Research On The Problem Of Insider Trading And The Disclosure Of Insider Information Crimes

The securities market in China has developed rapidly since its establishment and has become an important part of the socialist market economy. However, the securities market is still emerging market, market self-regulatory mechanism is imperfect, laws and regulations are not fully developed, which lead to a variety of securities crimes.The behavior of insider trading and leaking inside information is one of them. It is a consensus that the behavior of insider trading and leaking inside information damage the order of securities market and the interests of investors. The breed and spread of the behavior greatly endanger the healthy operation and development of the securities market. To strengthen the regulation on the crime of insider trading and leaking inside information, it has been amended to criminal law in 1997, moreover, the first judicial interpretation of this crime issued by Supreme People's Court and Supreme People's Procuratorate in 2012. Unfortunately, the current judicial situation is contrary to the original intention of law, the rigor of criminal law network did not achieve the desired effect. There has been a sudden explosion in the crime in the recent years. Based on the judicial judgments, this paper combs features and causes of this crime and analyzes controversial problems in judicial cognizance. This paper is composed of four parts.Chapter 1: the empirical analysis on the current judicial situation on the crime of insider trading and leaking inside information. The subject, types of inside information and illegal income are included in analysis of illegal characteristics. The place of the trial, the level of the trial, the period of punishment and the scale of punishment are included in analysis of characteristics of the trial. Furthermore, this part analyzes the causes of this crime from offender and criminal judicature. Last, it points out the practical problems in the judicial application, including the standard of the inside information, the standard of the objective behavior, the cognizance of circumstances of the crime, especially the recognition of the illegal income.Chapter 2: the cognizance of inside information. Inside information should be identified from both sides of quantity and quality, insisting nature of materiality and non-public. The identification of the materiality of inside information should adhere to the criteria of rational investors and put forward specific quantitative factors. The identification of the nature of nonpublic needs to rely on the disclosure of inside information, it should adhere to the principle of form public standard and use substance public standard as an exception. In addition, the relevance and accuracy of inside information do not have independent value, should be taken into consideration along with materiality.Chapter 3: the cognizance of the objective behavior. Firstly, we should insist on the use of inside information which can be proved by the legal presumption. Se condly,inside information leaked by non-statutory insiders can be set up to the crime of leaking inside information. Thirdly,the act of expressing and implying is equivalent to the act of advising in securities law, which belongs to trading behavior, is different from leaking inside information. Lastly, negative act of trading activities cannot lead to the establishment of this crime.Chapter 4: the cognizance of circumstances of the crime. The existing standard of sentencing in our country is too low and unpractical, which nee ds to be optimized. We should raise the standard of the establishment of the crime and provide practical standard with the behavioral content and behavioral results. In the case of the determination of the illegal income, if the settlement price has appropriate causal relationship with the economic value of the inside information, the actual income method shall be adopted and the illegal gains shall be calculated on the basis of the settlement price. When the perpetrator has not yet closed the position, the book proceeds shall be adopted and the illegal proceeds shall be determined on the basis of the average closing price of ten trading days after the disclosure of the inside information.