CITIC Securities, the largest brokerage in mainland China, has erroneously boosted the size of its derivatives trading business by 1.06 trillion yuan ($170 bln) in the period between April and September, the Chinese Securities Association said.
No Accusations for Now
The error, according to CITIC, occurred as a result of a systems upgrade that artificially pumped up the volume of its equity swap transactions as reported on a monthly basis to the Securities Association. In a statement it said that no charges will be pressed against the broker, but informed that an investigation is ongoing. The watchdog added that the error, however, has not affected the overall size of the company’s business at the end of each reporting month during the period
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CITIC in the Crosshairs
The revelation of the error comes on the heels of an investigation against CITIC, following the admission of four of its executives to insider trading. The investigation leading to this is part of a wide-reaching campaign by the Chinese authorities against illegal practices in stock trading following the June stock market crash.
A company source told Reuters that the error would not have an impact on the broker’s financial results. The latest report in this regard by CITIC, for the third-quarter, featured a 54 percent increase in revenues and a 151.2 percent improvement in profits on an annual basis.