A former executive of Chinese brokerage Everbright Securities is suing the China Securities Regulatory Commission (CSRC), which punished him for insider trading last year.
Beijing No.1 Intermediate People's Court has accepted the lawsuit filed by Yang Jianbo, former head of the strategic transaction department of Everbright Securities, according to the court on Tuesday.
At 11:05 a.m. on Aug. 16, 2013, due to a computer program error, Everbright Securities mistakenly placed 23.4 billion yuan (3.8 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 funds to hedge risks according to the direction from Everbright Securities, the indictment paper said.
Abnormal trading by Everbright Securities on Aug. 16 caused a 5.96-percent gain in the benchmark Shanghai Composite Index in about three minutes. The commission later that month slapped the company with record penalties totaling 523 million yuan for legal and regulatory violations.
Yang Jianbo, together with three other colleagues, were each given an official warning and fined 600,000 yuan and banned from the securities market for life and also banned from the futures market, according to a CSRC statement on Aug. 30.
Yang argues that the CSRC punishment has violated the law and infringed on his legal rights. He has asked the court to revoke the punishment, according to the indictment paper.
The court did not announce when it will open the trial.