On Civil Liability Of Securities Insider Trading

With the transformation of our economy to high quality,the development of our securities market has become more and more stable.In order to adapt to the development of the securities market,the state has revised the Securities Law.However,there are still deficiencies in the regulation of insider trading.As studied in this paper,the civil liability for insider trading is too general in the current Securities Law in our country,which leads to small and medium-sized investors even if they are harmed by the behavior of insider trading.It is also difficult to obtain due compensation by pursuing civil liability.Therefore,it is very important to perfect the investigation method of civil liability for insider trading.In our country,the crime of insider trading is stipulated in the criminal law,and the relevant punishment rules are also stipulated in the administrative law,but there is no detailed regulation on the issue of civil compensation,this causes our country investor to suffer the loss after encountering the inside trade behavior but very difficult to obtain the civil compensation.There are many difficulties in the implementation of civil liability for insider trading.First of all,our country has different views on the nature of civil liability for insider trading,which includes liability for breach of contract,liability for tort and special liability for tort.Secondly,it is difficult to define the claimant.The United States adopts the principle of“Simultaneous transaction”,while Taiwan of our country adopts the principle of“Reverse transaction”.In our country,the law only stipulates that the investors who have suffered losses due to insider trading can claim compensation,but it does not directly stipulate which principle to determine the claimant.In addition,in judicial practice,it can be very clear that“Types of investment”,“Investment direction”,“Trading time” and other factors directly affect the determination of the claimant.Third,it is difficult to prove causality.As we all know,causality includes transaction causality and loss causality,and transaction causality needs to prove that there is a causal relationship between investor’s loss and insider trading,loss causality requires proving to what extent insider trading causes investors to lose money,but because today’s securities trading is not a face-to-face physical transaction,it is internet transactions based on computer networks,so causality is hard to prove.Finally,it is difficult to determine the amount and standard of civil compensation for insider trading.In our judicial practice,there is no relevant judicial interpretation,so the standard of compensation is inconsistent.Therefore,in this paper,the start and end time of simultaneous trading is first identified as the start and end time of insider trading in the morning,and it is determined that the investor who has the right to claim is the investor who conducts reverse trading at the same time as insider trading.Secondly,the infringement object of insider trading behavior is set as the right of fair trading,so as to identify the trading causality and determine the loss causality through quantitative analysis.Finally,the scope of damages is limited to the spread loss,which is calculated based on the average closing price of 30 days after the disclosure of inside information.