Chapter 8 Chapter 8 "Sneaking in undercover" and fraudulent behavior in the stock market

On the evening of August 10, 1992, Shenzhen City, known as the testing ground for my country's reform and opening up, experienced an unprecedented riot since the establishment of the special zone.From the afternoon of the 10th to the early morning of the next day, tens of thousands of people took to the streets to march without application. There were many onlookers. Even overturned and burned many police cars and civilian cars.After the turmoil subsided, many news organizations at home and abroad made various reports on the incident from different angles.So, what is the truth of the matter?

On August 7, 1992, Shenzhen Branch of the People's Bank of China, Shenzhen Administration for Industry and Commerce, Shenzhen Municipal Public Security Bureau, and Shenzhen Municipal Supervision Bureau jointly issued an announcement stating that the issuance of new shares in Shenzhen in 1992 adopted the form of lottery. In 1992, 500,000,000 domestic public shares were issued, and 5 million new stock subscription lottery forms were issued, and 500,000 effective lottery forms were drawn at one time, and each lottery form could purchase 1,000 shares of the company's stock that was issued this time.The announcement stipulates that people who buy watches must carry a valid resident ID card of the People's Republic of China, and each card is limited to one watch, and each person is limited to 10 pieces at a time, and each watch is charged at 100 yuan.

Although the watch sales time is set from August 9th to 10th, since the evening of August 7th, there have been hundreds of long lines of people in front of banks, securities companies and insurance companies in Shenzhen. dragon. On the 8th, there were three to five thousand people waiting in front of more than 300 meter sales outlets in the city.The sweltering weather, the restless mood, and the chaotic order of crowding, almost all the watch buyers were soaked in sweat many times.Just when people were waiting with all their hard work, they saw extremely infuriating scenes one after another:

On the morning of the 9th, at the meter sales office of CCB on Shennan Middle Road, the bank staff who maintained order blatantly violated the relevant regulations of the relevant departments that "you are not allowed to buy watches in private", and purchased subscription watches from the meter outlet several times. Last morning, at least four or five officers on duty participated in the purchase of watches in violation of the regulations, or asked relatives and friends by name to give priority to buying watches; At the watch sales office of the Shangbu sub-branch of ICBC, some staff members, out of the dishonorable motive of "disturbing the muddy water and easy to catch fish", absurdly openly reversed the serial numbers arranged according to the first-come, first-served basis, and named and purchased watches from the latecomers.During this period, a few people who were familiar with the duty officers were called to buy watches several times, so that many bystanders wrote down the names that appeared frequently;

The director of a branch office of a bank in Shenzhen was recently arrested by the police on suspicion of privately buying thousands of subscription forms and hiring people to sell them at high prices for profit. Now, let's do the math.For every 10 forms sold, 10 ID cards, 10 subscription forms and 1,000 yuan cash must be ordered. In order to avoid mistakes, at least two times must be ordered. Therefore, it takes at least one and a half minutes to sell out one person.However, on August 9th, there were two points that announced the sale of 10,000 watches, and they were sold out within an hour of opening.Shareholders queuing up said: "Even if we open 10 windows, it won't sell so fast!"

A large number of public frauds have already caused a lot of public outrage. On August 10, several news organizations in Shenzhen agreed that "this sale embodies the principles of 'fairness, safety, and high efficiency'", which made the stockholders even more indignant.People can't help but ask: "There is so much fraud, how can it be said to be fair?" On the afternoon of August 10, hundreds of people began to gather in front of the Shenzhen Municipal Government. Some demanded to see the mayor, and held up banners such as "Oppose Corruption, Demand Justice" and marched to petition.The crowd gathered more and more, and finally led to riots.

The restlessness of the stockholders did play a certain role in the riots.But as one shareholder said: "We also know that a parade and petition without application and approval is illegal, but we can't get through the mayor's special line, and the news unit does not tell the truth. Shareholders have nowhere to complain. Is there any good way?" From this point of view, the behavior of stockholders is justifiable.The crux of the problem is: while millions of stockholders in Shenzhen are snapping up subscription forms for new shares almost frantically, some financial and securities practitioners, as well as police, armed police, and security personnel are blinded by their profits and blatantly engage in selfish fraud. This is the most direct cause of the riots .These people, under the banner of "executing official duties", are doing illegal fraud by taking advantage of their official positions.

"Crossing the Chencang secretly" is the second strategy of the second set of enemy tactics in "Thirty-six Strategies": "Show it to move, benefit its tranquility and have the master, benefit its movement and let it stand." It means: deliberately show in combat Some feints attracted the enemy to stick here, and our army took the opportunity to detour to another place for a sneak attack.The creator of this strategy is Han Xin, a famous military strategist in the early Western Han Dynasty. After the fall of the Qin Dynasty, Xiang Yu was the head of all the princes.In order to limit Liu Bang's influence, he named him King of Han, and at the same time divided the Guanzhong area into three counties, named Zhang Han, Sima Xin, and Dong Jian, the surrendered generals of the Qin Dynasty, as kings, and paid attention to monitoring Liu Bang.Liu Bang knew in his heart that he wanted to push himself out of the Central Plains by letting him take up the post in Hanzhong, where the traffic was blocked.But under the pressure of Xiang Yu, he had no choice but to go to Hanzhong first before trying to develop.In order to show that he no longer intends to return to the Central Plains and to dispel Xiang Yu's concerns, Liu Bang followed Qiang Liang's suggestion and burned all the plank roads connecting Guanzhong and Hanzhong after he retreated into Hanzhong.

After Liu Bang arrived in Hanzhong, he worshiped Han Xin as a general, recruited troops, and accumulated strength.After several years of preparation, Liu Bang decided to march eastward and kill the four Central Plains.However, the plank road has been burned, and how to enter the customs has become a big problem.Han Xin suggested to Liu Bang: "There are two ways to enter Guanzhong: the plank road and the old road Chencang. We can enter the Central Plains in this way." Liu Bang was overjoyed, and immediately summoned generals Fan Kui and Zhou Bo, and ordered them to lead 10,000 soldiers. It took three months to repair the plank road.Due to the enormous size of the project, only a few miles were repaired in one month.Liu Bang transferred them back in the name of their incompetence as supervisors.Zhang Han and others heard that Liu Bang was building a plank road, and they were very strong. They thought that Liu Bang was going to return to Jinyuan through the main road, and immediately sent heavy troops to wait at the sentry post, ready to intercept and kill Liu Bang.In fact, they have already been tricked.Seeing that Zhang Han's main force had been attracted to the plank road, Han Xin immediately led Fan Kuai, Zhou Bo and others, led tens of thousands of elite soldiers, and without anyone noticing, passed the old road Chen Cang and entered Guanzhong.From then on began the four-year Chu-Han War.

Han credited "Ming Xiu Plank Road" to distract the enemy's attention, and only then did he succeed in "crossing Chen Cang secretly".This "brightness" and "darkness" reflects the relationship between "strange" and "positive" in the art of war. Only by using deceptive means such as frontal feints and feints to disguise attack routes and breakthrough points, and lure the enemy to use troops according to normal Only by judging our army's action intentions based on principles can we achieve the goal of winning by surprise. "Crossing the Chen Cang secretly" is a military strategy, but I don't know when it has become synonymous with opportunism and malpractice.Indeed, in recent years, there have been too many frauds happening around us, such as fraud in examination rooms, fraud in court, and even the stock market that has just appeared in our country recently, without exception, has been polluted by this unhealthy trend. The stock market riots in Shenzhen Isn't it so thought-provoking?Fraud in the stock market is still a "new thing" in our country. In the West, due to the long history and sufficient development of stock market trading, similar scandals are not uncommon.Among them, the most famous example occurred in the United States from the end of 1963 to March 1964.

At that time, among the "insiders" such as the chairman, directors, engineers, geologists, lawyers, and their relatives and friends of Texas Gulf Sulfur Company, a piece of strictly confidential news spread like wildfire: the company discovered It is a large mineral deposit rich in silver, zinc and silver.Then another news spread among them: the company bought the land around the mining area for the purpose of mining development, and this must be kept strictly confidential! What does this message mean?Anyone with a little financial knowledge will realize that the company's stock price will definitely rise significantly.As a result, these "insiders" and their relatives and friends bought a large number of the company's stocks one after another, and some even made option transactions of the option to buy the option, in order to make huge profits.For a time, rumors spread everywhere.In response to this secret that has been spread in the society, the company actually issued a news to deny it in order to "clarify the facts", which is really trying to cover up. In April 1964, the company had to admit the truth to the press, because the Canadian Ministry of Mines had first published their detection results.This naturally aroused the rapid response of shareholders.On that day, the company's stock price doubled from the original $18 per share. Since then, the stock price has continued to rise. Since 1968, the stock price per share has reached more than 150 yuan. The public has accused the company of disclosing confidentiality as an illegal act.The company's attorney argued that the company has the right to decide its own destiny.Afterwards, after a long period of debate, the courts at all levels finally ruled that the company violated the basic principles of openness and fairness in stock trading, and disclosed confidential information to "insiders" in advance, which is a typical fraud. Fraud in the stock market has greatly damaged the interests of the majority of small and medium investors.Therefore, for a long time, fraud has been the object of stock trading management.Governments of various countries have enacted legislation to prevent this phenomenon from happening. These laws and regulations can indeed have the effect of "a stone from another mountain can be used to attack jade" for the management of my country's stock market. Let's look at the UK first.Among the legislation and regulations on securities trading management in the UK, the most important is the "Financial Industry Act" passed by the Parliament in 1986. According to this law, the Securities Investment Bureau was established. It exercises government functions and is responsible for supervising the securities investment market. The Minister of Trade and Industry reports.Its main responsibility is to protect investors and promote the efficiency of financial markets, to ensure that securities investment companies meet the prescribed "honest, effective and solvency standards."All securities companies must apply to the Bureau for business authorization, and those who are not authorized are not allowed to enter the London market to operate.The Securities Investment Bureau publishes a list of companies authorized by it for public inquiry and verification, so as not to be deceived.For those companies that violate the regulations, the Securities and Investment Bureau will give warnings, intervene and limit the scope of business, suspend authorization or withdraw control.For those counterfeit companies operating illegally, the Securities and Investments Authority will initiate criminal proceedings or issue injunctions through civil courts to prohibit their operations and recover customers' money.The bureau also conducts regular inspections or surprise spot checks on its affiliated companies to find problems and solve them in a timely manner. In order to protect the interests of investors, the Securities and Investment Bureau has established an "Investor Compensation Plan". If a company belonging to the Bureau goes bankrupt, private investor properties can receive up to £80,000 in compensation. Japan also has similar legislation.It prohibits anyone from engaging in fraudulent and improper trading, does not allow market manipulation, must operate stably, and restricts short selling, etc.It also restricts company executives and other insiders from using undisclosed information to engage in business transactions.For violations of the securities trading law, the law has made clear penalties. Compared with Britain and Japan, the Hong Kong stock market seems to pay more attention to credibility.The Hong Kong Securities Act strictly supervises securities companies, practitioners, and brokers not to deceive customers.If you make a profit, you will own it, and if you lose it, you will push it to the client for illegal behavior.High-level personnel must be self-disciplined and cannot use their positions to seek benefits.There are also regulations for listed companies. The director of the company knows the inside information, and he cannot disclose it to others, otherwise it will be illegal.Brokers and listed companies cannot join hands to create a "fake market" and disrupt the market. In recent years, my country's stock market is developing at a very rapid pace.According to a person in charge of the financial management department of the People's Bank of China, in 1992, my country's stock market will realize cross-regional trading of stocks and expand the issuance of internal stocks in a planned way, so as to promote the expansion and development of the stock securities industry.We hope that my country's stock market legislation can quickly catch up with the development speed of the stock market itself, make the stock market increasingly standardized and legalized, and fundamentally eliminate the phenomenon of "undercover".People are calling for stock market legislation!