"Saturday marked the commencement of a trial in Southern China for the former president of Guangfa Securities, China’s sixth largest stock brokerage firm, over allegations of insider trading that began in 2006. At that time, Chinese authorities accused Dong Zhengqing of tipping off a reverse merger between Guangfa Securities and Yan Bian Road Ltd., a company listed on the Shenzhen Stock Exchange, so that Guangfa could obtain a stock market listing without meeting government requirements - an all too common practice in China, according to an Associated Press story on the trial.
Dong allegedly tipped off his younger brother, Dong Dewei, and a former classmate, Zhao Shuya, about the acquisition, and both allegedly profited from the deal. According to Xinhua News Agency, they raked in 50 million yuan ($7.3 million) and 1 million yuan ($146,000) respectively, after buying Yan Bian Road stock before the deal was finalized and publicized. Although the three defendants have reportedly already confessed to the crimes, they denied their confessions in court, claiming they were extracted through intimidation and inducement by Chinese police."
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