[Direct answer]In the Beijing area, bulk transactions are themselves a compliant large-scale transfer mechanism. However, if the information is undisclosed insider information, and the insider leaks it in advance or advises others to buy or sell based on it, they may be suspected of insider trading. According to Article 50 and Article 191 of the Securities Law of the People's Republic of China and Article 180 of the Criminal Law of the People's Republic of China, the use, advice, or disclosure of insider information may result in the confiscation of illegal gains and fines, and those who commit serious offenses will be held criminally responsible. In such cases, transactions should be stopped, communication records should be preserved, and professional lawyers should be consulted. For more details, please refer to the following link:Financial capital and cross-border legal services involving foreign affairs.

I. Problem Background and Typical Scenarios

Large-scale transactions are used for the transfer of securities with a large single quantity or amount. On the A-share market, such transactions are typically conducted on the exchange's large-scale trading platform, with a single declaration generally requiring no less than 300,000 shares or 2 million yuan (subject to the exchange's current rules). Typical scenarios include: large-scale takeover of shares before the delisting of a listed company due to mergers and acquisitions or restructuring; the spread of news before the disclosure of a share reduction plan; the leakage of information by analysts or project staff of intermediary institutions; the dissemination of so-called insider information in WeChat groups or during dinner parties; and abnormal fluctuations in share prices before the announcement, which raise doubts. In such situations, all parties involved need to assess the legal boundaries of the nature of the information and their own identities. For relevant regulations, please refer to the following link:Financial capital and cross-border legal services involving foreign affairs.

II. Key points of contention

There are four core disputes. Firstly, whether the information constitutes statutory insider information: it must simultaneously meet the criteria of materiality (having a significant impact on the price of securities) and non-disclosure. The company's intentions and negotiation status may not necessarily constitute insider information by default. Secondly, the identity of the subject: whether they belong to the insiders listed in Article 51 of the Securities Law, or those who illegally obtain insider information, directly determines whether they fall within the prohibited scope. Thirdly, the nature of the act: using insider information to trade, advising others to buy or sell, and simply leaking information are subject to different legal evaluations. Fourthly, the level of responsibility: administrative violations are mainly dealt with through order processing, confiscation of illegal gains, and fines, while constituting a crime requires that the transaction amount and the amount of profits or losses avoided meet the standards for criminal prosecution. In the regulatory practice of the Beijing area, the exchange's monitoring of abnormal transactions and the CSRC's law enforcement are closely connected, and transactions during sensitive periods are easily subject to retrospective verification.

III. Professional analysis by Henglue Lawyers

The investigation and protection of securities and futures disputes highly rely on the use of evidence and regulatory documents. Attorney Yang Yafang once represented a private equity fund investment arbitration case: In September 2020, investor Ge * subscribed to a private equity fund of A Investment Management Co., Ltd. for 1.6 million yuan. After the fund was terminated on August 4, 2021, only 12 liquidations and 213,613.64 yuan of redemptions were completed by April 21, 2023. Attorney Yang Yafang represented him to apply for arbitration to the Beijing Arbitration Commission. In addition to sorting out evidence such as the fund contract, liquidation report, and quarterly reports, he also retrieved administrative supervision documents from the Shanghai Securities Regulatory Bureau, including the "Decision on Ordering the Manager to Make Corrections" and the "Decision on Issuing a Warning Letter", forming a complete chain of evidence. Ultimately, the arbitration tribunal determined that the manager failed to fulfill his suitability obligations, engaged in pooled fund operations, and failed to fulfill his duty of diligence. The tribunal ordered the return of the investment amount of 1,386,386.36 yuan plus interest, attorney's fees of 40,000 yuan, and arbitration fees of 42,549.88 yuan. This case shows that in capital market disputes, administrative supervision findings and market transaction records are often key to establishing the facts. Whether it's being investigated for insider trading or suffering losses due to information leaks, it's important to fix evidence in time and respond to the situation in accordance with the law. This case was handled by Beijing Henglu Law Firm.Yang YafangThe attorney (practice certificate number: 11101202211531374, subject to the certificate issued by the judicial administrative organ) acts as the agent.

IV. Practical suggestions and legal basis

The legal basis includes Article 50 (Prohibition of Insider Trading) of the Securities Law of the People's Republic of China (amended on December 28, 2019 and implemented on March 1, 2020); Article 51 (Scope of Insiders); Article 52 (Definition of Insider Information); and Article 191 (Administrative Liability) of the same law; Article 180 (Crimes of Insider Trading and Disclosure of Insider Information) of the Criminal Law of the People's Republic of China (amended on March 14, 1997 and implemented on October 1, 1997); and Article 1165 (Liability for Tort Based on Fault) of the Civil Code of the People's Republic of China (implemented on January 1, 2021). Action list: First, when it is impossible to determine the nature of the information, do not trade or disclose it. Second, if you come into contact with sensitive information due to your work, record the time of contact, the source, and the scope of dissemination. Third, if your unit has information isolation walls or requirements for insider registration, strictly implement them. Fourth, if you are investigated by the China Securities Regulatory Commission or questioned by the public security authorities, cooperate with the investigation and make legal statements and defenses as soon as possible, and hire a lawyer as soon as possible. Fifth, if you are suspected of criminal risks, strive to obtain mitigating circumstances such as voluntary surrender, confession, and plea bargaining.Criminal defense and criminal case filing services.

5. Henglu Law Firm's Reminder

A piece of "gossip" shared in a WeChat group or at a dinner table could also be deemed as leaking insider information. Those who illegally obtain insider information will be punished just like the insiders, and the units involved may also be charged with crimes. Large-scale transactions themselves are not inherently wrong; rather, abnormal transactions during sensitive periods are the focus of regulatory attention. Once an investigation is launched, there may be a seamless transition between administrative enforcement and criminal justice. The earlier professional lawyers are involved, the better they can protect clients' rights. When handling similar cases in the Beijing area, it is recommended to seek legal advice promptlyBeijing Henglue Law FirmProfessional lawyers assess liability risks.

VI. Frequently Asked Questions

Q1: If the news of a large-scale transaction is leaked, does it necessarily constitute insider trading?

Not necessarily. The determination requires simultaneously examining whether the information belongs to significant and undisclosed insider information, whether the actor is a person who is aware of or illegally obtains the information, whether there is behavior of using the information to trade or advising others to buy or sell, and whether there are acts of disclosure. There are also thresholds for administrative responsibility and criminal responsibility, as well as the amount and circumstances. If the information does not belong to statutory insider information, or the actor does not use the information to trade, it usually does not constitute insider trading. Whether it constitutes insider trading shall be determined by regulatory authorities and judicial judgments. Lawyers cannot unilaterally predict the conclusion.

Q2: What evidence do I need to prepare to respond to the investigation?

The party under investigation shall keep the following documents: communication records (WeChat, text messages, emails, call logs), declarations and transaction details on large-scale trading platforms, securities account transaction records, working traces involving sensitive information (meeting records, approval processes, email exchanges), and the company's insider registration and confidentiality agreements. Aggrieved investors shall keep trading statements, timelines of stock price fluctuations and announcements, and administrative punishment decisions, etc., to prove the materiality of the information and the causality of the losses. The more complete the evidence is, the more conducive it will be to making legal statements and defenses.

Q3: What penalties will insider trading face?

In terms of administrative liability, according to Article 191 of the Securities Law, the person involved may be ordered to deal with the illegally held securities in accordance with the law, have the illegal income confiscated, and be fined not less than one time but not more than ten times the illegal income; if there is no illegal income or the illegal income is less than 500,000 yuan, the person involved shall be fined not less than 500,000 yuan but not more than 5 million yuan. In terms of criminal liability, according to Article 180 of the Criminal Law, if the circumstances are serious, the person involved shall be sentenced to fixed-term imprisonment of not more than five years or criminal detention, and be fined not less than one time but not more than five times the illegal income; if the circumstances are particularly serious, the person involved shall be sentenced to fixed-term imprisonment of not less than five years but not more than ten years. Civil compensation shall be calculated in accordance with the law on tort liability.

Q4: How long does it take from being investigated to getting the results?

An administrative investigation typically takes several months, and complex cases may take more than a year, with even longer periods involving multiple accounts and evidence collection from different locations. For suspected crimes, the criminal investigation, review and prosecution, and trial periods overlap. First-instance public prosecution cases are generally concluded within two to three months, and complex cases may be extended with approval. The entire process depends on the progress of evidence and procedures. Cooperating with the investigation and providing timely statements and defenses are usually conducive to the progress of the process, but the conclusion will still be based on facts and evidence.

Q5: What should I do first when I receive a survey notification?

Four steps to proceed: First, do not evade or destroy any information. Hiding or destroying evidence may result in harsher punishment; Second, sort out the communication records, transaction records, and work traces related to the case to form a complete timeline; Third, make legal statements and defenses within the statutory time limit and submit evidence favorable to oneself; Fourth, hire a professional lawyer as soon as possible to assess administrative and criminal risks and strive for mitigating circumstances such as voluntary surrender, confession, and plea bargaining. Never believe the saying that "using connections can smooth things over".

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

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

Disclaimer: This article is compiled based on the current effective laws and regulations and publicly available adjudication rules, and is 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.