Former fund manager allegedly made profits of 18.83m yuan

China's supreme prosecutor has lodged a protest against a local court ruling on an alleged insider trading case involving more than 1 billion yuan ($162 million) in funds, with the country's Supreme People's Court, a circular said on Wednesday.

Ma Le, a 32-year-old former fund manager, had allegedly made illegal profits of 18.83 million yuan from insider trading worth 1.05 billion yuan.

Insider trading is the buying or selling of a security by someone who has access to material, or non-public information about that security.

China's supreme prosecutor said a ruling on the case made by Guangdong's higher court was an "erroneous application of the law" and that its sentencing was "inadequate", the circular said.

Ma was allegedly taking illicit profits by trading shares in 76 companies. The case is the largest in terms of the trading period involved, the number of stocks and value of funds and profits involved since February 2009, when insider trading was defined as a crime.

In March 2014, Shenzhen's intermediate court sentenced Ma to three years in prison with probation of five years. He was also fined 18.84 million yuan, and the profits were to be confiscated.

Shenzhen's prosecutor first filed a petition against the ruling for erroneous application of the law and inadequate sentencing. At the second instance, Guangdong's higher court affirmed the intermediate court's ruling as the final judgment in October.

"Based on the content of the judgment and protest, the dispute lies in whether the offense shall be defined as 'serious' or 'particularly serious', as the latter should bring about more severe punishments including a sentence of up to 10 years' imprisonment," said Pan Yueqing, a lawyer at Shanghai Shenhong Law Firm.

Ma's case is one of the more than 20 since 2013 when the China Securities Regulatory Commission strengthened probes into insider trading to restore confidence in the stock market and protect investor interests.

The commission conducted 25 insider trading investigations in the first half of 2014, according to its latest half-year report.

"The regulators have been very serious about preventing insider trading. Staff in my company receive warnings and cautioning materials on cases from time to time," said Zhang Xufeng, a 24-year-old research specialist in a fund company.

Based on the content of the judgment and protest, the dispute lies in whether the offense shall be defined as 'serious' or 'particularly serious', as the latter should bring about more severe punishments including a sentence of up to 10 years' imprisonment."