"Criminal law of rat" crime

 Master Nie Chengtao lawyer law at Beijing Normal University

(Beijing City, Tianhe law firm, Beijing 100101)

 Abstract:The securities market in our country to flourish at the same time, all kinds of illegal behavior also emerge in an endless stream, "rat" at this stage has become rampant, should be included in the scope of criminal penalties. "Criminal law amendment " clearly defined the "rat" criminal responsibility shall be investigated the behavior of human. "Rat" are the main causes of fund sale system has defects, lack of legal norms, regulatory loopholes, the internal control system is not perfect, the punishment is not strict etc.. In order to solve the problem from the source, we should improve employees' ethical and legal awareness, improve the legal system, strengthen the supervision of the crackdown, strengthen internal control measures, the reversal of the burden of proof in such aspects as the.

 Key word."The function of criminal law control system composed of rat" crime

 

 

First, introduced the case

One case: March 5, 2008 SOOHO net financial news reported: "Tang Jian South Baoyuan bond, the selected components of the south two funds of the fund manager Wang Limin and Morgan Growth Fund pioneer the fund manager, on suspicion of 'the rat' by the CSRC shall impose administrative penalties for market forbidden."[1]The report says, Wang Limin and Tang Jianjun use lineal relatives and three party account of stock trading profit, and in the SFC to expose a survey earlier this year, was under investigation. The CSRC respectively in March 27, 2008 and April 8th of two people to make the punishment, in addition to being a lifelong from entering the market, two people were confiscated of the illegal income of about 1500000 yuan. Tang Jian "Mouse Storehouse" event in 2007 May One's criminal conspiracy was unmasked., Tang Jian in May 16th of the year by the fund to dismiss. Since then, the supervision department of the fund industry about the alleged breach of the personnel in the survey.

Case two: in April 13, 2009 the formal registration only 47 working days, the Commission completed the fund management company limited the fund manager Zhang Ye "Mouse Storehouse" investigation and trial. The Commission decided to cancel the Zhang Ye fund qualification, confiscate the illegal income 2294800 yuan, and impose a fine of 4000000 yuan, while the lifetime of market. The fund is also the CSRC fund of the ministry ordered the rectification period of 6 months.

In April 9, 2009, the media exposure of mysterious "Zhou Qiang" several leading retail fund to buy and sell a thing, cause the Commission attaches great importance to see media reports, in an hour, regulators launched an informal survey of the case. 4 days later, on the financing case formally file. "Zhou Qiang" account is a big Zhu Xiaomin control, while Zhu Xiaomin control of this account, and operated by Zhang Ye. From 2007 to 2009 in February, Zhang Ye used his position to facilitate the acquisition of private fund investment and recommendation of information, through the network to place an order way, engage in stock trading for Zhu Xiaomin operation "weeks Qiang" account, before a wild management finance company 100 index fund, financing fund to buy or to finance company funds sold related stocks, "Zhou Qiang" account profit 9398400 yuan, 2000000 yuan fee charged Zhu Xiaomin thanks. Investigation shows, Zhang Ye "Mouse Storehouse" the stock a total of 9, including Dongfang Electric, Chongqing beer, Huayi Electrical, Jianghuai engine, CITIC Securities, China Merchants Bank, Hainan sea, Jiangxi cement and 川化股份.

In the survey, regulatory authorities also found a wild illegal stock trading behavior. From 2006 December to 2007 July, Zhang Ye through the network to place an order, the operation of his wife Sun Zhijuan's account of the transaction, relates to development, investment, Hunan Huadong medicine, Laiwu Steel, CSG A, Wuhan Iron and Steel shares, the new base, the new lake venture, Chongqing Three Gorges A, Zhongchuang xince, COFCO Property, CYTS Chongqing beer such shares, profit of 2294800 yuan for this account.

Zhang Ye's "rat" is against the wind to the build up of the. 9 stocks involved in the "rat" transactions, there are only 5 transactions occurred in 2008 3, April years ago, the remaining 4 trading occurs at this point after.

In case a, the SFC in the period of Wang Limin, Tang Jian "Mouse Storehouse" case to make the administrative punishment. As the fund practitioners, serious processing results of the two case can't be heard. The administrative punishment Tang Jian sent only 20 days, Zhang Ye from April 28, 2008 to May 22nd, the use of "Zhou Qiang" account transaction Dongfang Electric, buying, selling a total of 98000 shares. In April 30, 2008, financing the leading growth fund to buy the stock; on June 10th to 11, financing power pioneer fund to buy the stock. Since then, Zhang Ye has successively in 2008 December, 2009 January and 2009 February traded 川化股份, Jianghuai engine and Jiangxi cement. If the crime against the wind section shows Zhang Ye's act recklessly and care for nobody, so servers move, further to a wild to lose all standing and reputation.

In January 26, 2002, China Securities Regulatory Commission Hangzhou special office and the Zhejiang securities and Futures Industry Association held in Hangzhou securities and futures executives from moral training class, a wild "from the introduction of related to the securities and futures practitioners moral case embarks, elaborated emphatically credibility is the foundation of the securities market, the lack of credit is one of the securities market anomie source view." He knows the securities and futures business ethics is credit, and then not be a model for others, and finally end up this way. The last time Zhang Ye "Mouse Storehouse" trading ahead of the "rat" behavior into criminal law amendment specification range "(seven)" in force only 10 days, and thus the escaped criminal sanctions, but the aforementioned, the occupation career has been added to erase the stain.

More than two famous cases, from 2007 onwards, the fund industry average annual exposure to the fund manager "rat", and in 2009 the supervision department supervision in this regard is obviously strengthened. The Commission was informed that, in 2009, a total of audit of 13 fund companies, the punishment of 14 employees, including 2 general managers, 4 deputy general manager, 4 inspectors, 4 Fund managers. The joint meeting President Shang Fulin in 2009 October thirty-second fund industry first proposed three line not violated the development of fund industry: "rat", not even bargain and the interests of transportation. A series of tough regulatory attracted enthusiastic attention of public opinion, but also set off a wave of regulatory upgrades storm in the industry. The fund within the discipline, strict compliance have reaffirmed the lineal relatives investment stock report system, the investment research department provided with camera, strengthen the management of the network, but also remember for research on new computer hard disk.

Supervision departments investigate and deal with "the determination and strength of rat" to the outside world the applause, but also to see the stock market, fund managers is the old problem has existed. The four "rat" in 2009 and not the fund industry's first, it won't be the last batch of, how to strengthen the monitoring and control system, strengthen professional manager occupation ethics, scientific and effective to prevent the "rat", we still have a long way to go.

Two, the "rat" meaning and social harmfulness

1, the "rat" meaning

The so-called "rat", namely the securities market "rat", refers to the fund manager or institutions of capital control of the use of public funds to buy before, pulled a stock, first with personal funds or relatives and friends, relations between the households money buying low the stock (i.e. Jiancang, wait to use) public funds will be pulled up to the high price, will be the first to sell individual positions to profit, and institutions (public) and retail funds and could therefore be locked. This problem is the use of insider information and operational funds occupation advantage stock speculation, suspicion of tunneling and insider trading.

"Mouse Storehouse" is essentially a kind of public funds into private funds, however, this way has the nature of concealment, not easy to be aware of. Occupation managers driven by interests, at the expense of violation of the principle of good faith, so as to make this kind of behavior, it not only damages the interests of fund holders, serious will also cause the loss of services. This behavior appears already in the stock market, our country has private equity fund (also known as "underground fund") has four forms, one of which there are "rat", the other three forms: brokers, fund services or Consultants Co, investment companies.

Compared to the past "Mouse Storehouse" problem and the manipulation of securities and futures market, insider trading, illegal fund-raising and other issues, and is not very serious, serious. But things are different now, "the harm degree rat" has no less than the latter, therefore, "Mouse Storehouse" problem has received more attention, also should be included in the scope of criminal penalties. According to the "Securities Law" 152nd stipulates: "the board of directors, supervisors, senior management personnel failed to diligence, there are serious violations of laws and regulations in the securities company or major risk, the securities regulatory authority under the State Council may revoke its qualification, and shall order the company to replace." At present, on the "rat" are generally carried out administrative punishment on the basis of this, although the "criminal law amendment " has been included in the adjustment range of criminal law, but not on the conduct of criminal punishment cases.

2, the "rat" social harmfulness

The securities market of our country and the developed countries started relatively late, and the fund company as an institutional investor appeared more late. First, the stock market downturn, investors in the securities investment enthusiasm is not high, the fund's investment enthusiasm, the scale of the fund and the fund investment returns are very low, and did not rise to the interest of investors. At this point, "Mouse Storehouse" temptation is not, even if there is a certain degree of "rat", due to its small scale, low profit without causing great harm to the stock market, the external not focus on, not even the concept of "mice storehouse". However, at this stage, China's securities market entered a period of vigorous development, people's investment enthusiasm rising, fund scale expands fast, in the face of great temptation of interest, some fund managers began to rush into danger, will the law of punitive cast be flung to the four winds, the regulatory loopholes and deficiencies, to reap huge profits, with great the public offering of the fund as the backing, engaged in the "rat" illegal behavior.

The fund manager's income is much higher than that of the general staff, although the occupation pressure, but the rich income should be said to a considerable extent satisfy the thought and the pursuit of material. In the high income, if still have insatiable desires, using "illegal rat" this deliver profits, profits, which are driven by individual desire.

"Mouse Storehouse", a clear violation of the securities market open, fair and impartial principles. According to the relevant provisions of the "Securities Law", "rat" is a kind of insider trading acts prohibited by law, because of its use of funds advantage, information advantage influence stock price and belongs to a kind of market manipulation, but also because of the use of public funds for their own or their relationship a profit and belongs to a kind of fraud behavior of customers.[II]

"Mouse Storehouse" existence, serious damage to the legitimate interests of the fund investors. Fund investors will own the funds entrusted to the fund managers, fund managers from investor expectations of its own interest, using the securities investment knowledge acquired, faithfully perform their fiduciary financial obligations, as much as possible to create income for property investors. However, if the fund manager Dajian "rat", at this time, positions were the first consideration is no longer the interests of fund investors, but their personal interests, when two kinds of interests conflict, they are more likely to damage the interests of investors as the price, to maximize the pursuit of personal interests, this is human nature. For fund investors, "rat", making them into the fund's money, seemingly to investment, but in fact is to increase their investment cost, eroding their investment income, it may even make their investment capital of no return.

The fund company as a business, is bound to the pursuit of profit maximization, and "rat" behavior, in the damage of investors at the same time, will also become the stumbling block to fund companies realize the profit maximization goal, causing investors and fund corporations "lose lose". It is not difficult to imagine, a breed of "rat" fund companies, not only will lose the trust of investors, investors will not funds entrusted to the corporate finance, will therefore let your profit target is not effectively implemented. If things go on like this, the fund company prospect is be placed in jeopardy. "Mouse Storehouse" is the microscopic events, but if it is banned repeatedly more than, from time to time appear, the lost will not only is the trust of investors for some fund managers, fund companies, are more likely to jeopardize the whole securities industry trust, which affects the healthy development of China's securities market.

Three, the "rat" into the scope of the criminal law of necessity

As everyone knows, the scope of criminal penalties is reasonable, not all acts harmful to society should be subject to criminal punishment, because the criminal law is complementary, "even in matters relating to public safety regulation, also only in other means such as habit, moral sanctions that regional social informal control or civil not well, in order to launch a criminal."[3]This is decided by the function of criminal law institute. We know, criminal law has three functions: (1) the standard function, refers to occur through the criminal law effect; (2) protection function, the guarantee function of criminal law; (3) protection function, the utility that criminal law protection to the society.[4]In other words, at the same time, the criminal law in punishing crimes and protecting human rights, which is the purpose of the criminal law.

Specific to the "rat" behavior, although it has existed a few years ago, but in the past, its social harmfulness is not very serious, the main reason is the frequency is small, the impact of the stock market is far from other behavioral manipulation of the securities futures market in the. In addition, the criminal law is not perfect, and not the crime, according to the requirements of the principle of legality can not be convicted or punished.

So this behavior is not included in the adjustment range of criminal law of necessity? The answer is in the affirmative. Of course, from the point of view of the stock market by the extent of the damage, to launch means of criminal punishment must be considered a problem, namely for the securities market order violations, must arrive what degree is the use of criminal punishment. We usually think of the social benefits, only those who cause serious damage or threat, beyond the scope of social acceptable behavior, only then can become the criminal law on the crime of criminal law, will be prohibited and punished. The criminal law protection of legal interests as well as the contents of the society can tolerate, is accompanied by the evolution of social life and constantly changing, therefore, the adjustment range of criminal law also varies with the development of the society, it not only damages the seriousness of the criminal law, on the contrary, it is necessary for the criminal law has the character of advancing with the times. From the angle of criminology, criminal law should be timely to make some behavior of crime, the others act crime.

On what an act "is the administrative punishment or criminal punishment, shall be decided by social tolerance."[⑤]At present, the "rat" behavior has become the stock market "rat", has reached "mice crossing a street, everybody cries dozen" degree. This behavior does not know that the number of "Mouse Storehouse" magic became millionaires, billionaires, many enterprises suffer heavy losses, but insolvent. The practical example is events Delong, "said, at the beginning in 'rat' of a securities company executives relative profit of nearly 10 million, all cash, and the collapse of Delong shares at least two securities companies fail and many banks and other lost tens of billions of yuan." Can say, "rat" behavior has caused great damage to the stock market, has gone beyond the tolerance of society, to investigate its criminal responsibility degree, criminal law should be a criminal punishment on their.

Four, the "rat" crime of the criminal law

China's "criminal law amendment " revised 180th, increase the provisions of the criminal law to combat the "rat" crime. In recent years, fund companies, commercial banks, insurance companies, securities companies, Futures Company and other financial institutions have carried out the investment banking business or customer asset management business, the hands have a large number of customer funds, will the customer funds to invest in securities, futures and other financial products is one of the main Valet financial investment and customer asset management. This occurs as the "rat" crime provides convenient conditions. This kind of crime only administrative penalties have been unable to control the development of criminal law, it is necessary, in this context, the amendment the article 180th of the criminal law is amended as: "the personnel of securities, futures trading on inside information or illegal acquisition of securities, futures trading information staff, involved in the issue of securities, securities, futures trading or other securities, have a significant impact on futures trading prices information not yet publicized, buy or sell the securities, or engage in futures transactions associated with the insider information, or disclose this information, express, implied or others engaged in the trading activities, if the circumstances are serious, five years in prison or detention, or impose a single illegal income more than five times the fine; if the circumstances are especially serious, department for more than five years to ten years in prison, and the illegal income more than five times the amount of fines." At the same time, to severely punish the "rat" crime, amendment in the 180th in one paragraph is added as the fourth paragraph: "the stock exchanges, securities companies, futures exchange, futures Broker's Firm, fund management companies, commercial banks, insurance companies and other financial institutions employees and staff of relevant regulatory authorities or industry association, the outside position of insider information and other undisclosed information, in violation of the provisions, engaged in related with the information of securities, futures trading activities, express, implied or others engaged in trading activities, if the circumstances are serious, shall be punished in accordance with the provisions of the first paragraph." From the above provisions of law, we can draw the conclusion that the "rat" of the crime and the distinction between the related crimes.

(a) "characteristics of the rat" crime

1, the subject of the crime of this crime is a special subject. Generally speaking, asset management, financial institutions, practitioners can become the subject of this crime. While working in the securities, futures regulatory institutions or associations, also possible undisclosed information for position does not belong to the insider information, establishment of rat. Therefore, the amendment (seven) "Mouse Storehouse" the subject of the crime prescribed as "securities exchanges, securities companies, futures exchange, futures Broker's Firm, fund management companies, commercial banks, insurance companies and other financial institutions of the employees and the relevant regulatory authorities or industry association staff".

2, the perpetrators have "the outside position of insider information and other undisclosed information, in violation of the provisions, engaged in related with the information of securities, futures trading activities, express, implied or others engaged in trading activities". The so-called "insider information other undisclosed information", mainly refers to the asset management institutions, investment institutions will Valet customer funds to buy a stock, futures and other financial products decision information. Because do not belong to the legal provisions of the "insider", did not request must be open, so that the "insider information other undisclosed information". The so-called "in violation of the provisions, engaged in related with the information of securities, futures trading activities", trading not only include a ban on funds and other asset management institutions stipulated by laws, administrative regulations of securities investment fund law of practitioners engaged in harm the interests of customers, including the prohibition of personnel assets management institutions engaged in breach of fiduciary obligation transactions activities the SFC issued. The specific behavior mainly refers to, asset management institutions and practitioners in client funds to buy securities or its derivatives, futures or options contracts and other financial products, they buy first before selling, or selling behavior, his first.

Since April 1, 2009 the implementation of "guiding opinions on the management of the investment managers of the fund management company" (hereinafter referred to as the "guiding opinions" provisions of the code of conduct), investment management mainly includes: (1) investment managers shall safeguard the interests of the holders of fund shares. In the event of a conflict between the interests of fund shares holders and the company, shareholders and shareholders have relationship with agencies and individual interests, the investment manager shall adhere to the principle of giving priority to the interests of the fund share holders. Investment managers shall not use the fund property or the use of the fund shares management to any institution or individual transmit interests, shall not engage in or cooperate with others engaged in damage to the interests of the fund share holders' activities; (2) the provisions of the investment manager shall strictly comply with the laws, administrative regulations, Chinese CSRC regulations and the fundfunds contract, implement industry self-discipline rules and regulations of the company, not to fund performance rankings, boost the city, depress prices and other damage to the order of the securities market behavior, or any other illegal operations; (3) investment managers shall abide by the occupation ethics, abide by the fund share holders, regulators and companies to make a pledge, shall not engage in any the conflict of interests and fulfill the responsibilities of the activity; (4) investment management personnel should be independent, objective in performing their duties; (5) investment management personnel shall equally treat different fund share holders, fair treatment of the fund share holders and other assets to the trustee; (6) investment managers shall set up a long-term, stable, responsible for the fund share holders the idea, prudently sign and earnestly implement the employment Contract, termination of employment contract shall be justified; (7) investment management personnel should firmly establish the awareness of regulation compliance and risk control, strengthening the investment risk management, improve the level of risk management, prudent to carry out investment activities; (8) investment management personnel should strengthen learning, to accept the occupation training, be familiar with the relevant securities investment fund policies and regulations and the relevant business knowledge, and continuously improve the professional skills. Promulgated the "guidance" is to regulate the fund managers behavior, the essence is to prevent the occurrence of "mice storehouse".

3, "serious" to constitute a crime. If the circumstances are serious mainly refers to repeatedly establish "rat"; the "rat" illegal profit amount is huge, or as a "rat" caused serious loss of customer assets etc..

In practice, the "rat" criminals in their positions at the same time, often in direct or indirect way of relatives and friends also Jiancang, therefore, "the criminal law amendment " in the first paragraph of article 180th of the criminal law of the crime of insider trading are prescribed for the way also increased "or express, implied others engaged in the trading activity".

(two) we should distinguish the difference between the "rat" crimes and other crimes

The difference between the 1, and the crime of insider trading

One is from the information content, insider information is mainly around the listing Corporation's information, such as the company's restructuring plan, the company's executives, the company's major contract changes, the profitability of the company to the securities companies, futures market prices have a significant impact, in accordance with the relevant provisions should be timely to the public but also not public information; and "the rat" information belongs to the commercial secret within the unit, which belongs to the "insider information other undisclosed information"; the two is from the criminal damage interests, insider trading is not more damage to the public investors and shareholders of the legitimate rights and interests, "rat" deal more damage the interests of its clients asset management institutions.

The difference between the 2, and the manipulation of the securities and futures market crime

"Rat" behavior is mainly through the management of client money to take on more market risk so as to reduce the risk of behavior, behavior is to utilize the mechanism to buy securities, futures funds in customer information to forestall, early withdrawal of warehouse Jiancang profit from, subjective and no manipulation of the securities and futures trading prices objective; and the manipulation of the securities and futures market is mainly through the capital advantage, information advantage to pour out, or to influence the stock, futures prices or the volume, so as to achieve the purpose of profit. Therefore, the "rat" from both the objective and behavior, can not constitute crime of manipulating the securities and futures market.

The difference between the 3, and breach of entrusted property crime

Breach of entrusted property crime is the unit crime, the subject of crime is the criminal responsibility of financial institutions, financial institutions did not provide employees, mainly refers to the financial institutions to use the client money and property entrusted to the decision itself and the fiduciary obligation violation, which might make the management of client assets in great danger; and "Mouse Storehouse" is a kind of crime, the subject of crime is engaged in asset management agency employees, make asset management investment institutions to buy securities, futures decision itself does not breach of fiduciary obligation, do not belong to the unauthorized use of the property, the main blow is the asset management institutions and practitioners use information within the agency Jiancang advance seek illegal interests.

Five, the "rat" crime investigation

In our country, the stock market is a new market, despite these years of development, especially in recent years development is rapid, China's securities market from scratch, made brilliant achievement, but with the further development of illegal acts in securities market, a variety of also emerge in an endless stream, especially the "rat" the problem has the increasingly fierce potential.

The securities crime has deep social reasons, specific to the "rat" behavior is mainly based on the following reasons:

1, fund sale system defects. At present, the public offering fund, managed by the fund managers, fund custodians, securities investment activities by the method of portfolio. Fund can be operated in a closed, open or by other means. Between the fund manager, the fund custodian and the fund share holders of the fund contract is signed between the two sides, is a contractual relationship. According to the "securities investment fund law" provisions of article eighty-third, "the fund manager, the fund custodian in the performance of their respective duties, violation of the law or the stipulations of the fund contract, damage to the assets of the fund or the fund share holders, shall be respectively on their behavior in accordance with the law to bear the responsibility for compensation; such damage is caused by joint action fund property or the fund share holders, it shall bear joint and several liability." The fund manager, the fund custodian of engaging in illegal behavior undertakes only liability for breach of contract, we know that the liability for breach of contract is typically not compensation, punitive, it left a hidden danger for the illegal behavior, driven by profit, fund managers will rush into danger.

2, the lack of legal norms. The lack of legal norms embodied in several aspects, a large environment is the stock market in an emerging market in China is still, the emergence of various illegal and criminal behavior than we imagine, we are impossible to guard against these crimes. Although the legislative requirements of the law to have a certain forward-looking (or lead), have some to accommodate future violations of law, but legislators not to those who did not appear to act in the law made clear, even if there are provisions, is fuzzy, and not the practice of irregularities in the sensitive.

In addition, the lag of law also determines the delay of the securities crime punishment. At present, the laws and regulations to adjust to the fund market is not much, this also is the "rat" has sowed the seeds of.

3, the regulatory loopholes. The law, the securities regulatory authority under the State Council securities investment fund of fund managers, fund custodian and other agencies to carry out supervision, investigate and deal with illegal activities, and shall make a public announcement. In addition, the fund custodian discovers that the investment instructions of fund managers violating laws and regulations or the stipulations of the fund contract, it shall refuse to execute, immediately notify the fund manager, and promptly report to the securities regulatory authority under the State Council, which to some extent also play a supervision role.

"Rat" behavior is the fund manager or the fund's first personal funds to buy low a stock, wait until the use of public funds to the stock to pull high, the individual ownership to sell at a profit. General fund managers and their relatives and friends, relations, collusion, secretly. Therefore, the supervision of the secret on suspicion of insider trading behavior has no essential function.

According to the existing laws and regulations of securities regulation, practitioners of fund companies shall not engage in stock trading, and ID number and securities accounts of the fund manager to monitor the lineal relatives. However, although there are limitations of such laws and regulations, some fund managers in the face of great interest, unable to withstand the temptation, Dajian "rat", illegal transfer of benefits, and the reason is, "Mouse Storehouse" operation is very subtle, Jiancang by relatives and friends of the stock account, even false identity open stock account card, through private channels to pass from mouth to mouth way operation. In public, regulators have regulatory measures, but the "rat" in the community, there is the problem of asymmetric information, it is very difficult to understand by "relevant rat", coupled with the "rat" players generally has a strong professional knowledge and operation skills, even if regulatory measures powerful, then fully, it appears impossible to guard against, a fish escaped through the Seine, and investigate and deal with difficulties.

4, the internal control system is not perfect. The fund companies, in the fierce competition to survive and develop, fund manager good occupation quality, improve the company's investors internal management system, a high level of trust is an important factor. However, once the "rat", the interests of investors suffered losses, as the fund manager employers fund companies, it does not make people doubt its internal management system is perfect, whether it is worth the trust of investors.

In the second case, Zhou Qiang always before the Finance Department of the fund into the precise hunters, it involves many stocks, the time span of up to 3 years, the fund company, its internal control mechanism, why the failure? The CSRC has not revealed details of the investigation of the matter, Zhang Ye as a passive management fund of fund managers is how to know the specific details of the operation of active funds, and use this information to gain also can make nothing of it. Financing the company's internal management level and company executives personal abilities questioned.

Automatic control system of the fund company is divided into two parts, one part is the industrial and Commercial Bank of professional audit and supervision departments, is part of a fund custody department internal audit and supervision departments, and equipped with a full-time audit supervisory personnel, is in the general manager under the direct leadership of the "self", "control", "monitor" three control lines. The three firewall is not blocking the financing system inside the big mouse, insufficient internal control and management of the fund management company revealed the absence is indeed worrying.

5, the punishment is not strict. "Chinese Commission since its establishment has dealt with more than 600 administrative cases, transferred to the public security organs only more than 80, finally sentenced less. The Ministry of public security has 6 big securities crime investigation, found the highest penalty of not more than 3 years, in practice most of the cases was one or two years, many sentences or probation."[6]The punishment to the state caused by the thousands and hundreds of millions of dollars in contrast, is clearly inappropriate crime penalty, contrary to the principle of suiting punishment.

In addition, linkage between administrative enforcement and criminal justice is not enough, seriously restricted the evidence of public security organs. The SFC function only administrative supervision, no criminal responsibility. Therefore, under normal circumstances, the securities crime, it is the securities supervision and administration institution deal first administrative punishment, confirm to violate the criminal law, and then handed over to the public security organ for investigation. In this process, many of the key evidence may be destroyed, to the public security organs of the forensic work into a passive state. Because of evidence, which also escape penal sanctions for acts of help.

Six, "rat" behavior of the control

The above reasons for "Mouse Storehouse" of the problem, in order to control the "good rat" behavior, we must take a series of effective measures against illegal behavior, to control the problem from the source is the key.

1, serious social understanding the "rat" behavior harm, improve the moral consciousness of law practitioners. The securities crime is intelligent crime, does not have the high intelligent person is unable to implement this kind of crime, "Mouse Storehouse" behavior people admit of no exception whatsoever. Fund market elite, with a galaxy of talents, intelligence personnel, many cultural high professional, duty heavy, strong, but the moral law consciousness they are not as high as their intelligence. Morality and law are the standards and norms restrain and guide people's behavior, is an important means of social control.

Whether a person is engaged in crime is determined largely by its moral and legal consciousness. The fund manager in the implementation of the "rat" behavior, may not think it is a crime, thought that this is the occupation behavior is legitimate, the social harmfulness of this kind of behavior is serious lack of knowledge, in addition, the public tolerance of this kind of behavior, the behavior of people lack moral condemnation of the fear. The above two points for "rat" laid the ideological foundation of occurrence, therefore, we should strengthen the moral law consciousness and fund staff, improve their moral law itself internal control effect, make them from the thought not to engage in illegal activities.

2, improve the legal system so that laws. Now the basic legal system does not provide the "rat" problem, thus improving the legal system of laws to abide by, in implementing the rule of law today, appear particularly important. The law should recognize the "rat" behavior is made clear, it needs to practice the "rat" behavior of technology characteristics have a clear understanding of. In addition, we can play the role of judicial interpretation and amendment of the securities crime, law does not stipulate or vague, can completely with the judicial interpretation or amendment to criminal acts, to practice the myriads of changes. "Criminal law amendment " is a good example of.

3, strengthen supervision, the crackdown. "Mouse Storehouse" problem has already threatened the trustee of fund financial institutions survival foundation, should pay great attention to supervision department. In the external supervision should intensify the supervision of securities market, improve the level of supervision of securities market. "Mouse Storehouse" is usually more subtle. Open account fund managers tend to use other independent non affiliated third people, this account has high concealment. This has put forward higher demand for the regulatory authorities.

Serious violations of the fund managers should implement severe law, once discovered, supervision departments to deal with the relevant responsible persons from entering the market, and shall be investigated for legal responsibility. Of course, at present, our practice is to do so, however, serious lack of regulatory crackdown.

We know that strikes, crime prevention is a systematic project, need whole society, every industry personnel to work together, therefore, strengthening the management mechanism of supervision of the securities supervision and at the same time, should also encourage the insider, lawyers, stakeholders, the news media report violations, to the securities regulatory authority under the State Council shall permit according to reports, Americans report rat, report the news once found the profit 10% return, which improve the enthusiasm of people report, we also can be reference to it, make those who know the Illegal Insider personnel in order to high returns and take the initiative to expose illegal transactions.

At the same time, the management to increase punishment. In June 19, 2009, Shenzhen securities regulatory bureau held a district fund supervision work conference, Shenzhen securities regulatory bureau chief Zhang Yundong revealed, this year the bureau to investment managers, fund managers of bad practices, as the focus of supervision, the focus of governance, the target of attack, strike out, will not relent. Zhang Yundong said: "for the benefit transportation, fund managers to build 'rat' serious illegal events fund companies, not only to punish the parties, and to implement 'sit', investigated company board chairman and general manager, etc. the main responsibility of leadership, the corresponding penalties on companies to."

4, strengthen internal control measures. In the internal control to improve the fund corporate governance, strengthening the internal control system of the company. On the one hand, fund companies need to establish a sound organization, responsibilities clear, effective supervision, and incentive governance structure reasonable constraints, maintain the normal operation of the company, protect the interest of fund holders; on the other hand, also need to establish a scientific and rational internal control monitoring system, strict, efficient operation, establish scientific and perfect internal monitoring system, maintain the operation legal, compliance, conservation, sound internal control, effective.

The third quarter of 2009, management require fund companies to install censorship software on all the office computer. According to industry sources, the software is installed, if through the company network, the background can be real-time monitoring to all operations; if not, the network, the software can also be retained all traces of the operation. And the software is simple, in the start menu by clicking on a program, you can check the computer operating traces. The software for the later raided the foreshadowing. The above measures is to strengthen internal control and not necessary measures have been taken.

5, the implementation of the burden of proof. The securities crime has strong concealment, professional and strong, the dark number of crime is high, not easy to be found, is the main feature of securities crime, "the above characteristics of rat" problem is naturally. This set obstacle to the investigation of public security organs, evidence collection became a problem.

In order to combat this behavior, we can consider whether the onus probandi, compliance by the acts themselves proof that their own behavior, from its own demonstrated in the absence of insider trading case why he is so accurate time to buy stocks and profit from. If there is no way to prove that, or without good reasons, shall be investigated for criminal responsibility. It can be said, a good solution to the problem of evidence of public security organs, is conducive to curb "rat".

As for the feasibility of the measures, in China's criminal law is not without precedent to follow, the unidentified crime of huge property from the criminal law 395th stipulation would reverse the burden of proof, "I can't explain the legitimacy, the difference in order to illegal income theory". Of course, the implementation of the burden of proof is not that shall be borne by the defendant and the full burden of proof, without the need for investigation and evidence collection, in fact is to require the defendant bear some of the burden of providing evidence, the prosecution must assume their charges still can not be the crime of huge unidentified property established adverse consequences of litigation.