Transnational Secuirties Fraud And Preventive Measures

The securities industry which has been considered as a pioneer in the financialfield is an important channel of corporate finance to expand, but also an importantsource of investor capital appreciation. It leads the global economy, and its effect isobviously. However, in recent years, a series of important international influence ofsecurities fraud cases, especially after the former Chairman of the NASDAQexchange Madoff fraud was exposed, set off a worldwide questioned andcross-examination of the supervision of the securities industry. In order to protectinvestors, maintain international financial stability and prosperity, many countriesbegan to examine the relevant legislation of its own securities and began to seekinternational cooperation to prevent the occurrence of similar cases.The paper is divided into five parts. After a brief introduction to the entiresecurities industry and securities fraud, there are three separate parts presentingsecurities fraud behaviors—inside trading, market manipulation and falsestatements.There are also some domestic and international cases, national legalcomment on China’s securities supervision of the fraud and improvement advices.The first part, the basic theory of transnational securities fraud. This section firstmakes a presentation to securities, securities fraud and other related concepts, a briefdiscussion of the characteristics of securities fraud and its causes, and leads to theback of the discourse on the three major securities fraud.The second part, insider trading and its prevention. As the most important path ofthe three major securities fraud, insider trading, is thought to be guity nowadays whileit used to be the motto of Wall Streets. This paper starts from its simple legaldescription, analysis of the U.S. Sailing hedge fund founder Rajaratnam and GomeHuang Guangyu, president of both cases, and examines the shorcomings caused bycontemporary securities industry, then compares the U.S. and Chinese law, proposingthe establishment of short system to achieve the balance of administrative means andmarket-based instruments so as to prevent insider trading.The third part, market manipulation and its prevention. Securities fraud crimes ingeneral are superior crimes, and market manipulation will the delegate of this crime.This section also discusses the legal analysis and the adverse consequences of the two"corner" cases of US and Hanson case of China.Through the comparison of the Chinese and foreign legal market manipulation provisions, it is recommendedcalculated from the burden of proof of liability and compensation to improve theregulatory system in China, and hopes that all countries strengthen cooperation inorder to achieve the effect of win-win.The fourth part, false statement and its prevention. One of the fundamentalprinciples of the Securities and Exchange is the principle of good faith, which is alsothe basic requirements of information disclosure, and false statements clearly shakenthe foundation of the Securities and Exchange great harm to the integrity of thesociety within the transaction. After introducing the false statements relatedinformation disclosure system and comparision of United States Marty case, andChengdu red listed,this part leads to China and the United States on false statementsRegulation comparative analysis, proposing the improvements of pre-program andcollective litigation to achieve the purpose of the regulation.Part V, Conclusion. There is a brief description of the importance of thesecurities industry in today’s financial environment, believing that only the countries oto strengthen cooperation and exchanges, common supervision may eliminate theoccurrence of similar cases.