Crime of manipulating the stock market in Vietnam

Society is increasingly developed and modern. Subjects are very interested in earning extra income online. And stock investment is now no stranger to individuals and organizations. However, because the stock market is interested by many people, it is common for individuals and organizations to manipulate the stock market.

So to learn about the issue of “How is the crime of manipulating the stock market handled?” Let’s refer to Lawyer X’s article below!

Legal grounds

• Securities Law 2019
• Decree 156/2020/ND-CP

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, in Clause 3, Article 12 of the Securities Law 2019, it is strictly forbidden to:

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.

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 one’s own or another’s or colluding to continuously buy; and sell securities in order to create artificial supply and demand;
• Placing 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 leading to actual transfer of ownership or ownership only circulating between members. in the group to create securities prices, artificial supply and demand;
• Continuously buy or sell securities with a dominant volume at the time of opening; or closing the market in order to create a new closing price or opening price for that type of security on the market;
• Trading securities in the form of colluding, 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; about the securities issuer in order to influence the price of that type of security after making the decision trading and holding positions in 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 manipulating securities prices.

What constitutes the crime of manipulating the stock market?

Objective side

The objective side of this crime has the following signs:

a) About behavior. Having one of the acts specified in Clause 2, Article 3 of Decree 156/2020.

b) Other signs. Have one of the following symptoms:

• Gaining illicit profits from VND 500 million or more.
• Or cause damage to investors from 1 billion VND or more.

Objects

The above acts violate the securities price management activities.

Subjective side

The offender committed this crime with willful error.

Subject

The subject of this crime is any person, commercial legal entity with criminal capacity.

How is the crime of stock market manipulation handled?

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 are fined
• 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 VND 10,000,000,000;
• Committing the crime in the cases specified in Article 79 of the Penal Code, the operation shall be permanently suspended;

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.

Administratively

The level of administrative penalty for acts of manipulating the securities market is 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 month 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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