| Insider trading has been repeatedly prohibited in China’s securities market.Although there are clear punishment provisions in the law,it is still a difficult problem for the regulatory authorities.On the one hand,the hidden characteristics of insider trading cause the supervision difficulties of the regulatory authorities,resulting in large implementation costs;On the other hand,there are various forms of insider trading,which is easy to cause insiders’ lack of awareness of judging the legal provisions of insider trading and conduct illegal operations.When the insiders are also senior executives of the company,there are also cases of confusion about whether the securities market behavior is insider trading or insider trading,resulting in improper and illegal operations.Insider trading makes the owner of internal information earn excess returns by damaging the rights and interests of ordinary investors,increases the degree of information asymmetry in the market,and intensifies the volatility of stock price and trading volume in the capital market;For enterprises,when the insider trading of senior executives of the company is punished and disclosed by the CSRC,major influential events will be publicly reported by the news media,so that the insider trading event is in an environment that is "perceived" by external shareholders,creditors and other stakeholders.Investors will screen inside information and consider it to be bad information,which will reduce investors’ trust in the company,reduce investors’ credibility and affect the company’s value.This paper,by selecting Xia Chuanwu’s insider trading case announced by the CSRC,specifically explains how insider trading can reduce the evaluation of enterprise development expectations and have a negative impact on the value of the company.At the same time,in order to better put an end to insider trading,after drawing a conclusion,combining the current situation and characteristics of China’s capital market development,we put forward policy recommendations at the company level and regulatory level.The case selected in this paper is the case of Xia Chuanwu’s insider trading of Zhuoyi Technology shares,which is a typical case of violation by senior executives of the company.Xia Chuanwu,the largest shareholder and actual controller of Zhuoyi Technology,is an insider.He sold a large number of shares in sensitive period by using the insider information about the company’s imminent termination of the issuance of shares to purchase assets,resulting in a loss avoidance amount of more than 20 million yuan.The research method mainly adopts the theoretical analysis method and the event research method.The financial indicators distinguish the current development level and future development potential of the enterprise,select the basic earnings per share and the growth rate of net assets per share respectively,and draw the conclusion that insider trading has a negative impact on the enterprise’s development expectations according to the negative trend chart of the financial indicators.In the event study method,the date of the occurrence of insider trading and the date of the announcement of insider trading issued by the CSRC are selected as the event date,and the short-term and long-term impact of the event are compared respectively to analyze the impact of insider trading on the company value.Through the line chart fluctuation of the excess return rate,it is analyzed that insider trading has an impact on the price in the short term,and the impact fluctuation on the date of the insider trading and the announcement date of the CSRC is stronger than that on the date of the issuance of the administrative notice;In the long-term market reaction,insider trading has a negative impact on the company’s value expectations,and the impact of the date of insider trading is greater than the date of the CSRC’s issuance of the administrative announcement.I hope that the conclusions and relevant policy recommendations can help Zhuoyi Technology,many investors in the market,the national securities supervision department and other aspects to improve the governance level of listed companies in China and prevent insider trading in the securities market. |
