Study Of Insider Trading Civil Liability Issues

This thesis focuses on the civil liability of insider trading. As one of the three kinds of the violations against the Securities regulations in the stock market, insider trading is the primary object of the supervision. The civil liability institution plays an important role in the supervision for it give the victim the right to claim for compensation for the insider trading so that it can deter the insiders from insider trading effectively. By the use of a variety of methods-semantic analysis, history inquiry and comparative study, the author points out the shortcomings of the existing institution and the problems the statute face to, and provide some suggestions on the legislation.The dissertation is divided into seven broad parts. Part One points out the harm of insider trading and traces the history of the preventing insider trading worldwide. Part two analyzes characters and advantages of the civil liability institution, holds that the institution should be used for the purpose of preventing the insider trading effectively. Then the author deals with the existing legal system governing insider trading and points out the deficiency of it. Part Three uses the basic theory of civil law to discuss the nature and the means of the civil liability of insider trading, and holds that the liability is the civil liability of tort but not the civil liability for breach of contract or other kinds of liabilities. After analyzing the main methods of bearing civil liability, the author concludes that the compensation for losses is the appropriate methods of the civil liability of insider trading. Based on the above analysis, Part four analyzes four legal requirements of insider trading and the defense of the insider to the claim for the liability. The part deals with the conception and the essential factor of insider trading at first, then discusses the other three requirements of insider trading and holds that not only the direct trading can constitute insider trading, the other manners such as divulging or advice can also constitute it. This part also discusses the relation between insider trading and the short-swing trading. Part Five has a discussion of the persons who fall within the defined categories of insiders and bear the liability for the victims, holds that the term (renyuan) used in the Article 183 of the Securities Law should be replaced by the term (ren). Part Six discusses the claim for the liability imposed on the trading insider. Attention is then focused on the rule supporting the claim, the subject, the scope and the limitation period of the claim. Part Seven discusses the problems of the action of the liability. It concludes that the class action is not a fit form of the action for the victims and the court involved in such a suit. It also treats with other problems of the insider trading action and gives some suggestions to them.