Stocks are increasingly becoming an investment channel that attracts many people. Taking advantage of this, a number of individuals and organizations have committed illegal acts in the stock market for profit, one of which is manipulating the stock market. So what exactly is the act of manipulating the stock market and how is it sanctioned?
Article table of contents
What is stock market manipulation? Penalized how? (Illustration)
1. What is stock market manipulation?
According to Clause 3, Article 12 of the Securities Law 2019 , stock market manipulation is one of the prohibited acts in securities and securities market activities, specifically:
Article 12. Prohibited acts in securities and securities market activities
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3. Using one or more trading accounts of one's own or another's or colluding to buy and sell securities in order to create artificial supply and demand; trading securities in the form of colluding, enticing others to buy and sell in order to manipulate securities prices; combine or use other trading methods or combine spreading false rumors, providing false information to the public to manipulate securities prices.
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In addition, in Clause 2, Article 3 of Decree 156/2020/ND-CP , it is also clear that “Stock market manipulation” is the practice of prohibited acts in securities and securities market activities. specified in Clause 3, Article 12 of the Law on Securities , including one, some or all of the following acts:
- Using one or more trading accounts of their own or of others or colluding to continuously buy and sell securities in order to create artificial supply and demand;
- Placing buy and sell orders of the same securities on the same trading day or colluding with each other to buy and sell securities without actual transfer of ownership or ownership rights only circulating between members in the transaction. groups to create securities prices, artificial supply and demand;
- Continuously buying or selling securities with a dominant volume at the opening or closing of the market in order to create a new closing or opening price for that type of security in the market;
- Trading securities in the form of collusion, enticing other people to continuously place buy and sell orders for securities, greatly affecting supply and demand and stock prices, manipulating securities prices;
- Giving opinions directly or indirectly through the mass media about a type of security or the issuer of a security in order to influence the price of that type of security after the transaction has been made. trade and hold positions for such securities;
- Using methods or performing other trading acts or combining spreading false rumors, providing false information to the public to create artificial supply and demand, and manipulate securities prices.
2. How is stock market manipulation sanctioned?
2.1 Administrative sanctions
Individuals or organizations that have acts of manipulating the stock market but not to the extent of criminal prosecution shall be administratively sanctioned according to the provisions of Article 36 of Decree 156/2020/ND-CP as amended by Clause 30. Article 1 of Decree 128/2021/ND-CP , specifically:
* Monetary fine:
A fine of 10 times the illegal revenue but not less than 3,000,000,000 VND for organizations, 1,500,000,000 VND for individuals;
In case there is no illegal revenue or the fine calculated according to the illegal revenue is lower than 3,000,000,000 VND for organizations, 1,500,000,000 VND for individuals, a fine of 3,000,000,000 VND will be applied. VND for organizations, VND 1,500,000,000 for individuals.
* Additional sanction:
- Suspension of securities business and service activities for a period of 01 - 03 months for securities companies, securities investment fund management companies, branches of securities companies or water fund management companies. foreigners in Vietnam commit the above violations;
- Deprivation of the right to use securities practice certificates for a term of 18-24 months for securities practitioners who commit violations.
* Remedy: Forced to pay back illegal revenue obtained from committing violations.
2.2 Criminal handling
Commercial individuals and legal entities that commit acts of manipulating the stock market may be examined for penal liability for manipulating the securities market according to the provisions of Article 211 of the Penal Code , specifically:
* In case individuals commit crimes:
- Those who commit one of the acts specified in Section 1 and earn an illegal profit of between VND 500,000,000 and under VND 1,500,000,000 or cause damage to the investor from VND 1,000,000,000 to under VND 3,000,000,000, be subject to a fine of from VND 500,000,000 to VND 2,000,000,000 or to a prison term of between 6 months and 3 years.
- Committing the crime in one of the following circumstances, the offenders shall be subject to a fine of between VND 2,000,000,000 and VND 4,000,000,000 or a prison term of between 02 and 07 years:
+ Organized;
+ Gaining illicit profits of VND 1,500,000,000 or more;
+ Causing damage to investors 3,000,000,000 VND or more;
+ Dangerous recidivism.
- Offenders may also be subject to a fine of between VND 50,000,000 and 250,000,000, a ban from holding certain posts, practicing certain professions or doing certain jobs for one to five years.
* In case a commercial legal entity commits a crime , the penalty shall be as follows:
- Committing the crime in the cases specified in Clause 1, Article 211 of the Penal Code , the offenders shall be subject to a fine of from VND 2,000,000,000 to VND 5,000,000,000;
- Committing the crime in the cases specified in Clause 2, Article 211 of the Penal Code , the offenders shall be subject to a fine of between VND 5,000,000,000 and 10,000,000,000;
- Committing the crime in the cases specified in Article 79 of the Penal Code , the operation shall be permanently suspended;
In addition, commercial legal entities may also be subject to a fine of from VND 500,000,000 to VND 2,000,000,000, a ban from doing business, from operating in certain fields for 1 to 3 years, or from raising capital from 01 year to 03 years.
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