Are You Crazy? He’s only an Intern Lawyer?
Chapter 468 - 464: Market Unwritten Rules, Legal or Illegal?

Chapter 468: Chapter 464: Market Unwritten Rules, Legal or Illegal?

Afternoon.

The first formal hearing of the Dongxing Securities case.

"Hello, sir, this is Dongxing Securities. Have you been trading stocks recently?"

"Hello, I’m from the investment department of Dongxing Securities. I have a bullish stock here, do you need me to recommend it to you?"

"Hello, a super bullish stock, buying is earning, hitting the daily limit every day, changing cars in a week, and buying a house in a month is not a dream!"

"Hello, I am..."

In the courtroom, a grating telephone recording was being played.

Whether it was the spectators in the hearing seats or the six jurors in the juror seats, their faces were somewhat speechless.

This voice on the phone, they knew it all too well.

Even if the opening was not about Dongxing Securities, the opening could be from some other xx company, xx group, or even xx bureau.

Anyway, whenever we receive calls like this, we have one word in response!

Hang up!

Just hang up the phone.

If you chat with them a little longer, who knows, they might want to sell you health products, financial products, loans, or even cars, houses, shops, and apartments.

Anyway, they want you to spend money!

"Hello, witness, you are from the investment department of Dongxing Securities, aren’t you?"

Zhang Wei walked up to the witness stand and asked the first witness coldly.

"Yes, I am from the investment department of Dongxing Securities." The witness admitted frankly without hesitation.

"Then, do you have any recollection of the recording just now?"

"This, isn’t this what all financial companies do?"

The witness said, glancing at the jury seat and then at the defendant seat, their expression showing no significant reaction.

After all, people from the investment department made calls like this all the time; they were used to it.

However, some skilled brokers only needed to make a few calls a day, contacting some familiar clients.

Some novice brokers still had to use this kind of wide-net approach to contact and unearth new clients.

"Doing this is actually illegal, do you know that?"

Zhang Wei continued his questioning.

"I’m not aware of that, because I’m not the person in charge of that new project." The witness hurriedly denied.

"In fact, I’m from the sales department of Dongxing Securities’ investments, and the project Zhan Qingze is in charge of is a different department that was newly established, which has nothing to do with me."

"I know that, but I subpoenaed you to testify not because of the new department, but because the method you financial people use to acquire customers is problematic in itself!"

Zhang Wei said with a cold smile, "Witness, let me ask you, to engage in securities and obtain trading qualifications, you need to establish a securities company, right?"

"Yes."

"Then, to get this qualification, what kind of ticket of entry is needed? Or let me simply ask, how much capital is required at a minimum to establish a licensed securities prosecution?"

The witness looked around, especially towards the jury.

"You need more than 200 million in liquid funds."

As soon as these words came out, indeed many members in the jury were impacted by this figure.

million, a sum they could hardly ever hope to earn in their lifetimes.

"200 million, a number that working-class people can’t even dare to dream of, yet it’s an entry ticket for the rich to play with capital~" Zhang Wei then lamented.

"Objection, inflammatory statement!" Xu Kongwen immediately stood up from the defendant’s seat to interrupt.

"Objection sustained!" Judge Ni agreed without indulging Zhang Wei and nodded.

Zhang Wei chuckled and continued towards the witness stand.

"Let’s set aside the issue of 200 million and talk about the financial market."

Zhang Wei paused, then asked, "Witness, do you know how many companies in Dongfang Capital have obtained securities trading qualifications?"

The witness raised both hands, counting on his fingers, "Dongxing, Nanxing, Minsheng, Fortune..."

After counting, he confidently answered, "A total of 19 companies!"

Zhang Wei, of course, had no reaction to this number.

He then asked, "Could you tell me how many financial management companies in Dongfang Capital parade securities trading qualifications, and how many companies are engaged in financial work?"

"This..."

The witness truly couldn’t come up with an answer this time, because the number was simply too high.

Financial companies, stock recommendation companies—any company registered for other projects, but actually making calls to investors under the guise of investment management—were just too many.

Heaven knows how many financial companies exist in Dongfang Capital, and if you also count microloans, futures trading, and even online finance, the number becomes quite terrifying.

"Witness, isn’t this number a bit too high?"

"Yes, conservatively estimated, there must be thousands, perhaps even tens of thousands?"

"Yes, tens of thousands... The number is indeed too large, which is why we can receive many calls from companies every day, a lot of harassing calls."

As Zhang Wei spoke, he paused for a moment before asking, "So tell me, why can some investors receive stock recommendation calls from over a hundred companies every day when there are fewer than 20 companies with securities qualifications?"

"This..." The witness didn’t know how to start again.

"No worries, just answer my questions. Aren’t these things the unspoken rules within your industry?"

Zhang Wei chuckled and raised a finger, asking, "First, a securities qualification requires a ticket for entry, 200 million, right?"

The witness nodded; this question had been answered already.

"Then, even within Dongfang Capital, those who have 200 million would be in the minority, wouldn’t they?"

"Yes, I suppose?"

"But everyone knows that you can make money on the financial market, at least having earned the right to act as a market maker ensures you’ll make money—this point you don’t deny, right?"

"I..."

Zhang Wei ignored the witness’s response and continued, "So here’s the question: I don’t have 200 million. I only have a few million, but I want to start a financial company and enter the capital market to make money. What should I do?"

"This..." The witness wanted to answer, but Zhang Wei directly skipped over him.

"It’s simple. Find a big company with the qualifications and rent the qualification from them!"

As soon as these words came out, many people in the courtroom were shocked.

Is that really possible?

"With the few million in hand, find a big company like Dongxing Securities and rent a securities trading qualification from them to recommend stocks to clients. That will suffice."

"This method is actually quite common in the financial market. Those financial companies, both big and small, whether known by name or not, have gained ’temporary’ securities transaction qualifications through such methods."

"Please notice that this qualification is not permanent, but temporary, available only for a certain duration, but if you operate properly, the few million in rental fees can be completely earned back during the time the qualification is active."

"Now the question arises, from whose pockets does the money come?"

Zhang Wei’s question directly led the jury and many in the audience to look at themselves, to look around.

Whose pockets does the money come from?

Of course, it comes from the pockets of the ’green hands’.

"I believe the processes involved in this case are actually the same as those of other securities companies."

As Zhang Wei spoke, he asked the witness, "Witness, as far as I know, those smaller financial companies renting securities transaction qualifications from you at Dongxing Securities, this kind of thing is actually not permitted by the Financial Bureau, right?"

"Yes..."

The witness’s complexion darkened as he replied.

After all, what he had to admit, although these were the industry’s unspoken rules, such rules were expressly forbidden by the Financial Bureau.

"So, in order to deal with the Financial Bureau’s investigation, what do you usually do, and what methods do those smaller companies use to avoid investigation by the Financial Bureau?"

"This..." The witness glanced at the defendant’s bench and, seeing no reaction from Qian Moli, had no choice but to speak.

"We would establish a new project team, then affiliate the small company with the new project team, so that they exercise the securities trading qualification under the name of Dongxing Securities. After an investigation by the Financial Bureau, no issues would be found."

"Hmm, thank you for telling the truth."

Zhang Wei was quite satisfied with the witness’s answer. "Then, the new project team involved in this case—they used the same approach?"

"Yes."

"Does Dongxing Securities know about this matter?"

"We only rented out the securities trading qualification externally. We’re not clear about how those companies will operate it!"

"But you must perform due diligence, right? You must check the operational procedures of the company, right? You must verify that the small company won’t recklessly tarnish Dongxing Securities’ reputation, right..."

"This— I don’t know... because I am not the person in charge of that project team..." The witness found it difficult to respond.

"Then who is in charge?"

"It’s Zhan Qingze!"

The witness could assert this answer confidently.

"Witness, you can’t possibly be lying with your eyes open, and you can’t just pin the blame on someone else, can you?"

Zhang Wei chuckled and asked, "As far as I know, a large securities company like yours would have a strict review system internally, to ensure that the rented securities trading licenses are not misused by the companies that rent them."

"This step is crucial; by doing this, you can ensure that those small companies won’t act recklessly and tarnish the reputation of Dongxing Securities, right?"

"Our company does indeed have internal auditing and verification departments."

"So, even though Zhan Qingze is the head of the new project team, the qualification review by the auditing and verification department and the subsequent review of the business procedures of the small companies could not possibly be done by him alone, correct?"

"This..."

Zhang Wei went back to the plaintiff’s bench and pulled out two documents from his briefcase.

"These are the signed documents from Dongxing Securities’ internal auditing department and review department, which indicate that Dongxing Securities has conducted an internal professional review of the business and operational procedures of the new project team."

"These two documents also show that all review procedures concerning the new project team at Dongxing Securities have been approved, and Dongxing Securities will be held accountable for any subsequent issues that arise, correct?"

"This..."

Seeing the witness hesitate, Zhang Wei pressed on, "What’s the matter, you can’t answer? But aren’t the signatures and seals on these two documents left by departments within your company?"

"There’s no signature from Zhan Qingze here, is there? If it’s your company’s internal auditing department and qualification review department that approved them, do they not have any responsibility?"

"This... I... I don’t know..."

The witness fiddled with his tie, feeling his breathing become a bit hurried.

Seeing the witness’s reaction, Zhang Wei was satisfied.

"Judge Ni, we no longer have any questions for this witness."

He walked down from the courtroom with a smile, while the people at the defendant’s bench, including Master Tang, looked grim.

Two minutes later, the cross-examination ended.

Sun Kongwen’s cross-examination of the witness hardly raised many questions.

Because the witness was from Dongxing Securities, one of their own, he did not want to make things difficult.

"The prosecution?"

"Judge Ni, we would like to call another witness from Dongxing Securities."

Zhang Wei said, then summoned another person from Dongxing Securities’ sales department.

"Hello, witness, you’re the ace broker from the sales department of Dongxing Securities, aren’t you?"

"Yes, I’ve won monthly sales champion, quarterly champion, and even annual champion!"

The witness sat in the witness stand quite proudly, looking pleased with himself.

"It seems then, that you’ve earned a substantial amount of commission relying on the financial industry, right?"

"Not at all, it’s just helping clients make money—I just take a little cut," the witness said modestly.

"Is that so, you’re really modest then."

Zhang Wei said, as if asking casually, "Then let me ask, where did all these clients come from?"

"They all came to Dongxing Securities on their own initiative!"

"All of them?"

"This..."

As the witness hesitated, Zhang Wei asked with a smile, "Witness, you’ve heard of the term ’internal competition,’ haven’t you?"

Internal competition!

People might not have known about it before, but now, with the popularity of internet culture, everyone understands what ’internal competition’ means.

"As I understand, the financial industry is relatively competitive internally, especially since you’ve achieved monthly and even annual championships—you must have outperformed everyone in your company to be elected, right?"

"Well, you could say that..." The witness’s expression became a bit unnatural, the complacent and proud demeanor gone.

"So, let me ask you, if everyone is just serving those walk-in clients, and everyone has the same source of clients, how come you were able to become the annual champion while others could not?"

"This..."

"Witness, could it be that many of your clients didn’t come through normal channels?"

As soon as this question was asked, the witness’s complexion changed.

"Cough, cough!"

On the defendant’s bench, Qian Moli quickly coughed to get Sun Kongwen’s attention.

"Objection!" the latter immediately stood up, voicing his opinion, "This question is irrelevant to the case!"

"Objection overruled!"

But this time, Old Ni stared at the witness stand with a stern face.

"Witness, please answer the question."

To everyone’s surprise, she seemed to be siding with the plaintiff.

It seems that Old Ni has received his fair share of harassing phone calls in the past, suffering from the annoyance.

With this in mind, Zhang Wei quickly resumed his previous line of questioning, "Witness, it seems you are unable to answer, no matter, I have the operational procedures here, I’ll read them to you!"

He returned to his seat, pulled out a stack of documents, and then began his performance.

"As we all know, Dongfang Capital has 19 securities companies holding licenses, and they rent out these licenses, resulting in over a thousand large and small companies in Dongfang Capital that can engage in financial securities trading."

"What money do these people make? They make money from the stock market, from investors, and where do these investors come from? Naturally, they need brokers to dig them out one by one."

"The harassing phone calls you receive every day are just one example. Some investors are interested in investing and happen to receive calls from Dongxing Securities or some other securities company, so they register a stock trading account, hoping to make a quick profit in the stock market—that’s a client."

"But in Dongfang Capital, although there are many people and quite a few with money, there are tens of thousands of financial firms, all eyeing them. With the market only so big, how shall it be divided?"

"At this time, brokers need a keen eye for developing clients or rather, have a means to independently develop clients. As long as you have more clients, the higher your commission. High client transactions lead to high commission earnings, and that’s how you make money."

"To put it bluntly, you make money when the client makes money, but you’re actually still making money even when the client loses!"

"Cough, cough!" From the bench, Judge Ni coughed.

"Sorry, I digressed."

Zhang Wei hastily apologized and then approached the witness stand, "Witness, you must have your own client development methods, right?"

"Yes... I suppose I do..." The witness finally showed signs of unease, with a hint of sweat visible on his forehead.

"Judge Ni, I must object once again, the plaintiff’s lawyer is harassing the witness!"

"Objection overruled."

Sun Kongwen stood up once more, but unfortunately, was interrupted by Judge Ni once again.

"Judge Ni..."

"Silence!"

Sun Kongwen, frustrated, could only sit down dejectedly.

Master Tang’s expression turned grim as well, his glances at Judge Ni and his own disciple were tinged with darkness.

"Since Judge Ni also wants to know, witness, there’s no need to hide or hedge. Can you do that?"

"This..."

Under Zhang Wei’s relentless questioning, the witness remained tight-lipped.

However, Zhang Wei had anticipated this and he directly flipped open the documents, then asked, "Witness, since you won’t talk, let me do it for you!"

"Did you, through bribery, obtain membership lists from several private, high-end clubs in our city?"

"Have you likewise, by the same means, gotten customer lists from our city’s horse racing clubs, antique trading houses, yacht clubs, luxury car clubs, and even golf clubs?"

"Have you used these lists to dig out and develop investment clients?"

The entire court focused countless eyes on the witness stand.

"This, well, everyone operates like this, those who register at these clubs are wealthy, isn’t that a given..."

Confronted with Zhang Wei’s pressing, the witness had no choice but to confess.

"Yes, they all have money, otherwise why would they have the leisure to indulge in these hobbies?"

Zhang Wei chuckled, but his face turned stern immediately, "But are you aware that what you are doing is illegal?"

"Ah, this..."

The witness was momentarily stunned but soon hung his head low.

Yes, it was illegal to sell the personal information of citizens and the confidential internal documents of clubs.

These clubs had a duty of confidentiality once a customer registered, but it was the club insiders who led the charge in selling client information for a tidy "extra income."

"So, witness, many of your company’s client lists are obtained through unclean means, aren’t they?"

"This... I don’t know anything..."

The witness once again found himself unable to speak, at a loss for words.

"No worries, you can pretend to be deaf and dumb, feign ignorance or even claim to know nothing at all; it doesn’t matter, as I’m only stating the unspoken rules of your industry."

"However, just because it’s an unspoken rule doesn’t mean you don’t have to bear responsibility. At least the things I mentioned in court, you were actually involved in, so you’ll have to face legal sanction."

"Similarly, Dongxing Securities won’t get away scot-free either!"

Zhang Wei said, casting a cold warning glance toward Qian Moli in the defendant’s seat.

Naturally, this annoyed the latter’s party, who wore a look of displeasure.

"Judge Ni, regarding this witness, our side has finished questioning!"

Zhang Wei stepped down from the courtroom once again, his goal evidently achieved.

The direction of the courtroom began to change!