Lettall Electronic(SH:603629) Xin Lang Cai Jing·2025-12-25 13:47Core Viewpoint - A recent criminal judgment from the Shanghai Pudong New District People's Court has exposed the corruption within the brokerage research report sector, highlighting the issue of "customized research reports" and raising concerns about the independence of brokerage reports and compliance in the capital market [1][3]. Group 1: Case Details - Analysts Zou and Cheng from a brokerage firm were sentenced for accepting bribes in exchange for creating tailored research reports to boost the stock price of Jiangsu Litong Electronics Co., Ltd. [1][3] - The court found that in April 2023, Zou and Cheng engaged in a "report for money" transaction, leveraging Zou's position to enhance the company's visibility in the secondary market [1][3]. Group 2: Financial Transactions - Zou received a bribe of 180,000 yuan, while Cheng, acting as an intermediary, received 50,000 yuan, totaling 230,000 yuan in illicit gains [2][8]. - The case came to light due to increased regulatory scrutiny, with Cheng voluntarily reporting to the police in December 2024, followed by both analysts confessing to their crimes in January 2025 [2][8]. Group 3: Court Ruling - The court ruled that both analysts committed bribery, with Zou receiving a ten-month prison sentence (suspended for one year) and Cheng receiving an eight-month sentence (also suspended for one year), along with fines of 100,000 yuan each [3][9]. - The judgment noted that the timing of the research report's release coincided with significant stock price movements for Litong Electronics, raising questions about the motivations behind the report [3][9]. Group 4: Market Impact - Following the release of the tailored report, Litong Electronics' stock price surged, reaching a historical high of 40.51 yuan per share in November 2023, representing an increase of over 155% for the year [4][10]. - The report was one of the first significant analyses of Litong Electronics since its listing in December 2018, leading to skepticism regarding its timing and intent [4][10].