Beijing court reports nearly 90% of securities crimes involve insider trading

Nearly 90 percent of securities criminal cases in Beijing involve insider trading or the leakage of insider information, with most offenders being well-educated or holding high-level positions in companies, according to a report released Tuesday by the Beijing No 3 Intermediate People's Court.

Since the court was designated as a base to combat securities crimes in January 2022, it has handled 44 cases, 89.36 percent of which were related to insider trading and the unauthorized disclosure of insider information, Wang Haihong, vice president of the court, said at a news conference.

In one notable case, a defendant identified by the surname Ma engaged in insider trading during a company merger. While serving as an external director of the company, Ma had multiple conversations with individuals privy to insider information. He then used this information to control others' securities accounts and purchased more than 750,000 shares of the company, earning over 4.9 million yuan ($686,421).

"Buying such a large number of stocks during this special period was contrary to Ma's previous behavior of reducing his holdings and also contrary to the trend of the stock market," the court said. Ma failed to provide a reasonable explanation for his actions, and the court ultimately found him guilty of insider trading, sentencing him to six years in prison and fining him 13 million yuan.

Wang noted that securities crimes are highly specialized, often involving fields such as accounting, finance, and technology. The court's data revealed that 59% of the offenders were college graduates, and 54% were company executives or actual controllers.

Zhang Yuan, deputy chief judge of the court's No. 2 Criminal Adjudication Tribunal, emphasized that securities crimes are not only difficult to detect but also pose significant risks to social stability due to the large number of investors affected.

Zhang urged enterprises, regulators, and industry associations to strengthen their efforts against securities crimes. "Enterprises should operate in accordance with the law, enhancing their employees' legal awareness, while regulators need to increase oversight of the capital market," she said.