[Direct answer]In the Beijing area, fund practitioners who engage in "insider trading" (using undisclosed information obtained through their positions to conduct related transactions and profit from them using others' accounts) can report such activities to the China Securities Regulatory Commission's 12386 service hotline, or to fund managers and the Asset Management Association of China's Securities Investment Fund Industry. Those suspected of committing crimes should report the cases to public security authorities. According to Article 180, Paragraph 4 of the Criminal Law of the People's Republic of China (added by the Amendment (VII) to the Criminal Law on February 28, 2009), those who engage in insider trading with serious circumstances shall be guilty of the crime of insider trading; according to the Securities Law of the People's Republic of China (amended on December 28, 2019 and implemented since March 1, 2020), relevant practitioners also face administrative penalties and market entry bans. When reporting such activities, it is recommended to provide clues such as account transaction records and time correspondences. Reports can be made anonymously or under real names, and regulatory authorities will keep the identities of whistleblowers confidential in accordance with the law.

1. Problem background and typical scenarios

"Insider trading" refers to fund practitioners using undisclosed trading information obtained during the management of funds to buy and sell the same stocks in advance or simultaneously using relatives' or others' accounts to profit, thereby harming the interests of fund investors. When fund shareholders find abnormal fluctuations in net value or significant underperformance compared with similar products, suspicions raised by the company's internal control or peers about the high degree of coincidence between the transactions of fund practitioners' relatives' accounts and the products they manage, as well as historical clues of violations reported by departing employees, are all common reporting starting points. For supervision matters involving violations of the securities market, reference can be made to the relevant provisions.\nFinancial capital and cross-border transactions involving foreign entitiesThe column. The headquarters of fund management companies in the Beijing area are concentrated, and the verification of relevant illegal clues is mostly handled by the China Securities Regulatory Commission and its dispatched agencies.

II. Key points of contention

Focus One: Behavioral Qualification. "Insider trading" may involve both administrative and criminal liabilities, and serious cases may constitute the crime of trading on undisclosed information. Focus Two: Choice of Reporting Channels. Criminal clues should be reported to the public security organ simultaneously, while administrative violations can be reported via the 12386 hotline or directly to the China Securities Regulatory Commission (CSRC) and its dispatched agencies. Focus Three: Evidence Requirements. Key verification points include account transaction similarities, temporal correspondences, and the sources of funds and ownership of profits. Net worth fluctuations alone are insufficient to initiate a case. Focus Four: Whistleblower Protection. Real-name reports will be kept confidential according to law, and those concerned about retaliation can report anonymously. Focus Five: Compensation for Investors' Losses. Paths for civil compensation shall be subject to current effective laws, regulations, and judicial rulings. For cases involving other securities crimes, reference can be made to relevant provisions.Criminal defenseColumn.

III. Professional analysis by Henglue Lawyers

From the practical observations of lawyers handling securities-related disputes at our firm, the investigation of "insider trading" cases typically follows three main approaches: 1. **Administrative Investigation**: After the China Securities Regulatory Commission (CSRC) conducts on-site inspections of fund management companies or receives tip-offs, it retrieves transaction data to compare the trading patterns of employees' accounts with those of the products they manage. Upon verification, administrative penalties and market access restrictions may be imposed. 2. **Criminal Prosecution**: Where there is clear trading similarity and the amount or profit involved meets the prosecution threshold, the case is transferred to public security authorities for investigation under the charge of "trading with undisclosed information." The actual account operators and fund owners may also be held accountable. 3. **Civil Compensation**: Determining liability for fund assets or investor losses involves complex issues such as causality and loss calculation. Practical challenges often arise: - Tip-offs may lack concrete evidence or account-related clues, making it difficult to initiate investigations. - Internal company investigations may destroy evidence or tip off the suspects. It is recommended to consult professional lawyers after gathering sufficient evidence to evaluate the sufficiency of evidence and the choice of reporting channels, before deciding on the reporting method and timing.

IV. Practical suggestions and legal basis

Action suggestions: First, organize the clue materials, including the job information of the involved personnel, the transaction records of relevant accounts, the time correspondence between the transactions and the management products, and the flow of funds, etc. Second, choose an appropriate channel to report administrative violations to the CSRC 12386 hotline or its dispatched agencies, and report suspected crimes to the economic investigation departments of public security organs. You can also first report to the compliance departments of fund management companies or the Fund Industry Association. Third, pay attention to fixing evidence. Keep copies of important materials yourself to avoid only circulating them internally within the unit. Fourth, evaluate the need for whistleblower protection. For real-name reports, confidentiality shall be guaranteed according to law, and for sensitive situations, anonymity may be allowed. Fifth, if you are involved in investment losses, evaluate the civil remedy path separately. In terms of legal basis, Article 180 Paragraph 4 of the Criminal Law of the People's Republic of China (the Seventh Amendment to the Criminal Law was added on February 28, 2009) stipulates the crime of trading with undisclosed information; the Securities Law of the People's Republic of China (amended on December 28, 2019 and implemented from March 1, 2020) stipulates the prohibited behaviors and penalties for securities practitioners; the Code of Conduct for Fund Practitioners can be referred to the relevant provisions of the Securities Investment Fund Law of the People's Republic of China (amended on April 24, 2015). The specific application shall be subject to the currently effective version and regulatory recognition. For the sorting of reporting materials and evidence, please refer to the relevant provisions.Special services and other casesColumn.

5. Henglue Law Firm's Advice

Risk warning: Firstly, reports should be based on objective clues rather than mere speculation. Materials based solely on net worth fluctuations or personal inferences are unlikely to be accepted. Secondly, it is essential to back up important transactional evidence beforehand. Reporting directly to the company involved may lead to evidence loss. Thirdly, there are legal standards for prosecuting crimes of trading on undisclosed information, and the amount, profit, and circumstances will determine the nature of the crime. It is advisable to seek professional evaluation. Fourthly, whistleblowers' information is protected by law, but personnel in sensitive positions should still choose their reporting methods and timing with caution. For legal issues involving violations of the securities market, please pay attention to the relevant information.Beijing Henglue Law FirmFor further guidance, please refer to the corresponding column on the official website.

VI. Frequently Asked Questions

Q1: Will reports of insider trading in funds be accepted?

The regulatory authorities accept reports on the basis of clear clues: the more specific the materials such as the position information of the involved personnel, the records of transactions between relevant accounts and fund products, the corresponding time relationships, and the flow of funds, the higher the likelihood of entering the verification process. However, it is usually difficult to verify reports based solely on abnormal net asset values or subjective suspicions, or those lacking account-related information. Both the 12386 hotline and the CSRC's dispatched agencies have acceptance mechanisms. Whether to initiate a case depends on the value of the clues. It is recommended to first evaluate the evidence before submitting the report.

Q2: What evidence do I need to prepare to report insider trading?

Valuable materials include: the names of the involved employees, their employment institutions and positions; the account opening information and transaction records of relevant trading accounts, with a focus on records that highly coincide with the holdings of fund products and the timing of purchases and sales; clues about the sources of account funds and the destinations of profits; and background materials that can demonstrate their use of their positions to obtain undisclosed information. It is advisable for the evidence to reflect the two lines of "congruent transactions" and "interest attribution", and priority should be given to records obtained through legal channels.

Q3: Does it cost money to report insider trading?

Reporting to the CSRC's 12386 hotline, dispatched agencies, or public security organs does not incur any fees. The main costs lie in evidence collection and professional consultation, such as hiring lawyers to sort out clues, evaluate criminal charges, and formulate reporting strategies. The fees are negotiated based on the content of the services. It is necessary to be vigilant against institutions that charge high fees under the guise of "representing victims to report and protect their rights". All official reporting channels are free of charge, and litigation fees only arise in cases involving civil compensation litigation.

Q4: How long will it take to get the processing result after reporting a problem?

The processing time depends on the value of the clues and the complexity of the investigation. Generally, after initial verification, clues may be transferred to the verification process. Administrative investigations usually take months, while complex on-site inspections and data comparisons may take longer. For cases transferred to criminal prosecution, the investigation, review, and prosecution to trial cycle can take years. Most reporting channels do not provide real-time progress updates to reporters. However, they can leave their contact information when submitting the report to await notifications of supplementary materials. For major clues, inquiries can be made to the handling departments as needed.

Q5: How exactly should I proceed if I discover evidence of insider trading?

The first step is to legally collect and back up the account transaction records, time correspondence relationships, and other core clues; the second step is to assess whether the clues point to administrative violations or criminal offenses, and choose the 12386 hotline, the securities regulatory authorities' dispatched institutions, or the public security economic investigation departments; the third step is to first report the situation to the compliance department of the fund management company or the Fund Industry Association, and it is recommended to remain anonymous if the situation is sensitive; the fourth step is to cooperate in providing supplementary materials and keep all the submitted copies for yourself; the fifth step is, if the investor suffers investment losses, consult a lawyer to evaluate the path of civil remedies, and the investor can refer to the relevant provisions of the Securities Law for reference.\nFinancial capital and cross-border transactions involving foreign entities.Column.

The above answer is based on the judicial practice in Beijing. The judicial interpretation in other provinces and cities may vary. For specific cases, please refer to the local rules and evidence situation.

If you are currently facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the necessary evidence to avoid missing the statutory time limits. →Financial capital legal services·Beijing Henglue Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and publicly available adjudication rules, and is provided for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If a dispute arises, please consult a practicing lawyer in a timely manner.