Everbright Securities president booted after fat-finger trades
By Charles Riley @CRrileyCNNAugust 22, 2013: 2:40 AM ET
HONG KONG (CNNMoney)
China Everbright Securities turned out the lights on its president Thursday following a series of embarrassing trading errors that have drawn the interest of regulators.
The company said in a filing with the Shanghai Stock Exchange that its board has accepted the resignation of president Xu Haoming. He will be replaced on an interim basis by Yuan Changqing.
State-backed Everbright also said its shares would be halted for the remainder of the day, but that trading would resume on Friday. Shares were down almost 3% before trading was suspended.
The resignation is the latest consequence of fat-finger trading errors committed by the company on back-to-back days.
Regulators have identified Everbright as the source of last week's sudden 6% spike in the benchmark Shanghai Composite. The jump, which took place over just a few minutes, spooked investors and puzzled analysts.
To bring about the sudden increase, the company's trading system mistakenly placed 23.4 billion yuan of buy orders, 7.27 billion yuan of which were executed.
The firm also sold 1.85 billion yuan in ETFs, and made thousands of futures short sales. The company said that it won't immediately sell off all its accidental purchases.
The China Securities Regulatory Commission is currently investigating the brokerage's operations and has banned Everbright from proprietary trading until Nov. 18. The firm is also prohibited from creating new stock index futures positions.
While in the spotlight, Everbright stumbled again, accidentally selling 10 million yuan in bonds at a steep discount on Monday.
Everbright shares did not trade to start the week, but they tumbled 10% Tuesday as investors punished the company.
Shanghai isn't the only major market to experience a flash move in recent years.
In 2010, the Dow Jones industrial average plunged nearly 1,000 points, briefly erasing $1 trillion in market value. And in April, the Dow quickly plunged 140 points after hackers managed to send an incorrect tweet about an emergency at the White House.