Will the person who is prosecuted for manipulation of securities market be suspended from law practice in Vietnam?
What is manipulation of securities market in Vietnam?
According to Clause 2, Article 3 of Decree No. 156/2020/ND-CP, “manipulation of securities market” means the commission of the prohibited act related to securities and securities market, including one, some or all of the following acts:
- Using one or several accounts of oneself or another person, or colluding with another person to continuously buy and sell securities in order to create artificial demand or supply;
- Placing orders to buy and sell the same type of securities within the same trading day or colluding with another person to buy and sell securities without actual transfer of ownership or with the ownership transferred within the group in order to create artificial demand and supply;
- Continuously buying or selling securities with a controlling quantity at the opening or closing time of the market in order to create a new closing or opening price for such type of securities on the market;
- Trading securities by colluding with or persuading another person to continuously place securities purchase and sale orders to remarkably affect the demand, supply and prices of securities, or manipulate securities prices;
- Offering opinions whether directly or via the mass media about a type of securities or securities issuer in order to affect the price of that type of securities after conducting a transaction and holding the position of that type of securities;
- Using other methods or committing other trading acts, with or without providing false information, to create artificial demand and supply or manipulate securities prices.
Will the person who is prosecuted for manipulation of securities market be suspended from law practice in Vietnam?
How does the criminal law regulate manipulation of securities market in Vietnam?
The manipulation of securities market is clearly defined in Article 211 of the 2015 Criminal Code of Vietnam as follows:
Manipulation of securities market in Vietnam
1. A person who deliberately commits any of the following acts and earns a profit of from VND 500,000,000 to under VND 1,500,000,000 or causes a loss to investors of from VND 1,000,000,000 to under VND 3,000,000,000 shall be liable to a fine of from VND 500,000,000 to VND 2,000,000,000 or face a penalty of 06 - 36 months' imprisonment:
a) Using one or multiple accounts of the offender or another person or colluding with another person, to continuously buying and selling securities in order to create false demand and supply;
b) Colluding with another person to place orders for purchase and sale of the same type of securities within the day or selling and buying securities without actual transfer of ownership or ownership is only transferred within the group in order to create false demand and supply;
c) Continuously buying or selling securities with a controlling quantity at the opening or closing time of the market in order to create a new closing price or opening price for such type of securities on the market;
d) Trading securities by colluding with another person or persuade another person to continuously place securities purchase and sale orders to remarkably affect the demand, supply and securities prices or manipulate securities prices;
dd) Offer opinions whether directly or via the media about a type of securities or securities issuer in order to affect the price of that type of securities after a transaction has been made in order to have an advantage from it.
e) Using other methods or commit other acts to create false demand and supply in order to manipulate securities prices.
2. This offence committed in any of the following circumstances carries a fine of from VND 2,000,000,000 to VND 4,000,000,000 or a penalty of 02 - 07 years' imprisonment:
a) The offence is committed by an organized group;
b) The illegal profit reaped is ≥ VND 1,500,000,000;
c) The loss incurred by investors is ≥ VND 3,000,000,000;
d) Dangerous recidivism.
3. The offender might also be liable to a fine of from VND 50,000,000 to VND 250,000,000, be prohibited from holding certain positions or doing certain works for 01 - 05 years.
4. Punishments incurred by a corporate legal entity that commits any of the offences specified in this Article:
a) A corporate legal entity that commits this offence in any of the circumstances specified in Clause 1 of this Article shall be liable to a fine of from VND 2,000,000,000 to VND 5,000,000,000;
b) A corporate legal entity that commits this offence in the circumstances specified in Clause 2 of this Article shall be liable to fine of from VND 5,000,000,000 to VND 10,000,000,000;
c) A corporate legal entity that commits this offence in any of the circumstances specified in Article 79 hereof shall be permanently shut down;
d) The violating corporate legal entity might also be liable to a fine of from VND 500,000,000 to VND 2,000,000,000, be banned from operating in certain fields or raising capital for 01 - 03 years.
Thus, manipulation of securities market is an act of a person who violates the law on securities market management for the purpose of gaining illicit profits. The penalty for this crime is as follows:
- A person who deliberately commits any of the following acts and earns a profit of from VND 500,000,000 to under VND 1,500,000,000 or causes a loss to investors of from VND 1,000,000,000 to under VND 3,000,000,000 shall be liable to a fine of from VND 500,000,000 to VND 2,000,000,000 or face a penalty of 06 - 36 months' imprisonment:
+ Using one or multiple accounts of the offender or another person or colluding with another person, to continuously buying and selling securities in order to create false demand and supply;
+ Colluding with another person to place orders for purchase and sale of the same type of securities within the day or selling and buying securities without actual transfer of ownership or ownership is only transferred within the group in order to create false demand and supply;
+ Continuously buying or selling securities with a controlling quantity at the opening or closing time of the market in order to create a new closing price or opening price for such type of securities on the market;
+ Trading securities by colluding with another person or persuade another person to continuously place securities purchase and sale orders to remarkably affect the demand, supply and securities prices or manipulate securities prices;
+ Offer opinions whether directly or via the media about a type of securities or securities issuer in order to affect the price of that type of securities after a transaction has been made in order to have an advantage from it.
+ Using other methods or commit other acts to create false demand and supply in order to manipulate securities prices.
- This offence committed in any of the following circumstances carries a fine of from VND 2,000,000,000 to VND 4,000,000,000 or a penalty of 02 - 07 years' imprisonment:
+ The offence is committed by an organized group;
+ The illegal profit reaped is ≥ VND 1,500,000,000;
+ The loss incurred by investors is ≥ VND 3,000,000,000;
+ Dangerous recidivism.
- The offender might also be liable to a fine of from VND 50,000,000 to VND 250,000,000, be prohibited from holding certain positions or doing certain works for 01 - 05 years.
- Punishments incurred by a corporate legal entity that commits any of the offences specified in this Article:
+ A corporate legal entity that commits this offence in any of the circumstances specified in Clause 1 of this Article shall be liable to a fine of from VND 2,000,000,000 to VND 5,000,000,000;
+ A corporate legal entity that commits this offence in the circumstances specified in Clause 2 of this Article shall be liable to fine of from VND 5,000,000,000 to VND 10,000,000,000;
+ A corporate legal entity that commits this offence in any of the circumstances specified in Article 79 hereof shall be permanently shut down;
+ The violating corporate legal entity might also be liable to a fine of from VND 500,000,000 to VND 2,000,000,000, be banned from operating in certain fields or raising capital for 01 - 03 years.
Will the person who is prosecuted for manipulation of securities market be suspended from law practice in Vietnam?
According to the provisions of Clause 1, Article 5 of the 2006 Law on Lawyers in Vietnam (amended by Clause 37, Article 1 of the 2012 Law Amending and Supplementing a number of articles of the Law on Lawyers), the principles for law practice are as follows:
Principles for law practice
1. Observance of the Constitution and law.
2. Observance of the code of ethics and professional manners of Vietnamese lawyers.
3. Independence, honesty and respect for objective truths.
4. Use of lawful measures for the best protection of clients' legitimate rights and interests.
5. Accountability before law for law-practicing activities.
According to the above provisions, one of the priority principles in the process of practicing law is observance of the Constitution and law.
At the same time, in Article 10 of the 2006 Law on Lawyers in Vietnam and Article 11 of the 2006 Law on Lawyers in Vietnam, on standards and conditions for practicing law, the person prosecuted for manipulating the stock market is a person who violates the law. If the accused is prosecuted by the investigative police agency of the Ministry of Public Security, he/she shall be temporarily suspended from practicing law according to the provisions of Article 42 of the Charter promulgated together with Decision No. 856/QD-TTg in 2022 as follows:
Discipline towards lawyers and law-practicing trainees
1. The lawyer has violated the provisions of the law on lawyers, the Charter of the Vietnam Bar Federation, the Regulations of the Bar Association, the Code of Ethics and professional conduct of Vietnamese lawyers and other regulations. According to other regulations of the Vietnam Bar Federation and the Bar Association, depending on the nature and seriousness of the violation, they shall be disciplined in one of the following forms:
a) Reprimand;
b) Warning;
c) Temporarily suspend the membership of the Bar Association from 06 months to 24 months;
d) Deletion from the list of lawyers of the Bar Association, including cases where names are automatically deleted according to the provisions of Clause 3 of this Article.
...
3. A lawyer who falls into one of the following cases will automatically be disciplined by the Bar Association's Board of Directors by removing his/her name from the list of lawyers of the Bar Association without having to follow disciplinary procedures as prescribed in Clause 5 of this Article:
a) The law practice certificate is revoked in the cases specified at Points h and i, Clause 1, Article 18 of the Law on Lawyers;
b) 18 months without paying the membership fee of the Vietnam Bar Federation or the membership fee of the Bar Association.
Thus, when the person being prosecuted for manipulating the securities market falls under the case of temporary suspension of his law practice status.
In case of being convicted and the judgment has taken legal effect, the law practice certificate will automatically be revoked by removing the name from the list of lawyers.
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