Research On The Civil Liability Of Using Undisclosed Information To Trade

Using undisclosed information to trade is an illegal act that often occurs in the securities market.The regulation on using undisclosed information to trade in China is mostly concentrated in criminal penalties and administrative penalties issued by the China Securities Regulatory Commission,and the civil liability system needs to be improved urgently.Article 54 of the "Securities Law" stipulates for the first time the civil liability of investors who use undisclosed information for transactions.This paper takes the civil liability of using undisclosed information to trade as the research object and conducts relevant research.This paper first analyzes the composition of using undisclosed information to trade,and focuses on the identification of undisclosed information.By defining the concept and scope of undisclosed information,it is distinguished from inside information.The paper then sort out the relevant laws and regulations,analyze the characteristics of the current legal regulations on using undisclosed information to trade,and clarify the necessity of civil liability.In the definition of the nature of civil liability,by analysis of the subject,the object of compensation and the behavior,it is more reasonable to deny the nature of the liability for breach of contract and identify it as tort liability.In terms of attribution principles,the principle of fault is determined as the principle of attribution for transactions using undisclosed information.At the same time,due to the particularity of the securities market and the concealment of transactions using undisclosed information,based on the protection of investors’ rights and interests,the presumption of fault should be applied.For the establishment of civil liability for using undisclosed information to trade,in the theoretical basis part,in view of the current theoretical disputes,the applicability of insider trading related theories for reference is firstly analyzed.By analyzing the legislative purpose of the two to clarify the institutional differences,and by analyzing the core nature of the behavior,it is determined that the two have commonalities.Therefore,some theories of insider trading can be applied to using undisclosed information to trade.By analyzing the relevant theories,it is concluded that the anti-fraud theory is not suitable for reference,while the securities market integrity theory has applicability.On this basis,it further proposes asymmetric information theory and fair trade theory to justify civil liability for using undisclosed information to trade.The third part makes an empirical analysis through the status quo of legal provisions and judicial judgment,and expounds the applicable dilemma of the civil liability of using undisclosed information to trade.Based on the current "Securities Law",this paper reviewed the "Oolong Finger" civil compensation case of Everbright Securities,a well-known case in the securities market,and pointed out that it is more reasonable to identify the nature of the information in the case as undisclosed information,while the nature of the behavior should be identified as using undisclosed information to trade of the relevant responsible person.Based on the characteristics of legal regulation and case adjudication,it is concluded that the civil liability dilemma of using undisclosed information to trade includes three parts,which are that compensation objects is not clear,the definition of causality is blocked,and the compensation standards are not clear.In the fourth part,aiming at the civil liability dilemma obtained in the third part,this paper puts forward some suggestions for improving the civil liability system of using undisclosed information to trade.In terms of the identification of the claimant of compensation,the claimant of compensation is defined as an investor who suffers from using undisclosed information to trade while doing reverse trading;In the identification of causality,the establishment of the causal relationship under the fair trade theory is demonstrated,and then it is proposed to establish a rule of presumption of causality under the theory of fair trade;In terms of compensation standards,the scope of civil compensation for using undisclosed information to trade is based on the principle of compensation for investors,and the actual income of the person should be determined as the upper limit of compensation.The method of price difference calculation is adopted to clarify the calculation of the amount of civil compensation for the claimant.