SFC Penalty [2006] No. 10
The party: Tiantong Securities Limited Liability Company (hereinafter referred to as Tiantong Securities), domiciled at No. 180, Quancheng Road, Jinan City, Shandong Province, the legal representative of the Duan Hu.
Tian Tong Securities misappropriation of customer trading settlement funds case, I will now investigate the end, and in accordance with the law to the parties to fulfill the administrative penalty prior notification procedures.
It was found that on October 9, 2004, Tiantong Securities transferred 500 million yuan of funds from the special deposit account for customer trading and settlement funds opened in the Jinan City Branch of China Construction Bank and the special deposit account for customer trading and settlement funds opened in the Lixia Sub-branch of Industrial and Commercial Bank of China, to the special deposit account for customer trading and settlement funds opened in the business department of the Jining Branch of China Construction Bank in the Guhuai Road Securities Business Department in Jining City, a branch of Jining. On October 10, the funds were transferred to the account (407500430708096001) opened by Lianda Industrial Co. in Bank of China Zoucheng Sub-branch. On November 1, 2004, Tiantong Securities transferred 500 million yuan of funds from the account opened by Tiantong Securities in the Business Department of Bank of China Jinan Sub-branch to the account of Jining Guhuilu Road Securities Business Department of Jining Guhuilu Road Securities Business Department of its branch in Bank of China Jining Branch. On November 1, 2004, Tiantong Securities transferred RMB880 million from its special deposit account for customer trading and settlement funds opened in the Business Department of Jinan Branch to the account (407500430708096001) opened by Lianda Industrial Company Limited in Zoucheng Sub-branch of Bank of China. Tiantong Securities misappropriated customer transaction settlement funds for financing in a large amount.
The above facts are confirmed by evidence in the case, such as the relevant agreement of Tiantong Securities, financial information, bank vouchers, interrogation transcripts of the relevant personnel and information notes, and the evidence is true and sufficient to be recognized.
Tian Tong Securities above behavior is a serious violation of the former "Chinese People's *** and the State Securities Law" (hereinafter referred to as the former "Securities Law"), Article 73 "in securities transactions, prohibit securities companies and their practitioners from engaging in the following fraudulent acts detrimental to the interests of the customer," item (3) " Misappropriation of securities entrusted by clients for trading or funds in clients' accounts" and Article 132(2) "Misappropriation of clients' trading and settlement funds is strictly prohibited", which constitutes the act of "misappropriation of funds in clients' accounts" referred to in Article 193 of the former Securities Law.
In view of the fact that Tiantong Securities misappropriated a relatively large amount of clients' trading and settlement funds, it no longer possesses the conditions for continued operation, and in accordance with the provisions of Article 201 of the former Securities Law, "If a securities company commits serious violations of the law in securities trading and is no longer qualified for operation, the securities regulatory authority shall cancel its license for securities business and order its closure", I will decide to close down the company. "I will decide to cancel the securities business license of Tiantong Securities and order its closure. The persons responsible for the above violations of Tiantong Securities will be dealt with separately.
If the party concerned is not satisfied with this penalty decision, he/she may file an administrative reconsideration with the China Securities Regulatory Commission within 60 days from the date of receipt of this penalty decision; he/she may also file a lawsuit directly with the people's court with jurisdiction within 3 months from the date of receipt of this penalty decision. During the period of reconsideration and litigation, the enforcement of the above decision shall not be suspended.
Chinese Securities Regulatory Commission
March 17, 2006