| Along with the development of Chinese folks’ sense about money managementand financial investment, security transaction, as one form of trading, has become anintegral part of China’s National Economy. However, the prosperous of Chinesesecurity exchange market also causes various kinds of illegal, criminal acts, whichseriously undermines “the fairness, justice, open” principle of market, intrude on thelawful rights and benefits of most investors, and heavily impair the confidence ofother investors. Among all kinds of illegal acts, insider trading and disclosure ofinside information happened frequently, and showing variety modes of behavior,diversification of the behavior, urgently needs a target legal regulation to set rules.China People’s Supreme Court, Supreme Procuratorate issued a judicialinterpretation in May2012, which is the first specific interpretation about crime ofinsider trading. This paper analyzes the issues about the objective behavior,classification of defendant and circumstances of sentencing in <Crime of InsiderTrading Judicial Interpretation>, and set proposed modification and improvementproposals which based on the related insider trading crime theory, rules and cases ofUnited States. The main body of this thesis was divided into three chapters.First chapter mainly to analyze and solve the problems about the objective acts ofinsider trading, divulging inside information in the <Crime of Insider Trading JudicialInterpretation>. Given our current "Criminal Law","Securities Act", the provisionalregulations and the judicial interpretation, the objective of the crime of insider tradingbehavior have different classification criteria, to tease out and summarized into threecategories as follows: inside employee themselves use the inside information to deal with securities, insider whistle blow inside information to others, as well as insiderask others to the purchase or sale of securities expressly or impliedly. For the behaviorof leaking inside information to others whether meet the incriminating standardsshould be based on the security classification of the information involved, the methodto disclose the information, and the relationship between the tipper and tippee, as wellas the parties’ behavior in a particular case transaction and other factors. The behaviorof others to trade securities for express, implied, must be recommended by thereceiver informed or not, or recommended by the actual implementation of therecommendations of the insider trading conviction. In addition, the article3andarticle4of <Crime of Insider Trading Judicial Interpretation> set two kinds ofconstructive scenarios which is a positive response to actual judicial situation, makingthe operating status of the judicial practice may determine that insider trading hasbecome more scientific and clearer standards. On the one hand, the degree ofcoincidence of the transaction time, the degree of departure from the usual habit oftrading as well as the degree of interests associated between the parties which wouldbe presumed to incriminate; On the other hand, for the party’s stake in the targetcompany, if there is pre-entered into contract, plans, involving information has beendisclosure would be the defense to be sinned. Comparing the standards aboutpublication of insider information in China and the standards in the United States,according to the type of information involved, the characteristics of the informationdeveloped and the company’s business practices to determine the standards of theinsider information is more appropriate, and if China adopt substantive criteria ofinsider information disclosure will be more suitable for the practical operation ofjustice.The second chapter mainly analyze and solve the problems in the <Crime ofInsider Trading Judicial Interpretation> of Article1, Article2, which about the subjectof the crime of insider trading. In reference to the United States the classical specialrelationship theory, the tipper and tippee theory and misappropriation theory as wellas relevant laws, regulations and cases. To analog analysis inside staff, people whohas illegal access to inside information respectively, and demonstrated three theoriesto improve China’s securities crime of insider trading provisions. Firstly, theprovisions of Article1of <Crime of Insider Trading Judicial Interpretation> rules theinside staff, corresponding to the classical special relationship theory. The personwithin the company has fiduciary duty owed to the company, and takes the substantive criteria whether he sits on the corresponding position. Secondly, theprovisions of Article2of <Crime of Insider Trading Judicial Interpretation> regulatesthe people who illegally obtaining insider information can be divided into twocategories: the close relatives of the inside staff, other close friends and who stealinside information, has nothing to do with the company’s external staff.Corresponding with the former one is U.S. tipper and tippee theory, that behavior"should not get" inside information but use it for self-benefit. Actually, this is transferthe fiduciary duty from inside staff to the information receiver. Corresponding to thelatter one is the U.S. misappropriation theory, the responsibility of the behavior isbased on the "steal" action to get the inside information. Refer to the application ofthe theory in United States,"legitimate, neutral means" access to inside informationbehavior is more appropriate to be punished by administrative sanctions, and need notbe applied for criminal law to regulate.Chapter three mainly analyze and solve the problems in the Article6and Article7of <insider trading criminal judicial interpretation> about five "serious" situationsand four "especially serious" situations. The amount and time of crime set in thestatute are out of touch with the practical operation of justice. For example:"serious"insider trading criteria for judging the amount of crime, even lower than the minimumsecurities exchange deposit requirements; insider trading three times above wouldconstitute "serious", however, it will cause great difficulty for collecting evidence forinvestigating authorities, as well as increase the burden of proof for the publicprosecution services; besides, the fallback provisions are likely to be useless, cannotplay its due role. Recommending refer to the sentencing procedures and standards ofUnited States <Sentencing Guidelines>. For example: the increase in the amount ofthe proceeds of crime as well as the number of victims increased. This sentencingstandard also have applicability in our country, if <Crime of Insider Trading JudicialInterpretation> adopts the number of people involved, involved information securityclassification level, as well as the behavior’s level in the company, the sentencingsituation will have a stronger guiding significance for criminal judicial practice. |
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