Administrative Punishment On China's Securities Lawyers

Unlike Western developed countries,the establishment of Chinese security market is a top-down path,and executive power dominates compared to civil and criminal power.With regard to illegal behaviors in security market,the regulatory authority-China Securities Regulatory Commission(CSRC)-has imposed administrative penalties on the market participants as one of the most important means of penalizing.In recent years,CSRC has continuously intensified supervision and law enforcement,resolutely cracked down on all types of illegal capital-related behaviors in the capital market,and cracked down on chaos in the capital market.It has fully and strictly strengthened administrative penalties in accordance with the laws,regardless of the number of administrative penalties and law enforcement.At the same time,with the improvement of the legal sense,market participants have also begun to use the rights granted by laws actively.Market participants may sue CSRC because of dissatisfaction with administrative penalties,the number of administrative proceedings related to the system of CSRC has reached a record high,and it has also triggered a heated discussion.Administrative penalties can be mainly divided into two parts.What kind of issues should be punished,and what kind of penalties should be imposed onadministrative counterparts.Market participants who are unsatisfied with administrative penalties often defend themselves from these two aspects and believe that they should not be punished-the cause of the punishment is not appropriate,or the punishment for is too heavy-the punishment is unreasonable.The frequent occurrence of administrative litigation can reflect the doubts about the law enforcement of the regulatory agency from market participants.When CSRC issues administrative penalties,the standards it bases on and the administrative level are worth exploring.The range of securities administrative penalties is very wide.From the perspective of illegal behaviors,there are manipulation of the securities market,information disclosure violations,and insider trading.From the perspective of participants,there are issuers,intermediaries,and individual investors.They all have their own characteristics.This article uses the administrative penalty decision issued by CSRC publicly,and chooses the securities lawyers as the research object to analyze the liability allocation of securities lawyers while providing services.And hope to provide some suggestions for the securities lawyers in practice.The first part of this article summarizes the administrative penalties on securities lawyers since 2000(excluding notice of criticism,internal rectification,etc.)imposed by CSRC.Through the study of administrative penalties decisions,we try to analyze the logic of the CSRC to make administrative penalties in practice,the due diligence standards and punishment results.First of all,as for the logic of making penalties,that is,"they do not carry out due diligence + there is a problem in the legal opinions = administrative punishment." The key to make penalties is the judgment of practices of care and diligence,and then based on the illegal facts recorded in the administrative punishment decisions,to sum up the judgment standard of CSRC on due diligence: "quantitative criteria" requires securities lawyers to fully implement relevant laws and regulations.There are no major omissions in the work;"qualitative criteria" requires lawyers to treat different specific works with different level of attention obligation.Finally,in terms of penalties,the CSRC will place securities lawyers on the same level with otherintermediaries,and tend to punish securities lawyers no less than that of securities companies and accountants.The second part is from the academic perspective.Learning from the behavioral standards of directors' diligence obligations,we propose to adopt objective criteria as that for practice of care and diligence of securities lawyers.We also analyze the "professional duty of care" of law professionals and the "general duty of care" of ordinary people towards different types of matters.Taking the current status of the domestic securities market into account,we further point out that it is not appropriate to set too high standards for the securities lawyers currently,and meeting the industry average level is enough.The securities lawyers can't be requested by the CSRC's expert standards.Under the objective criteria,it is also a matter of distinguishing the business of lawyers: at least "general duty of care" shall be applied when securities lawyers review documents from public institutions and other documents;for information from client companies,non-public institutions,and even conflicting data,"professional duty of care" shall be applied when the lawyers make judgment of legal issues.On the other hand,through the comparison of the business status and scope of duties between securities firms,lawyers,accountants and lawyers,an analysis was made of their respective administrative responsibilities.The third part concludes on the basis of the foregoing analysis.From the point of view of the logic to making penalties,the judgment CSRC make on care and due diligent towards securities lawyers is generally reasonable.Except for the certain circumstances in individual cases,inappropriate high standards have been applied to the securities lawyers.From the results of the penalties,the CSRC's penalties for lawyers are almost the same with other intermediaries.It is a little bit heavier for securities lawyers.Further,in view of the historical development of the domestic securities market,the reason why CSRC's penalties on securities lawyers are heavy is that the social responsibility of lawyers has been overemphasized.And the lawyers are considered as an extension of government supervision,but it is necessary to serve the issuers.This is securities lawyers' first duty.The fourth part simply proposes to perfect the administrative penalties as wellas the domestic securities law systems,including the marketization entry,the standardization of practice and the judicial review.