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China fines brokerage $85M for stock market chaos

August 30. 2013 5:36AM
Associated Press

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(AP) One of China's biggest securities firms has been fined $85 million and four executives banned from the industry after computerized trading mistakes caused wild swings in Chinese stock prices.

State media said Chinese regulators on Friday also ordered Everbright Securities to stop trading on its own account.

Everbright was blamed for wild swings in stock prices on Aug. 23. Regulators said a design flaw in Everbright's computerized trading system caused it to submit a multibillion-dollar avalanche of mistaken orders. That caused prices of some stocks to surge by the maximum allowed daily limit of 10 percent before falling back.

According to the news reports, the China Securities Regulatory Commission also said investors would be allowed to sue Everbright over losses blamed on the price swings.

Associated Press

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