Everbright trade errors lead to multi million dollar losses

Everbright Securities has posted an unconsolidated net loss of $85m last month after $3.8bn in erroneous trading orders that roiled China’s equity market and drew a record regulatory penalty.

Bloomberg News reports that the country’s seventh-largest brokerage by market value incurred the unconsolidated loss, which doesn’t include contributions from its subsidiaries, after disposing of assets following the Aug. 16 error, Everbright said in a statement to the Shanghai Stock Exchange yesterday.

The figure is based on preliminary data and hasn’t been audited, the company said.

The loss adds to woes at state-controlled Everbright, which has been ordered by the China Securities Regulatory Commission to pay a record $85m for insider trading in the aftermath of the errors.

The regulator, which is cracking down on misconduct, barred the company from most proprietary trading and banned four of its executives from the market for life.

The CSRC stopped accepting applications from Bosera Funds for new products and businesses for six months after it found that a fund manager was buying securities in advance of client orders, the People’s Daily online reported yesterday, citing the regulator.

The company will take measures in response to the CSRC penalty, it said in an e-mailed statement.

Hit the link below to access the complete Bloomberg article:

Everbright Errant China Trades Lead to $85 Million Monthly Loss

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image: © Justin Marty

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