Talk Show Host Apologizes for Stock Manipulation

A former stock market talk show host has broken his silence about the punishment imposed on him by the country’s securities regulator in April for using his platform to manipulate stock prices to his advantage.

Liao Yingqiang, 48, used his position as the host of the “Money Talk” show on the China Business News Channel to tout stocks he already owned and sell them at a profit after they rose following his recommendations.

Liao told listeners of a show broadcast on his internet portal, iGuxuan.com, that what he did was a “mistake.” He admitted violating China's Securities Law but said he didn’t realize at the time that what he was doing was wrong.

“I didn’t expect my case would have such a big impact on the market, and now I realize that what I did was wrong,” Liao said. “I want to thank the securities regulator for its decision, which has brought order back to the market. This is a good thing for myself and for the market.”

The China Securities Regulatory Commission announced in an April 3 penalty notice (link in Chinese) that an investigation had found Liao violated a section of China's Securities Law that covers market manipulation by other means, including boosting share prices through media channels.

It said Liao took advantage of his position as a public figure to recommend stocks that he already owned. From March to November 2015, he bought 39 stocks which he then recommended on the program and later sold them at a higher price, netting him illicit gains of 43.1 million yuan ($6.4 million). The CSRC said it confiscated the gains and fined Liao 86.2 million yuan. It has not said whether Liao's case will be handed over to prosecutors.

Government crackdown

Liao was the host of Money Talk, a stock investment program, from February 2012 to April 2016 and gained a strong following among individual investors, who dominate China's stock market, for his lively patter and stock-picking skills. Individual investors make up about 80% of the trading volume in China's $7.6 trillion stock market. Mom-and-pop traders rely heavily on rumor-based trading and stock picking by popular media personalities.

After leaving the program, Liao set up iGuxuan, which literally means “a house for stock lovers.” The internet portal and app offers advice on investing, market views from well-known investors, broker research and investor education. In his mea culpa broadcast, Liao said his new platform had been approved by regulators and is compliant with rules relating to investor education.

Liao is the latest high-profile personality to be snared in a long-running government crackdown on stock manipulation, especially after the market rout of 2015. In July 2017, Zhu Weiming, another “Money Talk” host, was sentenced by a Shanghai court to 11 months in jail and fined 760,000 yuan for stock manipulation.

In January 2017, hedge fund guru Xu Xiang, dubbed China's Carl Icahn, was jailed for five and a half years and fined 11 billion yuan for driving up stock prices.

In August 2011, Wang Jianzhong, a securities trader and a regular commentator on the “China Securities” program on China Central Television's finance channel, was jailed for seven years and fined 125 million yuan for market manipulation.

Contact reporter Leng Cheng (chengleng@caixin.com)