Concerned party: Ye Zhigang，male, was born in April 1974. He served as Chief Mechanical Industry Analyst of Haitong Securities Company Limited（hereinafter referred to as Haitong Securities ）. His address is No.22, Lane 383, Yushan Road, Shanghai.

According to relevant provisions in the Securities Law of the People’s Republic of China (hereinafter referred to as the Securities Law)，CSRC has placed the case about Ye Zhigang’s unlawful market manipulation on file for investigation and review，and legally informed the concerned party of the fact, reasons and basis of deciding an administrative punishment, and the rights of concerned party under the law. The concerned party made a legal statement and defense，but did not request a hearing. The investigation and hearing upon this case has been closed.

The investigation results show Ye Zhigang had the following illegal facts：

In January 2006, Ye Zhigang joined the Research Institute of Haitong Securities. In April, 2008, he was appointed as the chief analyst of Level 5, and responsible for studying the machinery industry and writing research reports. According to the workflow of Research Institute, the research report finished by the analyst and reviewed by the Institute shall be sent to the customer by e-mail. The receipients include internal staff of Haitong Securities, all domestic fund companies, insurance companies and other institutions as well as some individual customers. Before Research Institute of Haitong Securities delivered the research reports written by Ye Zhigang from September 2006 to April 2009, Ye Zhigang bought many stocks recommended in the reports including G Electromechanics, XGMA Machinery, Zoomlion, Huayi Electric, Yunnei Power, ST Zhongding, Xinmao Science & Technology, Zhongding, Zongshen Power, Shanghai Mechanical & Electrical, Keda Industrial and Shantui many times through his own account and the securities accounts of Liu and Ren. After the delivery of the reports, he then sold the stocks to make a profit.

As described in the statement and defense materials of Ye Zhigang, he bought the stocks of Xi’an Aircraft International Corporation on April 19, 2007, but sold them before the report about Xi’an Aircraft International Corporation was released by the Haitong Securities. After He purchased stocks of Xuzhou Construction Machinery Science& Technology Co., Ltd. from February 7 to February 9, 2007, Haitong Securities released the research report finished by Ye Zhigang. In the research report，Ye Zhigang did not rate the stock, having no intention of recommending it to investors.

Therefore，the earnings from the trading of the above stock should not be regarded as illegal incomes. Meanwhile, Ye Zhigang raised an objection to the method of calculating the illegal income because some stocks were not sold.

CSRC thinks Ye Zhigang’s subjective intention of enticing investors to trade was not obvious when he traded the above stocks of Xuzhou Construction Machinery Science& Technology and Xi’an Aircraft International. Thus his transactions in those two stocks constitute a minor offence. Therefore, the stock returns concerning the two kinds of stocks can not be identified as illegal incomes. The review results show the total illegal gains of Ye Zhigang are 325,787.19 RMB yuan.

Ye Zhigang’s behavior violates Paragraph 1.4 of Article 77 of Securities Law，and constitutes the case of "manipulating the securities market" as described in Article 203 of Securities Law.

According to the fact, nature, details and social harm degree of concerned party’s unlawful act, and the provisions in Article 203 of Securities Law，CSRC decideds to：confiscate Ye Zhigang’s illegal incomes of 325,787.19 RMB yuan，and impose a fine of  1 million RMB yuan.

Within 15 days after receiving the sanction decision, the above concerned party should submit the fine to China Securities Regulatory Commission（Bank of deposit：Head Office of China Citic Bank; account No.:7111010189800000162. China Citic Bank will directly turn over the fine to the State Treasury.），and send the copies of payment voucher marked with the name of concerned party to the inspection bureau of China Securities Regulatory Commission for filing. In case of refusing to accept the saction decision, the concerned party，may submit the application for administrative review to China Securities Regulatory Commission within 60 days after receiving the  decision, or initiate an administrative litigation to the people’s court in the jurisdiction within three months after receiving the decision. During the period of review and litigation, the above decision shall remain valid.

China Securities Regulatory Commission　

January 21, 2012