How to understand the behavior of "manipulating the stock market"?

DNHN - According to the provisions of Clause 3, Article 12 of the Law on Securities in 2019 and Clause 2, Article 3 of Decree No. 156/2020/ND-CP dated December 31, 2020 of the Government, it can be affirmed that the act of manipulating the stock market is one of the prohibited acts in securities and stock market activities.

What is stock market manipulation?

Stock market manipulation is the practice of deceiving investors by artificially controlling or influencing the prices of securities. This behavior can also involve false statements that influence stock prices to mislead other investors. 

Current regulations in Vietnam prohibit the act of manipulating the stock market

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

Meanwhile, Clause 2, Article 3 of Decree No. 156/2020/ND-CP of the Government clearly states that the act of "manipulating the stock market" is the performance of prohibited acts in securities and stock market activities, including one, some, or all of the following behaviors: 

- 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 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 same trading day. group to create stock prices, artificial supply and demand.

- Continuously buying or selling securities with dominant volume at the opening or closing of the market in order to create a new closing or opening price for that 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 a position in that security.

- 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. 

Imprisonment from 2-7 years for stock market manipulation.

According to Article 211 of the 2017 Penal Code, anyone who commits one of the acts of "manipulating the stock market" and gains illegal profits from 500 million VND to less than 1.5 billion VND or causes damage to investors from 1 billion VND to less than 3 billion VND, they will be prosecuted for criminal responsibility for the crime of stock market manipulation. 

Regarding specific penalties, according to Lawyer Hung, the penalty for this crime is divided into two frames. Frame one (clause 1, Article 211 of the Penal Code 2017) has a penalty of a fine of between VND 500 million and VND 2 billion, non-custodial reform for up to 3 years or a prison term of between 6 months and 3 years.

Frame two (Clause 2, Article 211 of the Penal Code 2017) has a prison term of between 2 years and 7 years, applicable to one of the cases of organized crime; Large illicit profits of 1.5 billion VND or more; Causing very serious or particularly serious consequences to investors of 3 billion VND or more; Dangerous recidivism.

In addition to being sanctioned with one of the main penalties mentioned above, offenders may also be subject to a fine of between VND 50 million and VND 250 million, a ban from holding certain posts, practicing certain professions or doing certain jobs for 1 year. up to 5 years. 

Lam Nghi