On May 17, the Supreme People's Court, the Supreme People's Procuratorate, the Ministry of Public Security, and the China Securities Regulatory Commission jointly issued the "Opinions on Several Issues Concerning the Handling of Securities and Futures Illegal and Criminal Cases" (hereinafter referred to as the "Opinions"), clearly proposing to adhere to the "zero tolerance" requirement and strictly crack down on illegal and criminal activities in securities and futures in accordance with the law.
Song Yixin, a lawyer at Shanghai Hanlian Law Firm, said that the regulatory authorities continue to increase the cost of violations of laws and regulations in the capital market, focus on investigating and handling a number of major fraud cases with bad social impact and serious damage to the legitimate rights and interests of investors, seriously investigate and deal with cases of illegal occupation of guarantees by controlling shareholders and actual controllers of listed companies, strengthen law enforcement in key areas such as bonds, futures, and private equity funds, and resolutely eliminate the "black sheep".
It should be moved as far as possible, arrested when it is caught, and prosecuted when it is sued
The "Opinions" put forward that the "zero tolerance" requirement should be adhered to, and the illegal and criminal activities of securities and futures should be strictly cracked down on in accordance with the law. Increase the force of investigation and punishment, persist in moving everything that should be removed, arresting when arrested, and prosecuting when it is prosecuted, strictly controlling the application of suspended sentences, increasing the force of application and enforcement of property punishments, maximizing the recovery of stolen goods and losses, and improving the system of full-chain crackdown and all-round accountability. Correctly implement the criminal policy of blending leniency with severity, adhere to the main tone of "strictness", lawfully determine leniency circumstances, and bring about the organic unity of political, legal, and social effects.
In terms of forming a joint work force, the "Opinions" pointed out that the people's courts, people's procuratorates, public security organs, and securities and futures regulatory agencies should adhere to the division of labor and responsibility, cooperate with each other, and check each other, improve and improve the working mechanism, and earnestly strengthen the transfer, investigation, prosecution and trial of securities and futures criminal cases, adhere to the trial as the center, constantly strengthen the awareness of evidence and procedures, effectively strengthen legal supervision, and ensure strict law enforcement and fair justice. It is necessary to persist in overall planning and coordination, give full play to the functions and roles of various departments, combine handling cases in accordance with the law with the prevention and resolution of financial risks, and maintain economic and financial security and social stability.
The Opinions require the people's courts, people's procuratorates, public security organs, and securities and futures regulators to clarify the standards for law enforcement and case handling and the standards for grasping policies, and unify the understanding and application of the law through joint formulation of normative documents and joint release of typical cases. Optimize institutional setups, strengthen the construction of case-handling bases and trial bases, and enrich front-line case-handling forces. Strengthen the professionalization of law enforcement and judicial teams, and raise the level of specialization.
Strengthen administrative law enforcement and
Interface in criminal justice
The "Opinions" point out that if the securities and futures regulator discovers that it is suspected of committing a crime and needs to be investigated for criminal liability in accordance with the law, it shall promptly transfer it to the public security organ. If the public security organ finds that there are criminal facts that need to be investigated for criminal responsibility in a case transferred by the securities and futures regulatory authority, it shall promptly file the case. Where there is evidence proving the existence of securities and futures violations, and it is necessary to give administrative punishments, confiscation of unlawful gains, market bans, or other such punishments to the persons involved in the case in accordance with securities and futures laws and regulations, an opinion shall be submitted within one month of the decision or judgment being made, and effective legal documents, evidentiary materials, and the basis for the disposition shall be attached.
With regard to the jurisdiction of criminal cases, the Opinions make it clear that the intermediate people's court shall have jurisdiction over the first-instance cases of securities and futures crimes, the people's procuratorate at the same level shall be responsible for initiating public prosecutions, and the public security organs at or above the prefectural (municipal) level shall be responsible for filing and investigating. Where one person commits multiple crimes, where the crimes are committed jointly, where the criminal suspects or defendants of the joint crimes also commit other crimes, or where the crimes committed by multiple criminal suspects or defendants are related and the handling of the cases is conducive to ascertaining the facts of the case, the people's courts, people's procuratorates, and public security organs may combine the cases within the scope of their duties.
With regard to the collection, review and use of evidence, the Opinions state that illegal and criminal acts in securities and futures have the characteristics of professionalism and concealment, and that in order to expose and prove the illegal crimes, the evidence that can be used to prove the facts of the case should be "collected as much as possible and collected as soon as possible". Pay attention to the collection of objective evidence such as extracted evidence, documentary evidence, and electronic data.
Crack down on financial fraud throughout the chain
The "Opinions" put forward that it is necessary to deeply understand the serious harm of securities and futures crimes to the order of financial management and financial security, adhere to severe punishment in accordance with the law, and give full play to the punishment and prevention functions of criminal punishment. Relative non-prosecution, exemption from criminal punishment, and suspended sentences are generally not to be applied to criminal suspects or defendants who have circumstances such as not truthfully confessing crimes, obstructing case-handling efforts in various ways, refusing to return stolen money or goods, or using stolen money or goods for illegal activities, where illegal profits are particularly huge, and who have repeatedly committed securities and futures violations and crimes, causing listed companies to be delisted, investors to suffer major losses, financial risks that might trigger financial risks, seriously endangering financial security, or other vile social impacts or serious harmful consequences.
The "Opinions" make it clear that illegal and criminal cases such as financial fraud, embezzlement of assets of listed companies, insider trading, market manipulation and securities fraud shall be investigated and dealt with strictly, quickly and severely in accordance with the law. Securities issuers, controlling shareholders, actual controllers, directors, supervisors, senior managers, financial practitioners, etc., who commit securities and futures violations and crimes, shall be severely punished in accordance with law. If a crime is constituted, criminal responsibility shall be pursued in accordance with law if the intermediary organizations and financial institutions that provide false supporting documents and financial bills for financial fraud, professional gangs that carry out cooperative acts such as capital allocation, trading and stock recommendation for the crime of insider trading and manipulation of the securities and futures market, and external personnel who collude with the listed company inside and outside the company to hollow out the company's assets, and constitute a crime.
In addition, the "Opinions" require that the application and enforcement of property penalties be strengthened, and that the people's procuratorates put forward sentencing recommendations and the people's courts make judgments, and that they should pay attention to the simultaneous use of liberty punishments and property penalties and the recovery of illegal gains, and increase the economic penalties and property enforcement of securities and futures criminals. People's procuratorates and people's courts may submit a recommendation for a professional prohibition in accordance with law, and make a decision on a professional prohibition based on the circumstances of the criminal suspect's or defendant's crime and the need to prevent further crimes.
Violence obstructs the SFC
Perform duties or pursue criminal responsibility
The "Opinions" put forward that it is necessary to establish and improve the information notification mechanism, establish and improve the law enforcement and judicial joint special action mechanism, establish and improve the work consultation mechanism, jointly supervise and handle major cases, respond to market concerns in a timely manner, play a deterrent role, analyze and judge the situation of violations and crimes, put forward governance countermeasures, and jointly improve the quality and efficiency of work. For those who obstruct the CSRC's performance of their duties in accordance with the law by means of violence or threats, the public security organs shall deal with it in accordance with the law, and if a crime is constituted, criminal responsibility shall be investigated in accordance with the law.
Zhang Xiaojin, director of the Fourth Procuratorate of the Supreme People's Procuratorate, said in an interview during the two sessions that the "Opinions" aim to further improve the mechanism for connecting executions and criminal procedure rules for handling securities and futures crime cases. The Supreme People's Procuratorate is compiling and distributing guiding cases on securities crimes, formulating case-handling guidelines and related answers, and cooperating with the Supreme People's Court in studying and revising judicial interpretations on insider trading. Through the formulation and promulgation of these judicial interpretations and normative documents, we have gradually clarified the collection and acceptance of evidence, the application of law, and the grasp of laws and policies in handling securities crime cases, and improved the judicial standards for law enforcement.
The China Securities Regulatory Commission also said a few days ago that it will continue to deepen cooperation. Give full play to the advantages of the mechanism of public security and procuratorial offices and convenient communication, and work with public security and procuratorial organs to centrally deploy and supervise the handling of cases. Strengthen the linkage with relevant ministries and commissions and local governments in areas such as information circulation, data sharing, and case handling, and form a work pattern in which each performs its own duties, organically connects, and works together to govern.
Recently, the regulatory authorities have frequently spoken out, releasing an attitude of continuous strict supervision and "zero tolerance" for illegal acts. Song Yixin said that comprehensively strengthening financial supervision, maintaining the smooth operation of the capital market, and protecting the legitimate rights and interests of investors need to be provided by the legal system.
Editor/Fan Hongwei