More than two years later, the insider trading case behind the strategic partnership between Changan Auto and Huawei has fully surfaced. In this case, employees from both companies teamed up to “bottom-fish” using inside information, with total purchases reaching 61 million RMB and illegal profits exceeding 4 million yuan. The China Securities Regulatory Commission (CSRC) imposed a hefty fine of 16.69 million RMB(~$2.5 Million), and evidence of suspected criminal conduct involving multiple individuals has been transferred to public security authorities. In November 2023, Changan Auto and Huawei signed an investment cooperation memorandum. The incident dates back to November 26, 2023, when Changan Auto and Huawei officially signed an “Investment Cooperation Memorandum” to explore strategic cooperation in smart vehicle business. Huawei planned to set up a company focused on automotive intelligent systems and component solutions, in which Changan Auto intended to invest. HUAWEI However, unusual signs emerged in the market before the official announcement. Starting November 23, 2023, Changan Auto’s stock price rose consecutively, surging 7.05% that day with a trading volume of 13.68 billion RMB, far exceeding levels in preceding days. On November 24, the stock gained another 2.25%. Rumors also began circulating online, suggesting that inside information had been leaked prematurely. Regulatory investigations found that five employees from the two partners used inside information to heavily buy Changan Auto shares, with total purchases of 61 million RMB and total illegal gains of over 4 million RMB. After the announcement on November 26, the stock hit its daily upper limit for two consecutive days, and all five sold their shares for profits. Administrative Penalty Decision of the China Securities Regulatory Commission. Insider trading is often called a “chronic disease” of capital markets. It violates the principles of openness, fairness and impartiality, seriously disrupts normal information dissemination and trading order, and directly harms the legitimate rights and interests of investors. The CSRC determined that the purchases made before the inside information was public constituted insider trading. It decided to confiscate the illegal gains of Han and others, impose a total fine of 16.69 million RMB(~$2.5 Million), and refer evidence of suspected criminal conduct to public security authorities in accordance with the law.