Criminal Legislation And Justice On Insider Trading In China

During the recent years, China’s legal society has made great achievements in theCriminal Regulation of Anti-inside trading of Securities. But there are stillshortcomings. For example, the introduction of foreign theories failed to fullyintegrate with the real situation of China’s Securities market. There is also lack ofin-depth professional analysis in this field. I chose the topic “Criminal regulation ofAnti-inside trading of Securities” as my research topic. I hope that I would achieve abreakthrough in this field and make some of my personal contributions for thelong-term stability of China’s Securities market.According to No.(2010)55Government Document published by General Officeof the State Council of the People’s Republic of China (A Proposal for Crackdown onand Prevention and Control of Insider Trading in Capital Market), insider tradingrefers to a practice in which insiders such as senior executives, large shareholders andactual controller in public companies, insiders in administrative departments ofexamination and approval divulge or take advantage of inside information to buy andsell securities out of self-interest before vital information such as merger ofcompanies and business achievement is announced.The methodology of this thesis includes legal text analysis, case study andcomparative analysis. The thesis is composed of four chapters.Chapter One introduces the legislative background and evolution of foreign insider trading and analyzes insider trading and this kind of crime in China. If we canproperly draw on good experience of punishing and controlling insider trading crimein other countries and establish perfect supervision system, the Chinese securitiesmarket will be maturer and more prosperous.Chapter Two analyzes the current legislation on insider trading crime in Chinafrom the perspectives of object of crime, objective aspects of crime, subject of crimeand subjective aspects of crime. According to the current criminal law, insider tradingand divulging inside information crimes refer to illegal activities of seriouscircumstance in which insiders of securities trading or individuals who illegally obtaininside information of securities trading divulge the information related to the issueand trading of the securities and other information that has significant influence on theprice of the securities or buy or sell those securities before that information is madeknown publicly.Chapter Three analyzes the American approaches to regulating insider trading bycriminal law and compares them with the Chinese legislation. Based on thecomparison, some measures for improvement are put forward. The suggestions are asfollows: define insider trading crime as a conduct crime instead of a circumstancecrime; lower the threshold for determining crime; amend the statutory penalty forinsider trading crime; subsume short-swing trading under the category of crime;determine that “nonfeasance” is one way of insider trading; add “qualificationpenalty”.Chapter Four points out the criminal justice plight and proposes some strategiesfor dealing with it. We should thoroughly prevent the interference from regionalprotectionism, give viable judicial interpretation and realize the intervention fromsecurity apparatus.