Shanghai police arrest 3 in futures stock price fixing case
Print Edition
SHANGHAI police have arrested 3 suspects as they cracked a case of stock futures price manipulation involving over 11.3 billion yuan (US$1.8 billion), police said yesterday in a statement.
Yishidun, a commercial company registered in Jiangsu Province’s Zhangjiagang City in 2012, was found to use an illegal stock futures trading software to destabilize the market and profit from volatility.
The software uses complex algorithms to analyze the markets and are able to spot emerging trends in a fraction of a second. By essentially anticipating and beating the trends to the market place, institutions that implement high frequency trading can gain favorable returns on trades they make by essence of their bid-ask spread, resulting in significant profits.
The firm made 8,110 deals with 11.3 billion yuan in turnover, and made a total profit of 2 billion yuan since 2012. It made a profit of 500 million yuan from the Chinese stock market rout in June and July.
Georgy Zarya and Anton Murashov, who founded the firm, had urged general manager Gao Yan to borrow 31 individual and corporate accounts to trade stock futures with nearly 7 million yuan capital.
As instructed by Zarya, Gao also sent over 1 million yuan to Jin Wenxian, a technical supervisor with a futures company who helped Yishidun cover up the transactions while using the software undetected by authorities and transferring funds, the statement said. While Gao, Jin and Liang Ze, another senior executive of Yishidun, have been arrested, the case is still under investigation.
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