China's securities watchdog on Friday slapped the Shanghai-based Everbright Securities with record penalties totaling 523 million yuan ($85.46 million) for the August 16 abnormal trading.

According to a statement by the China Securities Regulatory Commission (CSRC), the company's illegal gains of 87.21 million yuan earned from trading malpractice will be confiscated as part of the penalties. An additional fine of 436 million yuan will also be imposed.

"The CSRC chose the highest standard of fines, given the wide influence of the case," Yang Zhaoquan, a lawyer at Beijing Vlaw Law Firm, told the Global Times Friday.

China's Securities Law stipulates that insider trading activities can be fined up to five times the illegal gains.

By late Friday, the company had no comment on the largest fines ever issued on China's securities traders.

This also came after trading in shares of this Shanghai-listed company was suspended on Friday, marking the third halt since a flurry of trades executed by the troubled brokerage firm set off a massive but short intraday surge of 5 percent on the benchmark Shanghai Composite Index on August 16.

The violations were identified as insider trading, disclosure of misleading information and other breaches against internal control regulations of securities companies, said the regulator.

The CSRC will also punish five employees responsible for the abnormal trading. Four of them will be fined 600,000 yuan each and banned from undertaking securities and futures business for life, while Mei Jian, secretary of Everbright's board of directors, will face a 200,000 yuan fine for misleading the public following the case.

The then president of the brokerage, Xu Haoming, resigned on August 22 and was replaced by Yuan Changqing.

The company will be asked to shut down its proprietary trading desks, excluding the arm responsible for fixed income business. A suspension on approving proposals for new businesses will also be placed for an unlimited period of time, according to the regulator.

So far, the securities trader has not shown any sign of trying to make up for the losses incurred by certain investors.

The regulator noted that in accordance with the country's Securities Law, these investors have the right to file civil litigations for compensation, of which the exact amount would be set judged by the judiciary organ.

"I've already received enquiries by some retail investors, who lost up to 100,000 yuan because of the insider trading," Yang said.

However, lawyers are not optimistic about the fate of any such legal actions, as based on their experiences, few retail investors can win lawsuits filed against insider trading.

Last year, two investors, who sought 6.8 million yuan in compensation for insider trading by Huang Guangyu, former chairman of the home appliance retailer Gome, and his wife, lost their case, as a local court in Beijing declared there was a lack of evidence.

"It is difficult for investors to prove their losses were caused by insider trading," Zhang Yuanzhong, the lawyer handling the Gome case at the Beijing Wentian Law Firm, told the Global Times Friday.

Furthermore, the Supreme People's Court has no judicial interpretation concerning insider trading, making it difficult for judges to determine appropriate compensation, Yang explained.