BEIJING (AP) — One of China’s biggest securities firms was fined 523 million yuan ($85 million) today and its former CEO was banned from the industry after computerized trading mistakes caused wild swings in Chinese stock prices.
The penalty for Everbright Securities was the most severe punishment imposed to date on a Chinese securities firm, the government’s Xinhua News Agency said.
Everbright was blamed for wild price swings on China’s stock market on Aug. 16. Regulators said a design flaw caused its computerized trading system to submit a multibillion dollar avalanche of mistaken orders. That caused stock prices of some of China’s biggest companies to surge by the maximum 10 percent daily limit before dropping back.
A spokesman for the China Securities Regulatory Commission said investors will be allowed to sue Everbright over losses blamed on the price swings, according to reports by state television, the China Securities Journal and other state media. There has been no word on the size of potential losses.
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