On March 8, 2025, Zhang Jun, President of the Supreme Court, made a working report at the two sessions, especially in the chapter on criminal offenses, with special emphasis on “zero tolerance” attitude to punish financial fraud, insider trading and other securities and futures crimes. “When a cockroach is found in the house, it means that there have been 1,000 cockroaches”, President Zhang Jun's report indeed highlights a microcosm of the previous chaos in China's securities market. Some listed companies, celebrities, financial fraud, misrepresentation and other cases, a serious exposure of the poor quality of enterprises through the fraudulent fraudulent financing disorder. It is for this reason that the state has made the determination to scrape the bones and heal the poison, adopting a “zero tolerance” attitude towards insider trading, misrepresentation, market manipulation and other criminal acts in the securities market, and punishing them severely and severely.
The party in this case, X, is a top university in Beijing, the Department of Finance students, the pride of God, once graduated into the well-known securities firms, and soon became the industry's financial leader. After a few years of work, X for the next level, so decisively choose to leave, set up an investment company. Due to X's professional understanding of the securities market, business tycoons from all walks of life have entrusted their investments. With the fermentation of word-of-mouth, X's company's business is also climbing, everything is developing in a good direction, and X and his family are looking forward to a bright future. However, on a certain day in July 2024, X Mou, who was in Beijing, was suddenly taken away by the police of a foreign city, and everyone was puzzled.
First, the Ministry of Public Security instructed to make an inter-provincial arrest
After X was taken away by the police, his wife suddenly received an unfamiliar call while she was teaching at school, only to hear the other end of the phone say, “I am the X city economic investigation police, your husband X has been detained by us for suspected insider trading.” Suddenly suffered a disaster, X's wife was immediately in anxiety, but as a highly educated molecule or to maintain the basic rationality. After asking around, it turned out to be a well-known business tycoon had entrusted X investment, and bought a large number of shares of a listed company. The business tycoon has long been talked to by the Securities and Futures Commission (SFC), the action is the SFC joint enforcement of the Ministry of Public Security, with “zero tolerance” attitude to investigate the billions of dollars of turnover involved in insider trading crimes.
Upon learning that X had been designated for residential surveillance by the public security authorities of X city, X's wife immediately commissioned a local attorney to file jurisdictional objections and applications for interviews with the authorities handling the case, but several of the applications were rejected. Is the jurisdiction correct? Why was the residence under surveillance? How can we meet with her, and will she be forced to make a confession? How can X be rescued? After being frustrated, X's wife found Zhou Wenda and Pan Nanyu from Beijing King&Capital Law Firm after consulting with them, and decided to appoint them to represent the case.
After receiving the case, the two lawyers immediately put forward professional advice, a jurisdiction objection is futile, due to the securities and futures crime cases of professionalism, cross-regional, the two high a long time ago jointly issued the “on the ministry of public security securities crime investigation bureau directly under the sub-bureau of the application of criminal procedure in economic crime cases several issues of notice”, the ministry of public security has the right to designate the sub-bureau of the cross-regional jurisdiction of the case. After detailed analysis, Zhou Wenda and Pan Nanyu believed that on the one hand, X did not belong to the knowledge of insider information, on the other hand, the source of insider information was doubtful, so the fact that there was insufficient evidence to determine the crime of insider trading, then initially determined a “rapid meeting, digging deeper into the case, investigating and collecting evidence, and proactive communication” of the innocence of the defense strategy.
Second, the meeting was blocked, and the defense overcame the difficulties.
Under the designation of the Ministry of Public Security, the X City Branch Office investigated the case, the local police attached great importance to the establishment of a task force is bound to make this case a typical case of “zero tolerance” for securities crimes in the country. Despite the enormous pressure, the two lawyers still went to the location of the case.
1. Residence under surveillance, meeting was refused
After meeting the police officer, the two lawyers asked to meet with the client, the police in the receipt of the entrusted procedures to wait for notice as an excuse not to allow lawyers to meet. In the communication, the lawyer only found X was detained in the local investigation office, the police not only violated the lawyer's right to meet, it is a violation of the criminal procedure law shall not be implemented in the custody of the provisions of the residence under surveillance, is a serious violation of the law.
2.Overcoming difficulties, finally met with
Zhou Wenda, Pan Nanyu lawyers believe that residential surveillance can not be a reason to prevent lawyers from meeting. So immediately form a written lawyer's opinion, respectively to the higher public security organs, procuratorial organs, the political and legal committee, the judicial bureau, the local lawyers association and other departments to put forward the opinion, sparing no effort to go around, insisting on meeting with the client.
The two lawyers continue to insist, each department in turn supervision, finally caused the police to not allow lawyers to meet the attention. In the local procuratorate investigation supervision section of the organization, the two lawyers and the police officer in charge of the face to face communication with the meeting time, place and other specific ways. The case officer jokingly said, “You are the first lawyers allowed to meet with each other, and we have no experience in arranging lawyers to meet with each other before.” However, the two lawyers said that meeting with lawyers is the legal right of lawyers, and hoped that in the future such cases can allow lawyers to meet with lawyers, the police and lawyers need to respect each other, and work together to promote the fair handling of the case. Since then, the two lawyers and the police officers handling the case have continued to maintain positive communication, laying a friendly foundation for the subsequent defense work.
Third, active evidence collection, successful bail
In the place arranged by the police, the two lawyers finally met the client who was under residential surveillance. X Mou gave a detailed account of the causes and consequences, but thought that he bought the stocks of a listed company only with reference to some information, but still based on his own professional knowledge and professional judgment. For X's defense, the lawyers explained that this kind of defense is usually still presumed to be the use of insider information, and at the same time, they learned that X did not obtain the information by illegal means, but rather, he saw a listed company's discussion about “restructuring, acquisition” and other information on the website of a stock bar. The two lawyers keenly captured this key information, and believed that even if X had abnormal trading behavior during the sensitive period, as long as it could be proved that the source of the “insider information” belonged to the public way, it could be proved that X did not belong to the knowledge of the person who did not illegally obtain the information, and there was a possibility of innocence.
In order to avoid the loss of key evidence, the two lawyers first time to log on the official website of a stock bar, and patiently searching in the massive amount of information. In the next few days under the needle in the haystack, still nothing, but the lawyers do not doubt the details described by X, so find professional investors finally found in the stock bar website inconspicuous position of the comments. In addition, the two lawyers to collect further, and again found that as early as the “insider information” sensitive period, there have been shareholders began to discuss a listed company may be “acquisition, reorganization”. Soon, these evidence in the notary public notary witness, were notarized deposition. With the support of objective evidence, which breaks the presumption of insider trading criminal subject laid the foundation.
However, as X is still under residential surveillance, should the notarized certificates be submitted now? If the timing is not right, it will instead lead the police investigation in an unfavorable direction. A professional criminal defense attorney needs to anticipate all aspects of the possibilities in place to prevent uncontrollable factors. Considering that the residence under surveillance can last up to 6 months, the later meeting may be even more difficult, the two lawyers believe that if they continue to wait, the defense will become more and more difficult. So, immediately formed around the public certificate does not constitute a crime defense. In the process of communicating with the police officer, the two lawyers expressed doubts about the source of “insider information”, and took out the prepared notary certificate, emphasizing that X did not obtain “insider information” through illegal means, and hoped that the police would focus on the objective evidence, and not to give away I hope that the police will focus on objective evidence and will not jeopardize the future of a top financial talent, a good investment enterprise is just on the right track and cannot go bankrupt because of this, so I suggest that Mr. X should be released on bail pending trial first.
The police officer attached great importance to the two lawyers' opinion of innocence, and kept reviewing the notarized certificate, stating that he would check the authenticity of the evidence, but the case involved many people and a huge amount of money, so he had to ask for instructions from the relevant leaders. See the case officer sincere reply, the two lawyers are quite pleased. Thereafter, the lawyers continue to keep in touch with the case officer, repeatedly communicating the lack of evidence, dispel all kinds of concerns about bail pending trial. Finally, after two months of residence under surveillance, X was released on bail pending trial, his family from Beijing rushed to X city reunion. After this hiccup, X's life returned to its original trajectory.
Disclosure of information and conclusion of the case without charge
Although X has been released on bail, many other co-defendants in the case are still under residential surveillance, how to stop the criminal investigation of X? The lawyers repeatedly expressed their opinion to the police officer in charge of the case that the case should be dismissed, but the police refused to do so on the grounds that the case still needed to be investigated.
The lawyers realized from their conversations that the police had revealed that this was a special case assigned by the Ministry of Public Security, and that the pressure to handle the case was so great that the direction of the case could not be changed easily. If you want to dispel the police's case concerns, you need a strange move to break the situation, but what exactly is this strange move? Through repeated arguments, this case is the execution of the conversion, the SEC transferred to the Ministry of Public Security may have been made before the Letter of Determination, so it is also necessary to go back to the source, find the SEC to understand the ins and outs of the case. Therefore, the two lawyers decided to apply directly to the SEC for the disclosure of government information, requesting the SEC to disclose the circumstances of the investigation and punishment of the Determination Letter, including the facts and reasons, the punished persons, the punishment results, etc., and at the same time, emphasizing the causes and consequences of X being innocently implicated in the case. In the communication lasted 1-2 months, the SEC finally replied in writing, informing the administrative investigation process, penalty results are not related to X. At this point, the two lawyers finally ate a pill of peace of mind.
Considering the large number of people in this case, it is unlikely that the entire case will be dismissed, but the investigation can be terminated for X someone. So, the two lawyers quickly formed a termination of the investigation of the written lawyers, to the police case center. After detailed communication of the termination of the investigation of the defense, the police officer in charge of the case learned that this is the SEC issued a reply to the opinion of great importance, they further invited out the investigation of a department captain to meet with the lawyers. Both sides in the spirit of truthfulness, objectivity and neutrality of the perspective of in-depth exchanges, the police said they would verify the evidence, the lawyer's opinion will also be discussed through the case.
On a day in February 2025, X Mou finally received the “Termination of Investigation Decision” made by the public security organs, stating: “...... insider trading case, X Mou has no criminal facts, according to the ‘Public Security Organs Handling Criminal Cases Procedural Provisions,’ the provisions of the second paragraph of Article 183, it is now decided to terminate the investigation of X Mou's investigation.”
In the end, the case reaped the harvest of innocence, the two lawyers overcame the resistance finally completed the mission of the defender, so that X Mou is no longer subject to the limitations of the criminal process, the cocoon is reborn. At the initial meeting of the lawyers, they encountered strong resistance, which also reflects the difficulty of the defense of the case of residence under surveillance, but King&Capital lawyers, no matter what difficulties and obstacles encountered, the belief has never changed. Based on the love of criminal defense, as well as professionalism and dedication, the two lawyers will definitely do their best for their clients in every case.
