Text / Sina Finance opinion leader (WeChat public number kopleader) column agency Renmin Chongyang author Liu Ge (Researcher of Chongyang Financial Research Institute of Renmin University of China) Part of the content extracted from the author's new book "Rise in the Crisis" CITIC Publishing House
If the securities market does not have many people jail in violation of the law every year, it will always be a bad casino with scammers, old people and thieves. The Chinese securities market needs police, prosecutors and judges to maintain order and needs a black storm similar to the football world.
China's securities market needs to smash more "thief nests"
In 2015, a raging rain in China's stock market ended in November when Xu Xiang and others were arrested. Xu Xiang is like a doctor's white coat of Armani white tops, which makes him a headline in the financial media and also screens in various fashion media and self media.
From December 5th to December 6th, 2016, Xu Xiang, Wang Wei and Yong Yong manipulated the securities market case in the Qingdao Intermediate People's Court. Xu Xiang pleaded guilty in court.
The Qingdao Municipal Procuratorate alleges that from 2009 to 2015, Xu Xiang established Shanghai Zexi Investment Management Co., Ltd. and other companies to issue trust products and invest in securities. Under the cooperation of his wife, Xu Xiang opened a large number of securities accounts and controlled and used them in the name of relatives and friends, employees of Zexi Company, friends and relatives of employees. Xu Xiang injected the above account with his own funds, and the instructions should be operated by somebody. In addition, Xu Xiang also agreed with the defendant, Yong Yong and others, that the above-mentioned personnel raised funds themselves, opened securities accounts in the name of themselves and their relatives and friends, and bought and sold stocks according to Xu Xiang's instructions. Profits and Xu Xiang were proportionally divided. Through the above methods, Xu Xiang actually controls the securities accounts of nearly 100 people.
From 2010 to 2015, Xu Xiang, Wang Wei and others were suspected of colluding with 13 listed company executives. Xu Xiang and others raised their share prices in the secondary market, helping listed company executives to reduce their holdings in the trading market. Cash or sell at a high level.
When Xu Xiang was 17 years old, he broke into the stock market and started his legendary investment career with his parents' 30,000 yuan. In the first wave of the Chinese stock market from 1992 to 1994, the first barrel of gold was earned. As a well-known private fundraiser in the market, Xu Xiang's story and the Wall Street predators described in the best-selling book "The Thief's Nest" have very similar places - from scratch, black hands and luxury.
The book "The Thief's Nest" by senior journalist and novelist James Stewart completely describes the four "King Kong" on Wall Street - Michael Milken, Ivan Buski, Martin Siegel and Dennis • Levin, how to collude with each other to use insider information to manipulate the stock market, and how the regulators and government law enforcement officers overcome the difficulties, thus making the "four wicked people" legally sanctioned. It is said that after reading this book, readers will have two typical reactions: one is to resolutely give up investing in any stock, cherish life, and stay away from the stock market: while another person chooses to give up the existing profession and do everything possible. Enter Wall Street.
The book reveals such a ukiyo-e: in the streets of Wall Street, banks, investment banks, law firms, and accounting firms who use their own special location to reveal inside information to other friends. In exchange for the reciprocity of other friends and mutual benefit. In the process, the interests of the securities company's customers and ordinary investors were betrayed and not protected.
In such a stock market, the fundamentals of the company become the least important part of the investment, and insider information and man-made manipulation based on insider information are the only way to succeed. Dennis Levine, one of the protagonists in the book, even said that his only means of operation was to "see the Wall Street Journal one day in advance." How can I see the Wall Street Journal one day in advance? That is, before a stock has a major event related to stock price fluctuations, for example, before reorganization and mergers and acquisitions, by knowing inside information in advance, secretly buying the stock of the target company, when the news is actually announced, it is sold to those who only know to chase Ordinary investors who have risen and fallen.
In the current Chinese stock market, there are many people in the industry and the food-rich people from all walks of life who are united around them. It is more than “seeing the Wall Street Journal one day in advanceâ€. If necessary, they can advance one week, one week or even half a year in advance. "See the Wall Street Journal" without worrying about any punishment, let alone jail.
In the carnival of China's 2015 bull market, the contempt for the law reached a horrible level: all kinds of inside information spread without taboos at the dinner table and WeChat; the financial circles did not disclose a few to friends. Insider information can't be lifted; sensitive people who are not allowed to express opinions on the stock market should not be allowed to comment on the stock market; the actual controllers of listed companies use various means to illegally realize the money; the rat warehouse repeatedly manipulates the rise and fall of small-cap stocks to obtain huge profits.
If the securities market does not have many people jail in violation of the law every year, it will always be a bad casino with scammers, old people and thieves. The Chinese securities market needs police, prosecutors and judges to maintain order and needs a black storm similar to the football world.
The continuous improvement of the regulatory laws has allowed those speculators who are taking risks to fall into the French Open. A speculator was arrested shortly before the 1987 stock market crash. In the 1980s, Wall Street agent Bossky made money by risk arbitrage. His operation was to buy a stock of a potential acquired company first. Once the acquisition was completed, he would sell the stock and make a profit. To increase the probability of success, Bosque developed a network of brokers and bankers who provided him with internal information. He used cash-filled boxes to exchange the information he needed. On November 14, 1986, the Securities and Exchange Commission announced that Bosque had admitted that many of his actions violated the securities laws. Finally, Bosque was sentenced to three years in prison. The prototype of the film "Wall Street" starring Douglas is this guy.
The story of the film "Wall Street" took place between 1985 and 1987 - the "reform cattle" era in the United States. In 1980, Reagan took the stage and launched a series of reform measures including reducing income tax and reducing government intervention. The US economy has entered a period of rapid growth since 1982, and Wall Street has also ushered in prosperity. This is a time when heroes are born, and it is also an age of greed. Therefore, it was also called "the decade of greed" in the United States in the 1980s.
The young trader of the securities company, Bard, relies on the telephone yellow pages to do customer telemarketing every day to get customers, but dreams of becoming a stock market like Gordon. Bud, who climbed up with one heart, knows what the big guys want. By providing insider information about his father's inauguration, Bard finally gained the trust of Gordon and became his disciple. Gordon's greed and ruthlessness, as well as unscrupulous behind-the-scenes manipulation and insider trading, made him the most awesome PE in Wall Street. Finally, in the acquisition battle against the airline where Bard’s father was located, the influential Bard and the master turned against each other and finally sent Gordon to prison.
It is said that Gordon Geek's role is a combination of the characteristics of many Wall Street characters at the time. Michael Milken, the father of junk bonds, is one of the most important. Michael Milken was once seen as the flag of the American capital market in the 1980s, and some even compared John Morgan at the end of the 19th century.
“When you ask him about the securities fraud that eventually led Wall Street into a scandal, Mr. Milken talked about Galileo and other dreamers who were eventually proved to be guilty by history; he said that data on charitable donations argued that Americans in the 1980s generally said that they were generous rather than greedy." Milken actually compared his experience with Galileo! Putting together the content of The New York Times and his attitude in court three years ago, you have to admire the combination of their cold and determined values ​​and flexibility and pragmatism.
"Michael Milken yesterday pleaded guilty to six sins of securities fraud and insider trading. The 43-year-old financier agreed to pay a fine of $600 million. Milken had always insisted that he was innocent, but yesterday he was in Manhattan. A crowded court collapsed and burst into tears. He said he hurt the people closest to him. Milken paused a little, because tears began to flow from his eyes, and he put his right index finger. I put it under my nose. I really feel very sorry, he said while weeping." "I violated the laws and rules governing our industry. I did this wrong. I knew that it was wrong. I admit it. He is guilty." The New York Times reported on April 25, 1990 that a "villain" who turned over the hands of the stock market for the rain was described as a prodigal son who pleaded guilty to the law. .
Look, this scene is similar to Xu Xiang’s trial?
Milken’s positive cooperation made only six of the 98 charges he was sued confirmed, and he was sentenced to 10 years in prison.
Although the story is overwhelming, Milken and his contemporaries, who became the richest man because of insider trading and market manipulation, were brought to justice and a milestone on Wall Street that has undergone more than 200 years of development. Prior to this, although various laws and regulations have been introduced to the securities market, it is certainly not the same as the shock of the masses of the industry.
I have repeatedly called on different occasions and articles that the Chinese securities market must have the active participation of the judicial department, otherwise it will not be possible to obtain healthy development, and it will always be an irregular gambling. Every advancement on Wall Street is driven by the rule of law and justice. The power that really regulates the market is not the condemnation and warnings of the supervisory authorities, but the handcuffs and jail.
(The author of this article: Chongyang Financial Research Institute of Renmin University of China (NPC) was established on January 19, 2013. It is the main funded project of Mr. Qi Guogen, the chairman of Shanghai Chongyang Investment Management Co., Ltd., who donated 200 million yuan to his alma mater.)
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