Attend in person or via Zoom: https://myumi.ch/e3812

The People's Republic of China has had a statutory prohibition against "insider trading" (using material, non-public, information to trade securities with uninformed counterparties for individual profits) since the promulgation of its second securities law statute, the 2006 PRC Securities Law, some 15 years after stock exchanges were first established in Shanghai and Shenzhen. However, the provisions designed to battle insider trading built into Chinese law were a melange of ill-understood foreign (mostly US Supreme Court jurisprudential) doctrines, equally ill-suited to punishing insider trading (and "tipping" or "tippee trading") as it appears in China's contemporary securities markets. That dissonance led to what can only be understood as baseless, or illegal, enforcement of the prohibition by China's securities regulator and criminal prosecutors against types of trading not captured by the statutory (legal) prohibition, especially after the market crashes in China in 2015-16, when there was tremendous pressure on the Politburo to show state action in response to popular fury. In 2020, China revised its Securities Law, but in ways that still fail to address the rampant illegality of civil and criminal enforcement against trading behavior that is not, under any legal analysis, captured by the statutory insider trading prohibition. This presentation will describe the 20 year old problem, offer simple statutory and regulatory remedies that have so far escaped the Chinese legislator, and consider what this kind of legally baseless enforcement by the state in one corner of one post-Reform market means for China's Socialist rule of law program.

Nicholas Calcina Howson is the Pao Li Tsiang Chair Professor of Law at the University of Michigan Law School who works and writes on Chinese law and legal institutions, Chinese legal history, market regulation in the PRC, administrative law, and People's Court jurisprudence. A graduate of Williams College and the Columbia Law School, he is a former partner of Paul, Weiss, Rifkind, Wharton & Garrison LLP, where he worked out of that firm's New York, Paris, London and Beijing Offices, finally as a managing partner of the firm's Asia Practice based in the Chinese capital. Howson has also taught at the Berkeley, Columbia, Cornell, and Harvard Law Schools, and served as a consultant on Chinese law matters to the Ford Foundation, the United Nations Development Programme, the Asian Development Bank, and the Chinese Academy of Social Sciences, and has advised the National People’s Congress of the PRC on the amendment of the PRC Company Law and the PRC Securities Law. He acts regularly as a Chinese law expert or party advocate in US and international litigations and/or US government enforcement actions. Professor Howson is a designated foreign arbitrator for the China International Economic and Trade Arbitration Commission (CIETAC) in Beijing and the Shanghai International Economic and Trade Arbitration Commission (SHAIC).