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The crime of insider trading and divulging inside information refers to persons who know the inside information of securities and futures transactions or those who illegally obtain inside information of securities and futures transactions, when they are involved in the issuance of securities, securities, futures trading, or other factors that have influence on the prices of securities and futures transactions. Before the information with significant impact is made public, buying or selling the securities, or engaging in futures trading related to the inside information, or divulging the information, or expressing or implying that others are engaged in the above-mentioned trading activities, the circumstances are serious.

Separately the author intends to introduce insider trading, the elements of the crime of divulging insider information and the main points of defense, prosecution standards, the relationship with the administrative illegal act of insider trading, and the relationship with the crime of trading using undisclosed information, etc. This article is a series of articles on the crime of insider trading. The first article introduces the main elements of the constitutional elements of the crime.

The subject of the crime of insider trading and the crime of divulging inside information is the insider of inside information or the person who illegally obtains inside information:

01Insider of inside information

Insiders of inside information refer to persons who can directly contact or obtain inside information based on their position, business, etc. The specific legal provisions are as follows:

According to Article 51 of the Securities Law, insiders of inside information on securities transactions include: (1) the issuer and its directors, supervisors, and senior management; (2) shareholders who hold more than 5% of the company’s shares and its directors, supervisors and senior management personnel, the actual controller of the company and its directors, supervisors and senior management personnel; (3) Companies controlled or actually controlled by the issuer and their directors, supervisors, and senior managers; (4) Persons who can obtain inside information about the company due to their position in the company or because of business dealings with the company; (5) Acquirers or major asset transactions of listed companies and their controlling shareholders, actual controllers, directors, supervisors and senior management personnel; (6) Securities trading venues, securities companies, and securities registries that can obtain inside information due to their positions and work Relevant personnel of settlement institutions and securities service institutions; 6) Relevant personnel of securities trading venues, securities companies, securities registration and clearing institutions, and securities service institutions who can obtain inside information due to their duties and work; (7) Staff members of securities regulatory agencies who can obtain inside information due to their duties and work; (8) Staff members of relevant competent authorities and regulatory agencies who can obtain inside information for the management of securities issuance, trading, or the management of listed companies and their acquisitions, and major asset transactions due to their statutory duties; And other people who can obtain inside information.

According to “Article 81 of the Regulations on the Administration of Futures Trading”, the insider of inside information refers to persons who are able to contact or obtain inside information due to their managerial, supervisory or professional status, or perform their duties as employees or professional consultants. Including: managers of futures exchanges and other practitioners who can obtain inside information due to their positions, staff of the futures regulatory agency of the State Council and other relevant departments, and other personnel specified by the futures regulatory agency of the State Council.

It should be noted that although the perpetrator is a person within the scope of insider information prescribed by laws and regulations, the public prosecution agency still needs to prove that the perpetrator actually contacted or obtained the inside information. That is, although the perpetrator is within the scope of insider information as specified above, if there is no solid and sufficient evidence to prove that the perpetrator actually came into contact with the inside information, or there is evidence that the perpetrator did not know the inside information, the perpetrator cannot be identified a crime of insider trading. In judicial practice, public prosecutors usually determine whether they are insiders with insider information based on the confirmation letter, documentary evidence, and relevant witness testimony issued by the China Securities Regulatory Commission. What needs to be noted in the defense practice is that for the confirmation letter of the China Securities Regulatory Commission, the defender can express a defense opinion from the confirmation process, method and materials used in the confirmation letter.

In addition, according to the relevant provisions of the “Criminal Law”, the unit can also be convicted of the crime. Regarding unit crimes, we should judge whether the unit is true and legal, whether it is an act under the control of the unit's overall will, whether it is in the name of the unit, and whether it seeks benefits for the unit.

02People who illegally obtain inside information

A person who illegally obtains inside information refers to a person who obtains inside information from an insider. Compared with an insider, a person who illegally obtains inside information obtains inside information through indirect means. The specific legal provisions are as follows:

According to Article 2 of the “Interpretation on Several Issues Concerning the Specific Application of Law in Criminal Cases of Handling Insider Trading and Leaking Inside Information” (hereinafter referred to as “Judicial Interpretation of Insider Trading”), persons with the following behaviors shall be deemed as the 100th "Personnel who illegally obtain inside information on securities and futures trading" as stipulated in the first paragraph of Article 80: (1) Obtaining inside information by means of stealing, defrauding, arbitrage, wiretapping, lure, spying, or private transactions; (2) The close relatives of the person who knows the insider information or other persons who are closely related to the person who knows the insider information engage in or express or imply that others do it during the sensitive period of the insider information, or disclose the inside information and cause others to engage in the insider information-related activities Securities and futures transactions, the relevant transaction behavior is obviously abnormal, and there is no legitimate reason or legitimate information source; (3) During the sensitive period of insider information, contact or contact with insider information insiders, engage in or express or imply others to engage in it, or disclose inside information to cause others to engage in securities and futures transactions related to the insider information, and the relevant trading behavior is obviously abnormal , And there is no legitimate reason or legitimate information source.

Zhao Zenghai

Excellent Builder of the Cause of Socialism with Chinese Characteristics; Outstanding Party Member of the Beijing Lawyer Industry;

Top 10 Young Political and Legal Workers;

Top 10 Famous Lawyers in China;

The National Lawyer Industry Pioneers and Strives to Give Priority to Individuals;

Winner of the Capital Labor Medal;

Director of Beijing Excellent Law Firm;

The Best Managing Partner of the Year.

Social Positions

Party branch secretary/director/founding partner of JAVY Law Firm;

The current vice president of Beijing Lawyers Association;

The 10th Vice President of the Beijing Lawyers Association/Party Committee Member/Director of the Ideological and Ethical Work Committee;

Chairman/Deputy Secretary of the Party Committee of the First Beijing Chaoyang District Lawyers Association;

Representative of the 15th Beijing Chaoyang District People's Congress;

Member of the 11th and 12th Fujian Provincial Committee of the Chinese People's Political Consultative Conference;

China Righteous and Brave as the legal advisor of the Foundation;

Adjunct Professor of Law School of China University of Political Science and Law; Part-time Professor of Law School of Renmin University of China;

Distinguished Professor of National Lawyers College;

Experts in Government Procurement Review by Central Government Units;

Contract Review Expert of the State Administration for Market Regulation (formerly the State Administration for Industry and Commerce);

Legislative Consulting Expert of the Standing Committee of the Beijing Municipal    People's Congress;

Executive Vice President of Beijing Fujian Enterprise Chamber of Commerce.

Monographs

"Running to the Growth Enterprise Market", "Shareholders' Rights", "Forbidden Zone: Legal Boundaries of the Securities Market", "Legal Practices of Modern Enterprise Property Rights Transactions", "Cutting off Risks: How Entrepreneurs Prevent Huge Losses", "Practices of Bidding and Bidding Operations"

Statement:

 This article was originally created by the lawyers of JAVY Law Firm. It only represents the author’s own personal views and should not be regarded as a formal legal opinion or suggestions issued by JAVY Law Firm or its lawyers. If you need to reprint or quote any contents in this article, please indicate the source.