Case Concerning Insider Trading of Jiang XX
(SPP Guiding Case No. 221)
Key words
Insider information; Sensitive period for insider information; Scope of insider personnel; Illegal gains
Summary
The determination of insider information shall be made in accordance with Article 52 (1) of the Securities Law of the People's Republic of China, by assessing both whether the information "has a significant impact on the market price of the relevant securities" and whether it "has not been made public". Information not expressly listed as a major event in the Securities Law may still be recognized as insider information if it meets these two criteria. When identifying the scope of insider personnel, in addition to examining whether the individual holds a specific position or status, emphasis shall be placed on the circumstances under which insider information was obtained. Any person who acquires insider information through lawful channels shall, in accordance with the law, be regarded as insider personnel. The amount of loss avoided by selling securities in advance through the use of insider information shall be regarded as illegal gains. As a general principle, such gains shall be calculated based on the closing price on the day when the limit-down price restriction is lifted after the information becomes public; where no limit-down occurs, the calculation shall be based on the closing price on the first trading day after the resumption of trading.
Relevant provisions
Article 180 of the Criminal Law of the People's Republic of China
Articles 67, 74, and 75 of the Securities Law of the People's Republic of China (Rev. 2014) (now Articles 51, 52, 80, 81 of the Securities Law of the People's Republic of China)
Articles 1, 5, 7, and 10 of the Interpretation of the Supreme People's Court and the Supreme People's Procuratorate on Several Issues Concerning the Specific Application of Law in the Handling of Criminal Cases of Engaging in Insider Trading or Leaking Insider Information (Interpretation No. 6 (2012) of the Supreme People's Court)
