Prosecution standards cast
By Winny Wang |
May 20, 2010, Thursday
|
Print Edition
Print Edition
CHINA has for the first time clarified the prosecution standards covering illegal manipulation of securities and futures markets as it continues to crack down on insider trading and leaking of inside information.
Traders who trade stocks ahead of the announcement of confidential information will be prosecuted if their cumulative trading volume exceeds 500,000 yuan (US$73,000), under the new rules issued by China's Supreme People's Procuratorate and the Ministry of Public Security that took effect on Tuesday.
Those who trade futures will also face government action if their appropriation of margin in insider trading exceeds 300,000 yuan. Investors will also be prosecuted if their benefits top as much as 150,000 yuan from insider trading. According to China's Criminal Law, individuals will be sentenced to jail for as long as 10 years and can be fined as much as five times their illicit gains if they are found guilty of insider trading.
In a previous case, the China Securities Regulatory Commission barred a fund manager, Tang Jian, from working in the country's capital market permanently and fined him 1.5 million yuan after he was found guilty of insider trading.
The new rules also clarify the prosecution standard for the publication of false financial reports and the withholding of important company information.
Those who cost shareholders or creditors more than 500,000 yuan in losses by offering fake financial reports and list ineligible companies by offering false information on their operations, financial results and prospects will be prosecuted.
Huang Guangyu, once the richest person on the Chinese mainland and the founder of GOME Electrical Appliance Holdings, was sentenced to 14 years in prison and fined 600 million yuan on Tuesday after being convicted of insider trading, corporate bribery and illegal business dealings.
Traders who trade stocks ahead of the announcement of confidential information will be prosecuted if their cumulative trading volume exceeds 500,000 yuan (US$73,000), under the new rules issued by China's Supreme People's Procuratorate and the Ministry of Public Security that took effect on Tuesday.
Those who trade futures will also face government action if their appropriation of margin in insider trading exceeds 300,000 yuan. Investors will also be prosecuted if their benefits top as much as 150,000 yuan from insider trading. According to China's Criminal Law, individuals will be sentenced to jail for as long as 10 years and can be fined as much as five times their illicit gains if they are found guilty of insider trading.
In a previous case, the China Securities Regulatory Commission barred a fund manager, Tang Jian, from working in the country's capital market permanently and fined him 1.5 million yuan after he was found guilty of insider trading.
The new rules also clarify the prosecution standard for the publication of false financial reports and the withholding of important company information.
Those who cost shareholders or creditors more than 500,000 yuan in losses by offering fake financial reports and list ineligible companies by offering false information on their operations, financial results and prospects will be prosecuted.
Huang Guangyu, once the richest person on the Chinese mainland and the founder of GOME Electrical Appliance Holdings, was sentenced to 14 years in prison and fined 600 million yuan on Tuesday after being convicted of insider trading, corporate bribery and illegal business dealings.
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