Prevention Mechanism against Crime in Insider Trading: Focusing on Corporate Governance and the observation of practical cases in Taiwan

• Main Authors: JYUN-MAO CHEN, 陳俊茂
• Other Authors: 陳貴端
• Format: Others
• Language: zh-TW
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/85565308089321210879

碩士 === 逢甲大學 === 經營管理碩士在職專班 === 98 === Abstract In recent years, the insider trading cases have become a hot news topic for many times. For example, the acquisition of the Siemens mobile phone department has resulted in a severe financial loss for BenQ Mobile. Even the chairman and senior managers were being sued due to the violation of insider trading law. Although all defendants in this lawsuit were declared innocent by the Court of First Instance, the case is still waiting for the final judgment. Through the analysis of the insider trading cases in our country, it is found that the securities administration authority and judiciary may assume that the parties involved have committed insider trading because of some corporate governance issues. To prevent similar situations, the corporation must highly regard the internal control regulation to avoid the intentional or accidental behaviors and suspicion of being involved with insider trading through establishing the effective system. To enhance the prevention of insider trading for the listed companies, the Financial Supervisory Commission of Executive Yuan revised the article 8 scope of internal control system of “Guidelines for Establishment of Internal Control Systems by Public Companies” on 16th March 2009. Thereafter, the listed companies added a management procedure to prevent insider trading. However, most of the companies took the Securities and Exchange Act related to insider trading and a sample of “ｏｏLimited Corporation’s Internal Significant Information Processing Procedure” published by Taiwan Stock Exchange as the contents of their management procedures. In fact, these procedures may not be able to achieve the objective of the prevention of insider trading. Since the U.S. Securities and Exchange Act is advanced and detailed, our insider trading system mainly came from the relevant regulations of it. Moreover, the U.S. companies already developed an effective internal control system after adhering to their national securities and exchanges act for a long time. This can be taken as references for our domestic corporations. Through the analysis of domestic insider trading cases, this study aimed to discuss the facts and legal issues of the cases and reviewed the relationship between the corporate governance issues and the insider trading cases. Based on the U.S. insider trading regulation system and the internal control measures taken by U.S. corporations to prevent insider trading, it is hoped to provide recommendations to our domestic corporations for establishing an effective internal control standard to prevent insider trading. Besides, the article 157-1 of the insider trading law of our domestic Securities and Exchange Act has been revised for several times but still had many practical issues. In particular, our insider trading law system was delivered from foreign acts. With regard to the new development of foreign acts and practices as well as the characteristics of our domestic legal system and the trend of foreign legislation and practices, this study provided advices for future amendment of article 157-1 of the Securities and Exchange Act. Keywords: insider trading, corporate governance, internal control, management procedure for the prevention of insider trading