On The Civil Liability For Insider Trading

At present,China’s securities law has undergone four trials for four years,and has passed draft amendment four of the securities law,which will be officially implemented on March 1,2020.The newly revised securities law has made good improvements in investor protection and the containment of securities violations,but it still has reservations about the detailed requirements of the civil liability for insider trading infringement,which also originates from all walks of life in China for a long time Disputes over the realization of the function of civil liability for insider trading.In the 2014 Ever bright Securities civil liability case of insider trading,the court referred to the practice in US law and invoked the determination rules in the judicial interpretation of civil liability for false statements,which caused a lot of controversy.Article 92 of the Second Review of the Revised Draft of the Securities Law of 2017 provided for three times the damages of investors who engaged in reverse securities transactions during insider trading with reference to the judicial interpretation,but the newly approved Fourth Review of the Securities Law Failing to follow this provision,the specific rules for determining civil liability for insider trading still lack theoretical support and legislative deficiencies.There are two levels of civil liability disputes for insider trading: one is the nature of civil liability for insider trading,and the other is the constituent elements of the establishment of civil liability for insider trading.The core is the dispute about the causal relationship between insider trading behavior and investor losses.I believe that insider trading is not only an administrative violation,but also a tort in the securities market,which infringes on investors’ property rights.The establishment of insider trading infringement liability can be tested with the elements of general infringement,and there may be a causal relationship between insider trading behavior and investor losses.Starting from the two stages of causality,first establish the causality on the establishment of responsibility,and the causality on the scope of responsibility is the focus of disputes among all parties.Based on the illegality of insider trading and the protection of investor interests,The application of presumed causality at this stage is in line with the legislative purpose of the securities law,but the scope of investor damages should be strictly limited.On this basis,in order to realize the function of civil liability for insider trading infringement and effectively protect the interests of small and medium-sized investors,a litigation mechanism that facilitates investor lawsuits should be established to reduce the cost of investor rights protection.In order to demonstrate the rationality of the above-mentioned viewpoints and recommendations,this article focuses on the causal relationship between insider trading behavior and investor losses.On the one hand,it discusses the rationality of civil liability for insider trading,on the other hand,determines the scope of the subject of civil compensation claims.Provide theoretical support.On the basis of this,the construction of civil liability system in China’s securities market is improved.Finally,based on the consideration of judicial efficiency,it provides suggestions for the improvement of insider trading civil litigation system.It is discussed in detail from the following four parts:The first chapter mainly reviews the judicial status and legislative status of civil liability for insider trading in securities,and analyzes the reasons for the stagnation of the civil liability system for insider trading and the theoretical disputes behind it.The second chapter demonstrates the causal relationship between insider trading behavior and investor’s interests damage.This stage is also called the causality on the establishment of liability.This chapter first examines the development of the theory of insider trading regulation,and analyzes what kind of breach of the insider’s accountability comes from the breach of obligations,and what kind of violations of investors’ legitimate interests are hidden behind this.Chapter 3 analyzes the causal relationship between insider trading behavior of insiders and the infringement of investors’ trust interests in the securities market,explains the necessity of inferring causality based on the particularity of securities market transactions,and how to establish the right to sue civil compensation for insider trading Subject and specific scope of compensation.The fourth chapter analyzes the areas that need to be improved in civil compensation infringement litigation in China’s securities market,and gives suggestions.