On The Civil Liability System Of Insider Trading

Insider trading refers to the action that the people who hold the inside information owning to their specific status or position carry on the stock trading with these inside information both directly and indirectly or leak out these information to make some other persons profit from it illegally.Since the 1990s, as corporate governance has paid more attention to the protection of minor investors, many countries have consummated their legal system on prohibiting the insider trading in succession. Among them the civil liability system of insider trading has became one of the most important part. It supports the tenet of the insider trading prohibiting efficiently from the afterwards redress's point of view. It has become global trend to prohibit the insider trading by law. Many countries have made strict and particular laws on the cognizance of the inside information, the subject of insider trading, the action of insider trading and the punishment to insider trading. Thus provides stable legal ensurance for the legal supervision and enforcement on insider trading.Comparing with grown up foreign market, the market economy reform in ourcountry focuses on the leading and meddling of public right. As for the Corporation Law and Securities Law, it attaches too much importance on administrative and criminal sanctions, While there are a good many imperfections in civil liability system. As it ignores civil damages for the casualties, the improvement of stock market in our country is therefore devoid of a suit of self-development mechanisms.This paper introduces basic concepts and regulating rules of insider trading and discusses the theoretical foundation for civil liability system of insider trading, the legislation practice, the substantive and litigious system on civil liability of insider trading for the preservation of contributing to the construction and improvement of the civil liability system of insider trading in our country.This paper is made up of four chapters. Chapter One discusses and analyzes the basic concepts and legal regulations of insider trading by introducing the definition and specialty of insider trading on stock market in our country. And it discusses the dispute on prohibiting the insider trading or not. On synthesizing all the viewpoints in academia, it brings forward the factors for cognizing the insider trading. Then the paper approaches the current legal system and enforcement on the regulation of insider trading in our country.Chapter Two is on the study of theoretical basis and legislation practice for civil liability system of insider trading. On the analysis of the legislative foundation for civil liability of insider trading this part introduces legislation practice on it in America, Britain, Japan and Taiwan.Chapter Three expounds the substantial legal system of civil liability on insider trading. After presenting three principles to take responsibility in theory, this chapter explains the four component parts of civil liability in insider trading on the action, the fact of damage, the causality and the fault and analyzes the way to count the damages in insider trading, including the ceiling and the way of calculating.Corresponding to the substantial system in Chapter Three, in the last Chapter, the author discusses the litigious system of civil liability in insider trading, such as group action, Shareholder's Representative Action, Action Taking, put forwards the opinion of litigious mode for civil liability in insider trading of our country that comes from the proper combination of the three litigious patterns. Also last Chapter advances some ideas and suggestions on the necessary systems correlated with the improvement of this litigious system, including the charge of lawsuit, the risk litigation.