Stock Manipulation and Its Illegal Profit Calculation

• Main Authors: Lin, Hsiao-Kan, 林小刊
• Other Authors: Lin, Chih-Chieh
• Format: Others
• Language: zh-TW
• Published: 2016
• Online Access: http://ndltd.ncl.edu.tw/handle/52vvxs

碩士 === 國立交通大學 === 科技法律研究所 === 105 === Due to social changes and technological development in recent years, we hear about major financial crimes from time to time. To safeguard investments and strengthen the securities market, when formulating the Securities and Exchange Act in 1968, the legislators have already stated clearly in Article 155, prohibiting the act of “manipulating stock prices” (we will refer to this as “manipulation”) and have listed various types of manipulation as examples. At the same time, those in violation of manipulations pursuant to Article 171 shall bear certain punishments. Later on, when the Securities and Exchange Act was amended in 2004, in addition to raising the statutory punishments of manipulations, the increased type of manipulation was even added in Paragraph 2 of Article 171. That is, those in violation of manipulations and have gained NT$100 million or more by the commission of an offense shall have increased punishment. Paragraph 6 of said article has stated clearly the scope of confiscation. Accordingly, the amount identified as having gained by the commission of an offense will affect the degree of punishment and scope of confiscation of the perpetrator and will have a huge impact in the personal freedom, property rights, and other rights of the defendant. Therefore, one must be extremely prudent in identifying the amount gained through the commission of manipulation. However, the Securities and Exchange Act does not further define the amount gained through the commission of manipulation; therefore, how the amount gained through the commission of manipulation is a major controversy in practice. Furthermore, although the reason for amendment of Paragraph 2, Article 171 of the Securities and Exchange Act was that the amount gained through the commission of manipulation can be calculated with the stock price during the manipulation period and the comparison between the rate of change in shares of similar nature or in the market, and multiply it with the number of shares manipulated by the perpetrator, there are still unclear areas in this calculation method, for example: In the end, is it more appropriate to use the shares of similar nature or the market as a comparative basis? How should the scope of shares of similar nature be defined? When the rate of change in the market or the shares of similar nature is larger than the stock price manipulated by the perpetrator, how should the amount gained through the commission of an offense be identified? These are all unclear. Since both the law and the reason for amendments do not clearly express the method of calculation, this has caused differences in practical insights and there have been situations such as constant remands and delayed proceedings. In order to practically understand the standards of calculating the amount gained through the commission of various manipulations, we have used certain keywords to search the judgment and decision of various courts and have selected the judgments and decisions that are newer or more representative to conduct in-depth analysis, so as to provide a criteria that can be followed for everyone. At the same time, through research methods, such as the review of documents and in-depth interviews, feasible recommendations for amendments on the issue of calculating the amount gained through the commission of an offense in Paragraph 2, Article 171 of the Securities and Exchange Act are proposed.