Regulations of Vietnamese law on the crime of manipulating the stock market

Currently, for young people who are passionate about investment, securities are no longer a strange term. Besides, the stock market is growing day by day. Therefore, individuals and organizations take advantage of them to commit illegal acts, including manipulating the stock market. So what is the law on manipulating the stock market? Let’s find out the above content with Lawyer X in the article below.

Legal grounds

• Securities Law 2019
• Decree 156/2020/ND-CP
• Penal Code 2015 was amended and supplemented in 2017

What is stock market manipulation?

First, it is necessary to confirm that the act of manipulating the stock market is one of the prohibited acts in securities and securities market activities.

Specifically, Clause 3, Article 12 of the Securities Law 2019 prohibits:

3. Using one or more trading accounts of one’s own or another’s or colluding to buy and sell a security or to create artificial supply and demand; trading securities in the form of colluding, enticing others to buy and sell 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.

At the same time, in Clause 2, Article 3 of Decree 156/2020, “stock market manipulation” is the performance of prohibited acts in securities and securities market activities, including one, several, or all behaviors below:

• Using one or more trading accounts of their own or others or colluding to continuously buy and sell securities create artificial supply and demand;
• Besides, lacing buy and sell orders of the same type of securities on the same trading day or colluding with each other to buy and sell securities without real 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 to create a new closing or opening price for that security in the market;

– Trading securities in the form of collusion, enticing others 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 securities influence the price of such securities after the transaction has made trade and hold positions for such securities;

Using methods or performing other trading behaviors or combining spreading false rumors, providing false information to the public to create artificial supply and demand, and manipulating securities prices.

The person who commits the above acts, if causing serious consequences, may prosecute for the crime of manipulating the securities market specified in Article 211 of the Penal Code 2015.

What is the punishment for manipulating the stock market?

About criminal:

Any individual or commercial legal entity that manipulates the stock market may be criminally prosecuted for manipulating the stock market as specified in Article 211 of the Penal Code, specifically:

* Individuals committing crimes:

– Any person who commits one of the acts specified in item (1) earns an illegal profit of between VND 500,000,000 and under VND 1,500,000,000 or causes damage to the investor from VND 1,000,000,000 to under VND 3,000,000,000; shall be subject to a fine of between VND 500,000,000 and 2,000,000,000 or 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 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.

The 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.

* Commercial legal entities that commit crimes shall be fined as follows:

– Firstly, 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;

– Besides, 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 VND 10,000,000,000;

– Committing the crime in the cases specified in Article 79 of the Penal Code, the operation shall permanently suspend;

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 for 1 to 3 years. 03 years.

About administration:

The level of administrative penalty for acts of manipulating the securities market specified in Article 36 of Decree 156/2020/ND-CP (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 level calculated based on illegal revenue is lower than 3,000,000,000 VND for organizations and 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:

• Suspend securities business and service activities for a period of from 01 months to 03 months for securities companies, securities investment fund management companies, branches of securities companies, or fund management companies. Foreigners in Vietnam commit violations;
• Deprivation of the right to use securities practice certificates for a period of 18 to 24 months for securities practitioners who commit violations.

– Remedial measures:

Forcible return of illegal revenues obtained from committing violations.

Related article:

• What types of businesses can issue securities in Vietnam?
• Conditions for foreign investors to establish securities companies

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