Between June and July of this year, my country's securities and futures markets experienced unusually huge fluctuations, and investors suffered huge losses. On July 10, Meng Qingfeng, Vice Minister of the Ministry of Public Security, led a multi-departmental joint working group to Shanghai to investigate clues of illegal crimes involving securities and futures. After careful investigation, the working group has obtained clues about the suspected manipulation of the futures market and other crimes by the foreign-invested Ishton Company.

 

　　 After more than three months of careful investigation, the police successfully detected this suspected case of manipulating the futures market, which used trading companies as a cover, remotely commanded overseas, conducted transactions within the country, concealed means of committing crimes, and made huge illegal profits. The suspects such as Gao Yan, general manager of Easton International Trade Co., Ltd., Liang Zezhong, business development manager, and Jin Wenwen, technical director of Huaxin Futures, have been arrested in accordance with the law, and the funds involved in the case have been frozen by the public security organs. Currently, the case is under further investigation. The public security organs will further strengthen international cooperation and try their best to arrest criminal suspects who are still abroad.

 

　　Case details

 

　　The speed of placing an order is 0.03 seconds, and the net profit is more than 500 million yuan a month

 

According to the police handling the case, from early June to early July this year, the securities and futures market fluctuated sharply. During the trading of CSI 300, CSI 500, SSE 50 and other stock index futures contracts, the amount of open positions for selling and opening for buying Ranked in the forefront of the entire market, the company’s account group averaged one order per 0.03 seconds, with a maximum of 31 orders within one second, and the deviation between transaction prices and market conditions was significantly higher than other programmatic traders.

 

Taking the CSI 500 main contract on June 26 as an example, the number of times the company’s account group sales accounted for more than 30% of the total market sales volume reached more than 400 times; calculated in seconds, the sales volume of the Easton account group The number of opening transactions ranked first in the entire market is more than 1,200; the deviation between the selling and opening transaction prices and market conditions is more than twice the average of the top 5 programmatic traders on the day. According to statistics, from early June to early July alone, the company's account group net profit reached more than 500 million yuan.

 

　　One of the criminal tricks

 

　　 Borrow 31 personal or legal person accounts

 

The task force found that Ishton was a foreign staff member Georgy Zarya (transliteration Zaya) and Anton Murashov (transliteration Anton) registered and established a company in Hong Kong. In September 2012, they used the names of two Hong Kong companies in Zhangjiagang Free Trade Zone, Jiangsu Province. U.S. dollar investment and registered trading company. Zaya is the legal representative of Ishton, and Anton is responsible for technical management. Before the establishment of the company, the two worked in investment banks and futures companies in Europe, respectively, engaged in securities and futures trading.

 

According to the suspect Gao Yan (female, 34 years old, from Nantong, Jiangsu) and others: at the instigation of Zaya and Anton, in order to circumvent the restrictions of the China Financial Futures Exchange, she borrowed personal or special legal persons from relatives and friends. There are 31 futures accounts for Ishton to form an account group for trading. In the name of a trading company, Ishdun concealed the actual number of futures accounts under its control, and participated in stock index futures trading in China with registered capital of 500,000 US dollars and 3.6 million yuan lent by others as initial funds.

 

　　 Criminal Method 2

 

　　The server is implanted with high-frequency trading software

 

Gao Yan and others also explained that Anton and its overseas technical team designed and developed a set of high-frequency programmatic trading software, which was remotely implanted into the server hosted by the China Financial Futures Exchange by Ishton to control and manage the Ishton account. Group’s trading behavior. The Ishton account group automatically placed orders in batches and quickly placed orders through high-frequency programmatic trading software. The declared price deviated significantly from the latest market price, realizing a large number of self-buying and self-selling (volume of 8,110 lots, 11.3 billion yuan). Trading, using trading rules such as margin leverage ratio, repeatedly opening and closing positions with relatively small capital investment, so that profits can be rapidly amplified in a short period of time, and illegal profits can reach more than RMB 2 billion.

 

　　The regulatory agency believes that Easton’s futures trading activities have expanded the intraday trading price volatility and are related to market price trends, affecting the current market trading prices and normal trading order. The public security agency believes that the abnormal trading behavior of Easton is in line with the characteristics of manipulating the stock index futures market and is suspected of manipulating the futures market.

 

　　The third method of crime

 

　　Inner ghost protects illegal software to transfer funds

 

　　 The investigation also revealed that Gao Yan transferred nearly 200 million yuan from the huge illegal profits out of the country through an "underground bank" operated by the criminal suspect Qiu (handled separately) and handed it over to Anton and other overseas personnel. In January 2015, Gao Yan was instructed by Zaya to give Jin Wenwen (male, 47 years old, from Yiwu, Zhejiang), the technical director of Huaxin Futures Company, as a benefit fee of more than 1 million yuan.

 

Jin Wenxuan was fully responsible for the docking work between Easton and exchanges and futures dealers, concealing the number of futures accounts actually controlled by Easton, and assisting Easton in disguising high-frequency programmatic trading software technically, and entering the market in violation of regulations transaction. Jin Wenxian also used its bank account to help Easton transfer funds.