As obtaining evidence of insider trading becomes increasingly difficult, following a recent string of investigations into a number of similar cases, it is difficult not to question whether the investigations are simply a lot of hot air.
Recent cases that have attracted attention include that of Credit Suisse Group AG Taiwan branch president Elsa Chiu, who was accused of trading shares through shell family accounts. Then there was the case of Puppetmotion Entertainment, a subsidiary of Pili International Multimedia, whose majority shareholder, Chinatrust Financial Holding, was accused of limiting losses before the release of bad news. Finally, the director of Integrated circuit supplier Novatek Microelectronics Corp, surnamed Lin, was accused of leaking inside information. In all these cases — and there are other examples too — the investigations were eventually closed and non prosecutorial depositions were made.
One ruling not to prosecute that attracted particular attention involved the purchase of Hermes Microvision Inc by Netherlands-based ASML and several high-profile merger and acquisitions including the merger of Advanced Semiconductor Engineering Inc with Siliconware Precision Industries Co Ltd. The case centered around Chiu.
Photo: Liao Chen-huei, Liberty Times
照片：自由時報記者廖振輝攝
Two years ago, while conducting a meeting on the telephone in her bathroom, Chiu’s husband Hsu Yaoren was secretly listening in on the other side of the door and gleaned insider information. Off the back of his wife’s phone call, Hsu secretly purchased stock in an arbitrage transaction, and in doing so implicated Chiu in the insider trading lawsuit. The Taipei District Prosecutors Office passed up on two previous opportunities to prosecute Chiu, eventually issuing a formal indictment last month.
Due to a previously unclear definition of what constituted insider trading, in the past there was a low conviction rate for prosecutions. The Legislative Yuan sought to address this by amending the law in May 2010 to clarify the definition of insider trading. Prosecutors are now no longer able to rely on a tip off by a whistleblower as the basis for opening a prosecution, as was previously the case. Instead, prosecutors must first obtain circumstantial evidence before they are able to pursue a prosecution. This has indirectly led to a situation where prosectors now often find it difficult to find the necessary evidence to initiate a case. Even if prosecutors have been able to establish the objective fact that an individual has purchased stock that was then sold later at a higher price — or dumped stock to avoid sustaining losses — if they are unable to provide evidence that connects the transaction with the receipt of insider information, thereby establishing mens rea (knowledge of wrongdoing), it will be difficult to achieve a successful prosecution.
Following two non-prosecutions of Chiu by Taipei District Prosecutors Office, after a two-year investigation, the individual who was finally charged was not an insider or a quasi-insider of the company. Instead, it was Chiu’s husband Hsu, who admitted to obtaining insider information by secretly listening to his wife’s phone conversation and then using this information to purchase stock. Since Hsu was the recipient of the information, in the eyes of the law, he was solely responsible for carrying out the offense. Hsu also confessed that he suggested his unwitting mother should be used to purchase the shares. Since prosecutors could only prove mens rea by relying on Hsu’s statement, they found it difficult to prove the same for engaging in insider trading on the part of Chiu and her mother-in-law. As a result, both individuals were able to walk free.
(Translated by Edward Jones, Taipei Times)
隨著內線交易的犯行舉證愈趨困難，近來檢方偵辦類似案件時，難免被質疑雷聲大、雨點小。
近來較受矚目的案例包括瑞士信貸台灣區總經理邱慧平被控利用人頭買股案、霹靂國際子公司「偶動漫」的大股東中信創投被控在利空消息曝光前避損、IC設計公司凌耀科技被收購過程中林姓董事被控洩漏內線等案，最終都以不起訴處分作收。
其中較受矚目的不起訴確定案，莫過於曾一舉包辦荷蘭商ASML收購漢微科、日月光與矽品合組控股公司等重量級併購案的邱慧平，兩年多前她在自家廁所進行電話會議，卻被丈夫許耀仁隔著門偷聽到內線消息，許耀仁背著邱慧平私下買股套利，連帶使邱慧平受牽連而惹上內線交易官司，台北地檢署曾兩度不起訴邱慧平，直到今年十月不起訴確定。
有鑑於過去內線交易的認定不夠明確，以致定罪率偏低。立法院於二○一○年五月修法，將內線交易的認定明確化，檢方辦案無法再像修法前，僅憑有人檢舉便當成起訴依據，必須「確實舉證」才能認定，間接也導致檢方辦案常面臨舉證困難的窘境；即使掌握被告有買股套利或賣股避損的客觀事實，但若無法舉證被告是接受內線消息才進場交易的主觀犯意，縱使起訴也難成罪。
以兩度獲北檢不起訴的邱慧平案為例，此案調查兩年多，最後被起訴的被告，不是公司內部人或準內部人，而是因承認偷聽邱慧平講電話才獲知內線並進而買股套利的邱夫許耀仁，作為「消息受領人」的許耀仁，一肩扛下罪責，指自己另建議不知情的母親跟進買股，最終檢方只能憑許耀仁的自白證明其「主觀犯意」，至於邱慧平及她的婆婆，因檢方難證明有涉內線交易的主觀犯意，成功擺脫官司。
(自由時報記者錢利忠)
Follow up
讀後練習
Insider trading
Insider trading occurs when an individual or individuals with access to non-public information about a company use this information to trade the company’s stock or other securities such as stock options or bonds. The trading of a company’s shares by “insiders” such as company employees is allowed, so long as they do not make use of information that is not in the public domain as the basis of their trade.
In many countries insider trading is illegal because it corrupts the basis of a free and open market, whereby all investors have access to the same information.
Arbitrage
Arbitrage means buying a security in one market and simultaneously selling it in another market at a higher price in order to profit from the temporary difference in prices.
In the stock market, a trader using an arbitrage strategy would purchase a stock on one stock market, for example the TAIEX, and then immediately sell the same stock on another stock market, such as the NYSE, where the price has not yet adjusted, in order to make a quick profit.
(EDWARD JONES, TAIPEI TIMES)
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