Everbright Securities Co. incurred risks for facing possible fines and restrictions. This was after the brokerage's unprecedented stock trading error which threatened the confidence of investors in China.
The shares of the brokerage fell by 10% daily limit to CNY10.91 at the trading close today. Its trading volumes were around 68% low than the average for this month.
Everbright Securities Co. is a state-backed company. The former had been suspended after making erroneous buy orders last August 16. The erroneous buy orders were valued CNY23.4 billion which compromised investor confidence on the Shanghai Stock Market. The incident was described to be the first of its kind as stated by China Securities Regulatory Commission (CSRC). Yesterday, Everbright mispriced the government bonds for CNY10 million.
Everbright was restricted to join property trading in the next three months as part of its penalty. The move was to lure investors back to the second-worst performing stock market in the world in the last four years.
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