There is a huge risk of stock speculation and leverage. Recently, a 69 year old man in Guangzhou has been charged with more than 10 million debts in stock speculation.
The Red Star capital Bureau noted on January 22 that a judgment disclosed by China referee document network recently showed that an elderly man obtained a two financing line of China Securities Co.Ltd(601066) securities of 66 million yuan. However, after falling below the closing line, the old man was unable to recover. After being forced to clear his position, he still faced a debt of more than 10 million yuan. In addition, when facing debt collection after making a loss, the old man was also suspected of transferring his property.
stock speculation: the 69 year old man suffered a huge loss with leverage and owed more than 10 million
Referee document network disclosed that the old man’s name is Su Yufu. He was born in 1953 and is 69 years old this year. On March 22, 2017, the elderly signed the risk disclosure of margin trading and the contract for margin trading with China Securities Co.Ltd(601066) by providing collateral, and China Securities Co.Ltd(601066) provided a total credit line of 66 million yuan.
According to the agreement signed by both parties, when Su Yufu maintains the guarantee proportion below the recovery line (130%) and above the minimum line (110%), his account enters the recovery state and shall add collateral within t + 1 day. Otherwise, China Securities Co.Ltd(601066) has the right to start the compulsory closing procedure on T + 2; If the maintenance guarantee ratio is lower than the minimum line (110%), China Securities Co.Ltd(601066) has the right to immediately start the compulsory liquidation procedure to make its maintenance guarantee ratio reach more than 145%
judgment documents
As of February 1, 2018, Su Yufu had used the financing limit of RMB 33.35 million, but the maintenance guarantee proportion of his account on that day was 128%. Subsequently, China Securities Co.Ltd(601066) notified Su Yufu twice on February 1 and February 2, 2018, respectively, according to the provisions of the agreement, requiring him to maintain the guarantee ratio of more than 145% by transferring collateral or repaying the debt of margin trading.
However, until February 5, 2018, Su Yufu failed to add collateral or repay debts, and the maintenance guarantee proportion of his credit account fell below the minimum line of 110%.
Subsequently, China Securities Co.Ltd(601066) carried out compulsory closing of the shares in Su Yufu’s credit account on February 5, 2018. After the compulsory closing, part of Su Yufu’s debt of margin trading has not been paid off.
At the same time, China Securities Co.Ltd(601066) applied to Beijing Arbitration Commission for arbitration. The ruling showed that Su Yufu had to repay China Securities Co.Ltd(601066) the financing principal of 10.26 million yuan, overdue interest of 340000 yuan, penalty interest and arbitration fee. However, the two sides fell into a tug of war, and the result of the ruling was not fulfilled.
debt repayment: the old man has only a pension and no other property to enforce
On July 31, 2019, China Securities Co.Ltd(601066) applied to Guangzhou intermediate people’s court for enforcement, but the latter found that Su Yufu had no other property available for enforcement except freezing Su Yufu’s relevant bank accounts.
It turned out that Su Yufu could not take care of himself, needed long-term hospitalization and rehabilitation, and had no children. He lived alone all year round. His property under his name was only 10010 yuan per month, and he had been diagnosed with malignant tumor and depended on his pension to maintain his basic life.
However, China Securities Co.Ltd(601066) found that Su Yufu was suspected of transferring property, and his behavior was also revoked by the Guangdong high court.
It is understood that Su Yufu owns a real estate with an area of 55.6 square meters in Yuexiu District, Guangzhou. During the compulsory closing of his account, the property was transferred to his sister Su Yingli at a total price of RMB 1.414 million, with a unit price of RMB 25412.68/m2. The transfer was completed on February 7, 2018. On February 15 of the same year, Su Yingli paid the first house payment of 600000 yuan, and the remaining house payment of 814000 yuan was paid in monthly instalments without interest, with a total of 163 instalments of 5000 yuan each.
China Securities Co.Ltd(601066) believes that the lowest online listing price of the community where his house is located in 2018 is 50000 yuan / m2, which is obviously unreasonable according to law. Su Yingli and Su Yufu are close relatives. She knows Su Yufu’s huge debt to China Securities Co.Ltd(601066) . She knows the purpose and reason of Su Yufu’s transfer of real estate at an obviously unreasonable low price. Su Yingli actually assists Su Yufu in transferring property.
Finally, the court revoked Su Yufu’s act of transferring his real estate to the defendant Su Yingli, and restored the registration of the real estate to Su Yufu’s name.
At present, there is no other property under Su Yufu’s name that can be enforced. If the debts are offset by pensions and real estate, China Securities Co.Ltd(601066) still faces more losses. The case is still under implementation.
is it compliant for the elderly to open a huge amount of financial services?
lawyer: compliance, but remind the credit granting party to objectively evaluate the economic capacity of shareholders
After the hot discussion on the topic of the elderly plus leveraged stock speculation with more than tens of millions of debt recovered, netizens questioned the compliance of securities companies to open huge two financing businesses for the elderly.
According to the interface news report, according to the account manager of a securities firm in Shanghai, Liangrong credit is generally evaluated based on the customer’s risk tolerance and customer assets. If the customer’s stock account assets are sufficient, the credit of more than 60 million is no problem. The proportion of credit is generally 1:1, up to 1:1.2.
The online professional consultant on the official website of China Securities Co.Ltd(601066) securities told the Red Star capital bureau that generally, the margin lending ratio given by China Securities Co.Ltd(601066) securities is 1:1.
For the question of whether the elderly can open the two finance business, the Red Star capital Bureau inquired the official websites of many securities platforms such as Huaxi Securities Co.Ltd(002926) , China Securities Co.Ltd(601066) securities and found that there are special provisions for opening accounts for the elderly aged 70 and over, while there are no special restrictions for the elderly under the age of 70 like Su Yufu.
The official account No. Huaxi Securities Co.Ltd(002926) shows that it does not support the customers over the age of 70 and the institutional customers online. It needs to be handled by the temporary cabinet. The customer service introduction of the brokerage platform says that customers over the age of 70 still need to sign “special crowd risk warnings”.
According to the option of “matching the age and investment variety of investors” in Article 6 of the conditions for opening margin trading accounts shared by online professional consultants on the official website of China Securities Co.Ltd(601066) securities, customers over the age of 70 need to follow the operation guidelines for relevant elderly customers to open two financing accounts, and the investment variety is credit trading. After a detailed inquiry by the Red Star capital Bureau, the professional consultant made it clear that customers over the age of 70 do not support the opening of margin trading
China Securities Co.Ltd(601066) screenshot of online consultation on the official website of securities
Lu Qingqing, a lawyer of Sichuan Renhou law firm, analyzed to Hongxing capital bureau that CITIC construction’s behavior was compliant. “As long as the stock assets of the account are sufficient, the credit ratio is generally 1:1, up to 1:1.2, so there is no problem with credit.
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For the problem that the elderly currently owe more than 10 million but have no enforceable property, Lu Qingqing believes that CITIC construction can take legal measures to bear the insufficient part after auctioning their real estate.
Lu Qingqing reminded through this case that there are risks in the stock market. Especially after adding leverage, the risk is amplified. Once the market is bad, falling is a high probability event. At the same time, for Liangrong company, credit should be strictly controlled, not only by assets and investment experience, but also by their age, physical condition and other fixed assets.
Zhao Liangshan, senior partner of Shaanxi Hengda law firm and well-known public welfare lawyer, told Hongxing capital bureau that both parties signed the risk disclosure of margin trading and the contract for margin trading, and provided a total credit line of 66 million yuan according to the contract China Securities Co.Ltd(601066) . According to Article 153 of the civil code, “a civil legal act that violates the mandatory provisions of laws and administrative regulations is invalid, except that the mandatory provisions do not invalidate the civil legal act. A civil legal act that violates public order and good customs is invalid.”, As long as the contents of the contract signed by both parties do not violate the mandatory provisions of laws and administrative regulations or public order and good customs, and both parties reach it on the basis of voluntariness and true expression of intention, the contract signed by both parties is legal and valid and protected by law. According to the contract between both parties, China Securities Co.Ltd(601066) provides a total credit line of 66 million yuan, which is voluntary, does not violate the mandatory provisions of laws and administrative regulations or public order and good customs, and is legal and effective.
Zhao Liangshan said that if the old man has no property to enforce, China Securities Co.Ltd(601066) can first sue the old man for judgment by the court, and then apply to the court for enforcement with the court judgment. When the old man has no property to enforce, the court can list the old man as a dishonest person (also known as “Lao Lai”) and take enforcement measures such as judicial detention against the old man.
Zhao Liangshan reminded that the risk of stock speculation is immeasurable, and it is very easy to stimulate people’s gambling. As the party granting credit to shareholders, it should not only sign legal and effective contracts with shareholders, but also investigate the economic situation of shareholders and objectively evaluate the economic affordability of shareholders. As a shareholder, don’t take stock speculation as a profession. When speculating in stocks, don’t “close when you see the good”, don’t exceed your own economic affordability, and don’t take chances to speculate in stocks with the help of other economic forces, otherwise the gains will outweigh the losses and heavy losses.
Red Star capital Bureau noted that not long ago China Securities Co.Ltd(601066) securities was ordered to make corrections by the CSRC due to imperfect internal control over margin trading.
In November 2021, the CSRC website announced the regulatory decision taken by Shanghai regulatory bureau on China Securities Co.Ltd(601066) securities No. 1 business department. The business department was ordered to make corrections by the Shanghai regulatory bureau “because of the facilitation of improper trading activities such as customers’ two financing and bid bypassing”.
According to the ticket, China Securities Co.Ltd(601066) securities business department of Taiyuan Road, Xuhui District, Shanghai has the following problems: it fails to perform its duties prudently and fully understand the situation of investors; In the process of carrying out margin trading business, there are situations that provide convenience for customers’ improper trading activities such as two financing and bid bypassing; The business department failed to strictly implement the company’s system, the management of brokers was not in place, the employees engaged in futures intermediary business did not have futures qualification, and the comprehensive management was insufficient, which reflected the imperfect internal control of the business department.
In accordance with relevant regulations, Shanghai regulatory bureau decided to take regulatory measures to order the above-mentioned business departments to make corrections. Meanwhile, the business department shall complete the rectification within three months after receiving the decision and submit a written rectification report to Shanghai regulatory bureau.
