Securities manipulation is a serious violation of the law and requires strict punishment. So how will individuals and organizations that violate and cause heavy losses to other securities investors be punished according to Vietnam’s regulations?
Article table of contents
1. What is manipulation of the securities market?
Manipulation of securities market refers to intentional acts of influencing the market by applying the laws of supply and demand or other artificial acts to influence stock prices.
2. Transactions manipulating securities market
According to Clause 2 Article 70 of Decree No. 58/2012/ND-CP of Vietnam’s Government, these acts include:
- Using one or more of their trading accounts or of others or colluding with each other to constantly buy and sell securities in order to create false supply and demand;
- A person or group of people who collude with each other to place sale and purchase order of the same securities in the same trading day or collude with each other to carry out the trading of securities without actual transfer of ownership or the ownership just switches between team members to create false securities prices and supply and demand;
- Continuously buying and selling securities with the dominant volume at the time of opening or closing of the market in order to create the new rate of opening and closing price for that type of securities on the market.
- Trading of securities in the form of colluding and inducing others to continuously place sale and purchase order of securities remarkably influencing supply and demand and securities price and manipulating securities price.
- Giving opinion directly or indirectly through the mass media about a type of securities, issuer of securities in order to influence the price of such securities after carrying out the trading and holding position for such type of securities;
- Using the methods or performing other trading to create false supply and demand and manipulate securities prices.
3. Sanctions for manipulating securities market
- Administrative sanction: According to Clause 36 Article 1 of Decree No. 145/2016/ND-CP of Vietnam’s Government:
A fine of from VND 1,000,000,000 to VND 1,200,000,000 shall be imposed for conducting transactions to corner the securities market but is not liable to criminal prosecution.
- Criminal sanction: Violating individuals and organizations may be prosecuted for criminal liability for the crime "manipulation of securities market" specified in Article 211 of the Criminal Code 2015 of Vietnam, specifically as follows:
+ In case a person commits this offence: A person who deliberately commits the crime "manipulation of securities market" 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.
This offense 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 offense 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.
+ In case a corporate legal entity commits this offense: A corporate legal entity that commits this offense shall be liable to a fine of from VND 2,000,000,000 to VND 5,000,000,000, shall be permanently shut down and 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.
Above are all sanctions for securities manipulation. However, this penalty is still quite light compared to the amount of illegal profits that the violator has earned, so it is necessary to increase the penalty even stronger. In addition, it is necessary to promote propaganda and dissemination of investment knowledge and laws to the market to help make the market healthier and genuine investors better protected.
Legal basis:
Nguyen Phu
- Key word:
- Decree No. 145/2016/ND-CP
- Criminal Code 2015
