What is manipulation of securities market in Vietnam? How many years of imprisonment for a person who deliberately commits manipulation of securities market in Vietnam?

What is manipulation of securities market in Vietnam? 

In Clause 2, Article 3 of Decree 156/2020/ND-CP, there are regulations on manipulation of securities market as follows:

2. “manipulation of securities market” means the commission of the prohibited act related to securities and securities market prescribed in Clause 3 Article 12 of the Law on Securities, including one, some or all of the following acts:

a) 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;

b) 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;

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 or opening price for such type of securities on the market;

d) 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;

dd) 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;

e) Using other methods or committing other trading acts, with or without providing false information, to create artificial demand and supply or manipulate securities prices.

What is manipulation of securities market in Vietnam? How many years of imprisonment for a person who deliberately commits manipulation of securities market in Vietnam? (Image from the Internet)

How many years of imprisonment for a person who deliberately commits manipulation of securities market in Vietnam?

Article 211 of the 2015 Criminal Code stipulates manipulation of securities market as follows:

Manipulation of securities market

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, individuals who commit acts of manipulation of securities market may be fined from 500,000,000 VND to 4,000,000,000 VND or imprisoned from 06 months to 07 years. Depending on the level and nature of the violation, the Court will impose the final penalty in Vietnam.

In addition, offenders of manipulation of securities market may also be fined from 50,000,000 VND to 250,000,000 VND, banned from holding certain positions, practicing certain professions or doing certain jobs for 01 to 05 years in Vietnam. 

How much is fine for a person who deliberately commits manipulation of securities market in Vietnam?

In Article 36 of Decree 156/2020/ND-CP amended by Clause 30, Article 1 of Decree 128/2021/ND-CP, regulations on violations of manipulation of securities market are as follows:

Manipulation of securities market

1. A fine that is 10 times the illegal gain but is not lower than the maximum fine specified in Point b Clause 3 Article 5 of this Decree shall be imposed for manipulating securities market. If the illegal gain cannot be determined or the fine calculated according to the illegal gain is smaller than the maximum fine specified in Point b Clause 3 Article 5 of this Decree, the maximum fine specified in Point b Clause 3 Article 5 of this Decree shall be imposed.

2. Additional penalties:

a) Securities activities and securities services of securities company, securities investment fund management company, or branch of foreign securities company or foreign fund management company in Vietnam shall be suspended for a period of 01 - 03 months in case of commission of the violation in Clause 1 of this Article;

b) Securities professional certificate shall be suspended for a period of 18 - 24 months if the certified securities professional commits the violation in Clause 1 of this Article.

3. Remedial measure:

The violating entity is compelled to return the revenue illegally obtained from the commission of one of the violation in Clause 1 of this Article.

At Point c, Clause 3, Article 5 of Decree 156/2020/ND-CP, amended by Clause 4, Article 1 of Decree 128/2021/ND-CP, it is stipulated as follows:

 Penalty imposition rules

...

3. Rules for determination of fines:

....

b) The maximum fine for other securities-related violations shall be VND 3.000.000.000 if committed by an organization or VND 1.500.000.000 if committed by an individual;

c) The fines prescribed in Chapter II of this Decree are imposed upon violating organizations, except the cases in Clauses 3, 4 and 5 Article 15 and Clause 2 Article 30 of this Decree in which the fines are imposed upon individuals, and the cases in Clause 3 and Clause 5 Article 39 of this Decree in which both fines impose upon organizations and those impose upon individuals are specified. The fine imposed upon an individual shall be a half of the fine imposed upon an organization for committing the same violation.

...

Thus, individuals who manipulate the stock market can be fined 10 times the amount of illegal income but must be lower than the maximum fine of 1,500,000,000 VND in Vietnam.

In case there is no illegal revenue or the penalty calculated based on illegal revenue is lower than 1,500,000,000 VND, a fine of 1,500,000,000 VND will be applied in Vietnam.

In addition, there are additional penalties for manipulating the stock market in Vietnam as follows:

- Suspension of securities business and service activities for a period of 01 month to 03 months for securities companies, securities investment fund management companies, securities company branches or fund management companies foreigners in Vietnam.

- Revocation of the right to use securities practice certificates for a period of 18 to 24 months for securities practitioners

In cases of sanctions in Vietnam, remedial measures must also be taken, which is to force the return of illegally obtained income.

Best regards!