Category: Money tips Release Date: 2006-03-26
In China's securities market, the primary share offering was once synonymous with wealth to buy initial offerings and wealth is not a dream. Flow requirements can not meet the listed cases, the emergence of the OTC approach --- a semi-market, public corporate shares, private placement shares, internal equity card transactions are voluntary, and even bonds, stocks, subscription receipts have been speculation. Subsequently, there has been STAQ system and the NET system, there by the local government and come forward to the formation of the People's Bank branches throughout all parts of the securities trading center, which in fact is China's OTC market is the private placement shares of the company outside of the Main Board principal place for equity flows.
However, after 1998, in order to prevent roots stocks, the phenomenon of long transactions, the securities regulatory authorities below, where the securities regulatory authorities without the approval, prohibit any business under any name or initial offerings and issued to the society. In addition to stock exchanges for securities transactions, against other units and establishments dealing in securities, which is for the then issued "Securities Act" recognized. At the same time, STAQ system, NET system and the Securities Trading Center has also been around the rectification. While the door shut, but related issues has not been resolved.
Subsequently, the regulatory authorities while continuing to combat illegal distribution and illegal trade stocks, but even the huge profit-driven, as well as a huge stake in the market demand and liquidity demand-driven, the underground stock still exists. As part of the stock traders did not quit that, but intensified, with more subtle, more diversified way of engaging in underground activities in the stock market. Around 2000, calls for the establishment of GEM has grown, underground stock eye on the GEM Enterprises. However, GEM does not come out after a long, underground stock began to set on claims that can be listed overseas companies.
According to Shanghai Securities News investor activism volunteer corps, members of the Shanghai New law firm up to Wen Wang Yan Song a lawyer, at present the ground floor trading mainly in the following steps:
Step one: propaganda to sell the stock. Intermediary companies register their agreement on a very low price of funds to the major shareholder accounts, and then by the intermediary institutions will sell shares to investors through publicity. Promotional generally referred to as the stock listed on Nasdaq soon, and the current selling price low, and high rates of return in the future, and certain large financial institutions to underwrite the shares and so on.
Step two: attracted investors. Allow investors to buy stocks, need to use a variety of tactics to attracted investors, so that investors will invest in profitable companies and a promising future, and then pulled the stock to accept fiction. This includes the listing of false propaganda, deliberately false dividends, repurchase of false promises. Among them, a false market information refers to the credibility of the media, advertising, claiming that the development needs of businesses large capital investment in a listed sponsor agreements and consultancy agreements, etc.; intentionally false dividend is to give investors their money in order to return the name of a part of dividends to investors persons; false promises commitment to investors to buy back the claim that under certain conditions, companies may buy back its equity investment and access to certain benefits.
The third step: illegal transaction. When investors put money into the agency account, the intermediary institutions will prove to be equity investors hold credentials to investors and enable investors to sign a confirmation of the risk, and some need to go to the relevant trustee handling the transfer of ownership shares of the procedures, to At this point, the transaction is completed.
