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China's biggest brokerage Citic in $166bn error | China's biggest brokerage Citic in $166bn error |
(about 3 hours later) | |
China's biggest brokerage, Citic Securities, overstated its derivative business by $166bn (£110bn) from April to September, according to the country's securities association. | |
The Securities Association of China said the firm inaccurately inflated the amount of its equity swap transactions in a report submitted in October. | The Securities Association of China said the firm inaccurately inflated the amount of its equity swap transactions in a report submitted in October. |
Citic said the error occurred due to a system upgrade and has been corrected. | Citic said the error occurred due to a system upgrade and has been corrected. |
Probes have resulted in executives confessing to insider trading at Citic. | Probes have resulted in executives confessing to insider trading at Citic. |
In September, shares of China's largest state-owned brokerage slumped after it reported that three executives, including its president, were under police investigation. | In September, shares of China's largest state-owned brokerage slumped after it reported that three executives, including its president, were under police investigation. |
The firm has been part of a crackdown by China's regulators on irregular stock trading since mainland markets plunged dramatically in mid-June. | The firm has been part of a crackdown by China's regulators on irregular stock trading since mainland markets plunged dramatically in mid-June. |
Shares dip | |
The securities association, which is partly overseen by the China Securities Regulatory Commission, said it was investigating Citic's overstatement and would take further action if necessary. | |
It did add that the error did not affect the month-end net size of Citic's business. | |
The brokerage told the Reuters news agency that it had amended the figures at the start of November and the size of its swaps business was $6.2bn. | The brokerage told the Reuters news agency that it had amended the figures at the start of November and the size of its swaps business was $6.2bn. |
An equity swap is a type of derivative that refers to a cash exchange between realized gains on specific stocks and fixed interest rates over a certain period of time in the future. | An equity swap is a type of derivative that refers to a cash exchange between realized gains on specific stocks and fixed interest rates over a certain period of time in the future. |
Shares of Citic Securities fell 0.7% in Shanghai. |
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