Study Of The Crime Of Insider Trading

For many years, China's securities market has been carrying out the policy for insider trading that administrative penalty is given priority to, which, however, has had little effect. As a consequence, for the past two years insider trading has a tendency of getting worse and worse. Fortunately, it has caused the Party and the relevant government authorities to attach great importance and attention. In 2010 China's official newspaper People's Daily covered the cases concerning insider trading seven times in a row which was in fact really groundbreaking in securities market. Last year the case of Huang Guangyu, which is a case of receiving the highest penalty ever since the Insider trading has been set for the crime, let most Chinese know the name of insider trading sin. Some scholars have the argument that insider trading has become the most serious one in crimes concerning the securities market due to the fact that it has trampled the justice and fairness in the stock market and led to a lack of people's confidence in the financial market.This article explores the causes, the methods of curbing the crime of insider trading and the problems for adducing evidence through four aspects: the subject of insider trading sin, prosecution criterion, criminal responsibility, burden of proof. Meanwhile this paper puts forward relevant suggestions with reference to some foreign countries'mature practice of dealing with insider trading.First, the range of identification on the subject of the crime of insider trading is too narrow according to current laws and regulations, which lacks circumspect ductility. For example, on one hand, it does not make provision for primary insiders after the change of insider trading before deals in stock; on the other hand the identification on the ways of insiders'information dissemination and acceptance is not clear enough. This paper puts forward some recommendations on identifying the main crime of insider trading, which should be extended to all people aware of the information regardless of the facts whether the way of their access to information is legal, illegal or accidentally passive heard. One should be classified as an insider once he performs transaction with the help of the information he receives.Secondly, in the discussion of the standard for prosecution of insider information, this article notes that since the introduction of the Supplementary Provisions in 2008 which indicates the increase of turnover and profits to avoid the loss of clear value does great harm to the stock market. It also shows that around the world strict legislation against insider trading has been a trend, and proposes to reduce turnover and profitability of the value of avoiding damage. And by exploring the relationship between administration and criminal law, it stresses that in order to curbing insider trading, criminal sanctions should be made a essential strategy and that the threshold of judging on being guilt or guiltless should be lowered.Thirdly, this paper analyzes the phenomenon of light criminal liability for insider trading, mainly reflected in the facts that the term of imprisonment is too short and criminal fines are too low, which led to the low cost of crime. Lured by huge profits, potential insider trading criminals tend to take the risk to commit the crime. This article suggests that we can draw on the experience of the United States'practice in sentence-on one hand, we should aggravate punishment and raise the cap to life imprisonment; on the other hand heavier penalty to the perpetrator should be targeted to increase the penalties for criminal greed to maximize crime costs and increase the deterrent power of punishment.Fourthly, the paper discusses the causes of the difficulty with burden of proof in insider trading, analyzes the situation where evidence is hard to collect, and proposes to continue to improve the registration system and meanwhile take technical control measures as soon as possible, which is believed to not only have a great deterrent to potential insider traders, but also improve China's Criminal Procedure System.It is firmly believed that with the Party and the government attaching more and more importance and attention to curbing insider trading crime as well as learning from the experience of foreign countries'mature markets, if sustained high disposal is performed, the momentum of high incidence of insider trading will be weakened. And therefore we have every reason to expect a securities market where openness, fairness, justice and the normal order can be seen.