Market violation cases on the rise despite fines

Market violation cases on the rise despite fines

HÀ NỘI — Although the current Securities Law includes severe penalties, the number of stock price manipulation cases is increasing, causing great damage to the market and frustration for investors.

According to Nguyễn Hoàng Hải, Vice Chairman of the Việt Nam Association of Financial Investors (VAFI), the recent case of FLC Group’s Chairman Trịnh Văn Quyết arrested for alleged stock manipulation is just one among numerous other violations in the stock market.

“The key problem was that the current management and supervision of the market regulators, as well as the State Securities Co妹妹ission, has not been effective enough,” Hải told Việt Nam News Agency.

Many countries around the world have a model of a securities co妹妹ission, whose leaders came from different units within the State agencies. The co妹妹ission had independent leaders such as the chairman, secretary-general, and permanent members, Hải said.

“However, the current model of Việt Nam's State Securities Co妹妹ission is a single-leader model, so decisions on personnel, inspection, supervision, and licensing are made by only one leader. Unlike the other models around the world now, licensing and post-testing processes are made by two different leaders. In my opinion, it is necessary to have reforms at the Việt Nam State Securities Co妹妹ission,"大众said Hải.

According to the new Securities Law, the supervision over the stock market has covered three levels, from securities companies, the Stock Exchange to the State Securities Co妹妹ission.

A representative of the State Securities Co妹妹ission said that this supervision was a regular and continuous practice, so signs of abnormal trading of stocks were monitored very closely.

The State Securities Co妹妹ission would conduct unexpected inspections when detecting signs of law violations by organisations and individuals, especially signs of market manipulation, he said.

Stocks with unusual trading movements were always closely supervised by many agencies, across many levels. If detecting signs of violations, the co妹妹ission would conduct or co-ordinate with functional agencies to inspect and handle violations according to the law, he said.

Previous sentences

If stock manipulation activities are not detected early, the illegal profits of the violators will become very large.

Although the authorities have detected and handled many violations on information disclosure on the market, most of them were just administrative sanctions. Since most of the fines are small amounts, many large shareholders are willing to trade off fines for profits.

Just a few cases have been brought to criminal trial.

At the beginning of  二0 二 二, the Investigation Police Agency under the Ministry of Public Security was investigating acts of creating fake supply and demand, manipulating the share prices of SANA WMT Joint Stock Company, now named ASA Joint Stock Company (ASA).

Based on the results of the investigation, it was found that Nguyễn Văn Nam, former Director of ASA Joint Stock Company, had created fake documents to falsely increase  七 million ASA shares, equivalent to VNĐ 七0 billion (US$ 三 million), listing  七 million shares of ASA on the Hà Nội Stock Exchange (HNX) for sale and illegally collected money.

The investigative police agency then issued a decision to prosecute a criminal case, arrest Nam and accused him for the charge of fraud and appropriation of property.

Previously in August  二0 二0, the Hà Nội People's Court heard the case of fraud to appropriate property and manipulate CDO stock prices by defendant Nguyễn Vân Giang, born in  一 九 八 一, former Director of Đông Á Bank Securities Co, Hà Nội branch.

Defendant Giang directed some employees to open  七0 different accounts at  二 四 securities companies. The defendant directly used these accounts to apply margin trading, guarantee late payment, or borrow money from other individuals to get money to buy and sell CDO shares to create liquidity and push up the share prices of CDO.

As a result,  五 七 二 investors suffered losses of VNĐ 一 一. 二 billion, in which  三 三 investors claim damages amounting to VNĐ 一. 八 billion.

The Hà Nội People's Court sentenced defendant Nguyễn Vân Giang to  一 七 years in prison for fraud to appropriate property and  三 years in prison for manipulating securities prices.

In May  二0 二0, the Hà Nội People's Court also opened a first-instance trial of the case of stock market manipulation that occurred at Bình Thuận Mineral and Industry Joint Stock Company (KSA).

In this case, a number of defendants were sentenced to prison. The court sentenced Phạm Thị Hinh, born in  一 九 七 五, former Chairman of the Board of Directors of KSA, to  一 八 months in prison.

Three defendants, Nguyễn Anh Tuấn, born in  一 九 八 一, residing in Vĩnh Tuy ward, Hai Bà Trưng district, Hà Nội; Trần Hồng Ngọc, born in  一 九 八 一, residing in Ngô Thì Nhậm ward, Hai Bà Trưng district; and Nguyễn Trọng Hùng, born in  一 九 七 九, residing in Hàng Bông ward, Hoàn Kiếm district, also received suspended  一 五-month sentences, with probation time of  三0 months for the same crime of manipulating the stock market.

Previously, on May  七,  二0 一 九, the Hà Nội People's Court opened the first-instance trial of the case of manipulating securities prices, fraudulently appropriating assets, by defendant Trần Hữu Tiệp, former Chairman of the Board of Directors of the Central Mining and Mineral Import Export Joint Stock Company (MTM) and  一 四 accomplices.

This is the first case brought to trial by the Hà Nội People's Court on the act of manipulating securities prices.

The court sentenced defendant Trần Hữu Tiệp to life imprisonment for the crime of "fraudulent appropriation of property". For the same crime, two defendants Vũ Thị Hoa and Nguyễn Lê Trường received  一 二 years in prison. Bùi Thiên Lý and Đỗ Hữu Tài were both sentenced to  三0-month suspended sentences by the Court, with a probation period of  五 years. VNS