On the afternoon of May 29, 2025, the 4th session of “Criminal Defense Talks” hosted by Criminal Department II was successfully held in King&Capital Law Firm. The event was respectively presented by Mr. Meng Fan and Mr. Xu Ming, partners of King&Capital Law Firm, and Mr. Liu Lijie, senior partner of King&Capital Law Firm, and moderated by Mr. Zhang Di of Business Management Department.
Meng Fan
Lawyer Meng Fan firstly analyzed the trend of securities-related crimes. Since the notice of the General Office of the Central Government and the General Office of the State Council on comprehensively and strictly combating securities illegal and criminal activities in 2021, the crackdown posture has continued to tighten, and the number of securities criminal cases nationwide has surged. 2022 to 2024, prosecutors nationwide indicted a total of 366 cases of securities crimes and 1,011 persons, with an average annual increase in the number of cases by 30.5% and the number of suspects by 16%. Beijing, as one of the national case bases for securities crimes, had nearly three times as many cases in 2024 as it did in 2022, with insider trading crimes accounting for 56% of the total, the main crime in securities crimes.
In insider trading crimes, the defense space runs through all aspects, while the co-crime forms are diverse and the boundaries are blurred. Attorney Meng Fan focused on the analysis of the joint criminal identification problem when the person who illegally obtains insider information transmits the information at multiple levels, and she pointed out that the judicial interpretation stipulates three types of persons who illegally obtain insider information: illegal means type, specific identity type, and active liaison type, of which the latter two types adopt the presumption rule, and the defense is more intense.
For the treatment of second-hand and above information receivers, there is a difference before and after China's tougher crackdown on securities crimes. Previously, based on the principle of modesty of criminal law, usually the second-hand, third-hand receivers and passive receivers are not criminally dealt with; after the strict crackdown, they are dealt with differently, and the illegal means type may be dealt with as a joint criminal offense if the underling knows that the means are illegal and conspires to do so. Passive type to obtain insider information personnel, if with the passer has criminal intent contact and implementation of the transaction, the current may also constitute an accomplice. This shows that the current insider trading joint criminal identification standards and return to the traditional joint criminal identification standards.
Meng powder lawyer combined with the case to explain, in the insider trading joint criminal determination, need to pay attention to whether there is a common criminal intent and behavior, such as there is a common criminal intent embodied in the prior conspiracy - how to obtain insider information, how to share the proceeds of the common behavior is embodied in the - - buy stocks together, after the fact, the proceeds of the common behavior is embodied in the - - buy stocks together, after the fact. -Buying stocks together, distributing the proceeds afterward, and so on. She emphasized that defense lawyers should grasp the details of the evidence in individual cases and intervene as early as possible to help the parties sort out the legal relationship and avoid excessive sunk costs for the parties. For example, the client in the case insisted on a wrong defense when questioned by the public security authorities because he did not seek the help of a professional lawyer in time, and eventually became passive. She suggested that the parties should listen to professional lawyers' advice at an early stage to minimize risks.
Xu Ming
Lawyer Xu Ming believes that insider trading criminal defense is difficult and has fewer successful cases. He first analyzed the policy dynamics of criminal justice in the capital market, the central strategic plan mentioned “zero tolerance”, “rule of law”, “coordination”, “bottom line” principle, “zero tolerance”, “rule of law”, “coordination”, “bottom line” principle, “zero tolerance”, “rule of law”, “bottom line” principle, and “zero tolerance”. The central strategic plan refers to the principle of “zero tolerance”, “rule of law”, “coordination” and “bottom line”, and the “New Nine Articles” emphasizes the strict crackdown on securities crimes, precise pursuit of responsibility, and continuous increase in the pursuit of responsibility for the “key minority”.
In insider trading cases, the logic of presumption is the core difficulty of defense. According to the 2012 judicial interpretation, illegal access to insider information, including illegal means type, close relatives and close relationship type, contact contact type, the determination of the transaction of obvious abnormalities involves the flow of funds, information flow, transaction flow and other dimensions, and the determination of the Securities and Futures Commission has a certain degree of subjectivity, the defense is difficult to overthrow.
Xu Ming pointed out through the case, the defense of insider trading can be developed from various angles. For example, questioning the materiality and non-publicity of the insider information, or proving that the person involved in the case is not a knower of the insider information, or denying the fact of liaison contact, as well as arguing the reasonableness of the trading behavior. He emphasized that charts and other tools should be used in the defense to compare trading habits, flow of funds, etc., so as to refute subjective determinations with objective data. In addition, the determination of common insider trading needs to be cautious, and cannot be presumed to be established as an accomplice simply because they all contacted the informant, but need to have clear evidence of conspiracy.
He also mentioned that the justification defense is often rejected in practice, but still has value in specific cases. For example, if solid supporting materials can be provided to prove that the transaction was based on disclosed information or professional judgment rather than insider information, it may become an effective defense. According to Xu Ming, insider trading defense needs to combine policy developments, legal regulations and case characteristics to flexibly apply strategies, while paying attention to communication with public prosecutors and lawyers to strive for favorable results.
Liu Lijie
From the theoretical basis of criminal presumption, Mr. Liu Lijie discusses the deciphering method of presuming subjective intent in insider trading cases. He pointed out that criminal presumption needs to have three elements: factual basis, logical connection and beyond reasonable doubt. The presumption of subject and behavior in insider trading cases may involve double presumption and logical loopholes, and the defense can question its reasonableness from the theoretical foundation.
In practice, jumping out of the traditional defense framework, build a new factual logic, is an effective way to crack the presumption. Mr. Liu Lijie shared a case of insider trading, the defense constructed a different factual logic from the accusation by suggesting that the listed company may have manipulated the stock price, successfully created doubts, and eventually fought for the legal space of bail and non-prosecution. Attorney Liu Lijie emphasized that a successful defense needs to tell a more complete and logical story than the prosecution. In insider trading cases, the defense needs to extend the timeline, trace the causes and consequences of trading decisions; reorganize the chain of evidence, with trading habits charts, timelines, stock price fluctuation trends, industry analysis reports and other objective evidence to break the “contact that is informed” subjective presumption; implant reasonable doubt, put forward the “third-party Information source”, ‘short/good trade deviation’ and other possibilities, to break the unfavorable presumption. Liu Lijie especially reminded the client should avoid blindly trusting the “mysterious power” and “relationship operation”, which will delay the best time for risk resolution, and at the same time called on criminal lawyers to adhere to the principle of professionalism and rule of law in the defense of securities crimes, based on facts and evidence, and to maximize the protection of the client's legitimate rights and interests. At the same time, we call on criminal lawyers in the defense of securities crimes, adhere to the principles of professionalism and the rule of law, based on facts and evidence, to maximize the maintenance of the legitimate rights and interests of the parties.
Activity Scene
The fourth session of “Criminal Defense Talk” was successfully concluded in a warm atmosphere, which provided in-depth thinking and practical experience on the defense of insider trading cases, and the three lawyers shared both theoretical and practical cases, which is an important reference value for improving the defense level of insider trading cases.
