Trial opens for trader against securities watchdog

The civil trial of China's securities watchdog which is being sued by a former executive of Chinese brokerage firm Everbright Securities opened on Thursday.

Yang Jianbo, former head of the strategic transaction department of Everbright Securities, is suing the China Securities Regulatory Commission (CSRC) after it fined and banned him for life from the securities and futures markets for insider trading last year.

At Beijing No.1 Intermediate People's Court on Thursday, Yang said the commission had violated the law and infringed his legal rights when handing down the punishment.

He asked the court to rule that the commission revoke the punishment.

An abnormal trading on Aug. 16, caused a 5.96-percent gain in the benchmark Shanghai Composite Index in about three minutes with a large number of purchase orders sent from Everbright Securities' own account.

At 11:05 a.m. on Aug. 16, due to a computer program error, Everbright Securities mistakenly placed 23.4 billion yuan (3.84 billion U.S. dollars) worth of purchase orders for 180 ETF (exchange-traded funds), of which 7.27 billion yuan were concluded, according to Yang's indictment paper.

Yang reported to the CSRC Shanghai branch and the Shanghai Stock Exchange after the incident and later asked traders to sell short index futures and ETF to hedge risks according to instructions from Everbright Securities, the indictment paper said.

The commission later that month slapped the company with record penalties totaling 523 million yuan for legal and regulatory violations.

Yang, together with three other colleagues, were each given an official warning and fined 600,000 yuan and banned from the securities and futures markets for life, according to a CSRC statement on Aug. 30.

The trial was adjourned to a later date.