justice Department. If convicted, the charges could bring him a maximum of 380 years in prison.

The protagonist of the largest insider trading case in Wall Street history was sentenced to 11 years in prison

Raj Rajaratnam, founder of the hedge fund company Galleon Group, was charged with murder on October 16, 2011 Insider trading caught. Preet Bharara, the U.S. Attorney for the District of Manhattan, said: "This is the largest criminal case of hedge fund insider trading." Raj Rajaratnam was sentenced to 11 years in prison. Returned US$53.8 million in illegal gains and paid a US$10 million fine. The verdict caps off one of the largest insider trading cases in decades.

In May 2011, billionaire Rajaratnam was charged with 14 counts of securities fraud and insider trading. The Rajaratnam case is the most high-profile case in the U.S. government's crackdown on insider trading. It is reported that the persons involved in this case, known as the largest hedge fund insider trading case in the history of Wall Street, include 21 defendants including Raj Rajaratnam, the founder of the Sailing Group, and the amount involved in the case exceeds 30 million US dollars.

At the same time, former Goldman Sachs director Rajat Gupta was sentenced to two years in prison and fined $5 million for providing inside information to Rajaratnam. Among the insider information was news that Warren Buffett invested $5 billion in Goldman Sachs during the 2008 financial crisis.

South Korea: Three men were arrested for spreading rumors about a North Korean nuclear explosion to manipulate the stock market

In February 2012, South Korean police arrested several people who intended to manipulate the stock market by spreading rumors about a North Korean nuclear reactor explosion. suspect. In June 2012, a South Korean court ruled that three men had manipulated the stock market to make profits and sentenced them to different terms of imprisonment. The mastermind of the case, Wu, is now 28 years old and was sentenced to two years in prison.

The two murder conspirators were sentenced to one and a half years and one year in prison respectively, with three years of probation.

It is reported that on January 6, 2012, a rumor about the explosion of North Korea's Yongbyon light water reactor quickly spread through the Internet chat tool in the South Korean securities industry. The content of the rumors is very specific. On the 6th, the South Korean won's exchange rate against the U.S. dollar fell by up to 0.9 percentage points, reaching its lowest value since December 20 last year. South Korea's benchmark stock index, the Kospi index, also fell by 2.1% at one time and closed down by 1.11%. . Three men took advantage of the fluctuations in stock prices to trade stocks and made a profit of 29 million won.

Deutsche Bank was banned from trading in the Korean stock market for half a year for allegedly manipulating the stock market.

South Korea has also been settling accounts after the stock market crash on November 11, 2010. The South Korean government issued the largest fine in history on February 26, 2012. Deutsche Bank's Korean brokerage subsidiary faces a penalty of 1 billion won. At the same time, the Korea Securities and Futures Commission also announced a ban on Deutsche Bank’s Seoul Branch from engaging in certain proprietary securities and over-the-counter derivatives trading businesses for six months.

It is reported that the South Korean Composite Stock Index fell 48 points in the last ten minutes before the close on November 11, 2010. In just ten minutes, overseas investors issued sell orders of up to 2.4 trillion won. , with most of the orders coming from Deutsche Bank's Korean operations. The Korea Composite Stock Index closed down 53.12 points that day, closing at 1914.73 points.

South Korean regulatory authorities suspected that there was arbitrage trading between the spot market and the futures market at that time. Since then, South Korea's financial regulatory authorities began to investigate this incident and Deutsche Bank's role in this incident, pointing out that Deutsche Bank executed a put option after selling approximately 2.4 trillion won of stocks on November 11, 2010, thereby arbitraging approximately 2.4 trillion won of stock. 45 billion won.