Research On The Legal Regulation Of The Civil Ability Of Insider Trading

With the China's increasing prosperity of securities trading in 1990's, from which the insider trading originates is becoming a deluge. Nevertheless, there are no provisions of civil liability on how to compensate for the damages of investors which are caused by the insider trading to maintain the fairness, justice and publicity of securities market and to protect the rights and interests of investors. This dissertation is aims to make a research on this subject.Based on the reason of protection of investors, this dissertation analyze some legal problems on the construction of the civil liability system of insider trading by the method of criterion analysis and comparative research and the application of the fundamentals and frame of the tort law. Consequently, the author brings forward a fundamental frame of the construction of the civil liability system of the insider trading.Based on the above argumentation, the dissertation is composed with three chapters.The introduction introduces the conceptions, the harm by insider trading, the importance of the constructing civil liability of insider trading and the research method and range of this dissertation.The first chapter is about the current legislation about insider trading in overseas and domestic. Except for the introduction to the overseas legislation, this chapter analyzes the defects of Chinese legislation and explains the reasons.The second chapter discusses the legal problems that are needed to be resolved in the construction of the civil liability system of insider trading. Firstly, whoever knows the inside information should bear the civil liability which is not limited in the insiders, quasi-insiders and other persons who get the inside information by illegal means. Secondly, the composing key elements of the liability are: trading by using inside information, the doer's fault onpurpose, the fact of damage and the causation. This part's main ideas are as follows: The inside information should be those have significant influence on the price of the security and are unknown to the public; the civil liability should depend on the transaction ; the fault on purpose should be judged respectively by the different types of insider trading; the damage should be identified on the assumption of regulations of law; the causation should be determined by the doctrine of statutes' purpose; the form of civil liability is only the compensation for damage whose amount is equal to the amount of the profit gained by the illegal transaction.The third chapter deals with the mechanism that realizes the civil liability of the insider trading. Firstly, the plaintiff of the civil action is any person who was contemporaneously trading the same security on the other side of the market while the defender is the doer who made the insider trading. Secondly, the ideal mode of action is the class action. Thirdly, being concerned with the burden of proof, in the author's opinion, the fault on purpose and the causation should be proved by the plaintiff.Based on the above discussions, this dissertation puts forward the fundamental frame of the system of the civil liability of insider trading.The construction of the system of the insider trading civil liability needs not only the further research on the theory, but also on the sedimentation of thought of law on individuals.