In This Issue:
- Increased Scrutiny by Chinese Securities Regulators Will Have Global Implications
- Effective Employee Suspension Agreements to Facilitate Compliance Investigations
- Protecting Against Counterfeit Fapiaos
- Preventing International E-mail Fraud
- Data Breaches in China: A Roadmap to Successful Mitigation
- Excerpt from Increased Scrutiny by Chinese Securities Regulators Will Have Global Implications:
The China Securities Regulatory Commission (CSRC)—which, like the US Securities and Exchange Commission (SEC), is tasked with regulating and overseeing the issuance and trading of stocks on domestic exchanges—recently announced a campaign to crack down on insider trading and market manipulation in China’s growing capital markets. This new campaign is just one example of the CSRC’s increased focus on insider trading and its effects on retail investors, under the helm of its new chairman, Xiao Gang. This focus in mainland China corresponds to an increased interest in insider trading abroad on the heels of a recent US appellate court decision, United States v Newman, 773 F.3d 438 (2d Cir. 2014), which heightened the standards for proving insider trading in certain circumstances.
The impact of the most recent campaign and related efforts to address insider trading affecting Chinese stock exchanges will likely extend beyond China’s borders, owing to foreign investors’ participation in China’s capital markets, and potential cooperation between the CSRC and overseas securities regulators like the SEC. Businesses investing in China, and those considering doing so, should pay close attention to these developments and ensure they have in place policies prohibiting deceptive or manipulative practices, and that these policies are effectively communicated to employees, agents and officers.
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