[4] Compiled from: Red Star News
 
Recently, a news story about Weibo influencer "Yi Wei," who has 376,000 followers, being fined nearly 100 million yuan by the China Securities Regulatory Commission (CSRC) has attracted attention. Currently, all content posted on the Weibo account "Yi Wei" has been cleared. Yi Wei is the legal representative of Shanghai Chunshan Xintang Investment Management Co., Ltd.

 

According to the CSRC website, the CSRC previously investigated and adjudicated Yi Wei's manipulation of "Sanfo Outdoor (002780.SZ)" and illegal engagement in securities investment advisory services. It decided to confiscate Yi Wei's illegal gains of 27.97 million yuan from manipulating "Sanfo Outdoor" and impose a fine of 27.97 million yuan; it also confiscated Yi Wei's illegal gains of approximately 23.94 million yuan from illegal securities investment advisory services and imposed a fine of 20 million yuan. The total amount of these penalties is 99.88 million yuan.
 
Case review
According to the "CSRC Administrative Penalty Decision (Yi Wei)," from November 1, 2018, to June 19, 2020 (hereinafter referred to as the manipulation period), Yi Wei actually controlled 76 securities accounts (hereinafter referred to as the account group) through direct control accounts, managed accounts, and borrowed margin accounts, used to trade "Sanfo Outdoor" and manipulate the stock price.

 
 

After investigation, Yi Wei issued trading instructions to traders Li and Huang, who were under his control at Chunshan Xintang, arranging for them to continuously buy and sell at specified times and prices, using capital and shareholding advantages to influence the stock price and trading volume of "Sanfo Outdoor." In addition to manipulating the securities market, Yi Wei was also involved in illegal securities investment advisory services, including engaging in securities investment advisory business without approval and providing direct or indirect paid securities investment advisory services.
 
Regarding the illegal securities investment advisory services, Yi Wei argued in his defense that "the email consultation content constitutes knowledge payment, not securities investment advisory services. No fees were charged to anyone for information sent via WeChat, Weibo, or WeChat Moments, and discussing stocks with individual members was not fulfilling contractual obligations."
 
Yi Wei also argued that "the investigation did not collect evidence from paid members, and the survey provided by the party shows that paid members do not consider the services provided by Yi Wei to be securities investment advisory services."
 
After review, the CSRC determined that Yi Wei used public Weibo posts to promote securities investment advice for recruiting members, subsequently sent weekly emails containing investment advisory suggestions to paid members, and added paid members individually on WeChat to provide investment advice via private messages or Moments. Overall, these activities constituted securities investment advisory services.
 
Additionally, the content of Yi Wei's emails to members included views on listed companies and related stocks, specific buying timings, suggested purchase prices, and his own stock holdings, which objectively constituted securities investment advisory services.
 
 
《[1] The People's Republic of ChinaSecurities Law
Article 160
Accounting firms, law firms, and securities service institutions engaged in securities investment advisory services, asset appraisal, credit rating, financial advisory, and information technology system services shall act diligently and faithfully, providing services for securities trading and related activities in accordance with relevant business rules.
Entities providing securities investment advisory services must obtain approval from the securities regulatory authority of the State Council; without such approval, they may not provide services for securities trading and related activities. Entities providing other securities services shall file with the securities regulatory authority of the State Council and the relevant competent department of the State Council.

 
 

 
[1] The author's perspective
On many professional websites and public accounts, it has become common to acquire knowledge and information for a fee. The boundary between paid knowledge and paid securities investment advisory services lies in whether specific securities, securities-related products, analysis conclusions, market trend forecasts, or explicit operational recommendations are provided, directly influencing investors' trading behavior and directly or indirectly generating economic benefits. If so, this falls within the scope of statutory franchising as stipulated in Article 160 of the Securities Law.
 
The key to the Yi Wei case is that he engaged in investment advisory business within the professional field of securities, which requires regulatory approval to conduct. If he occasionally issued predictions or provided free consultations, it would not violate prohibitive regulations. However, as mentioned earlier, such situations are widespread on the internet, essentially skirting the edge of legality. This not only risks penalties for violations but also easily leads to civil disputes. Therefore, when gathering information online, investors should stay vigilant, carefully handle information content, and avoid blindly trusting unqualified institutions or individuals.