The State Securities Commission (SSC) has just issued a decision to administratively sanction 2 individuals and 19 people related to the manipulation of stock prices of First Real Estate JSC (FIR).
Accordingly, Mr. Luu Thai Hai and Ngo Huynh Minh Uy (permanent resident in Da Nang) were each fined 1.5 billion VND for using 76 securities accounts to continuously buy, sell, and trade FIR stocks between accounts with the aim of creating fake supply and demand and manipulating stock prices.
The manipulation was carried out by the two individuals between January 4 and June 17, 2022. However, through investigation, the State Securities Commission determined that Mr. Hai and Uy had not yet received any illegal income from the violation.
In addition to the above fines, the State Securities Commission also banned the two individuals from trading securities for a period of two years; banned them from holding positions at securities companies or branches, securities investment fund management companies and foreign fund management companies in Vietnam for two years, starting from January 12.
In addition, the State Securities Commission decided to punish 19 individuals for lending accounts for trading, leading to stock market manipulation.
These individuals include: Ms. Hoang Thi Thuy Van, Ms. Thai Thi Phuong Thao (Quang Nam); Ms. Ho Trung Anh, Mr. Ho Xuan Phuong, Ms. Huynh Thi Phuoc, Ms. Dinh Thi Nhung, Ms. Nguyen Le Hong Trang, Mr. Nguyen Minh Quyen, Ms. Nguyen Thi Dieu Hang, Ms. Nguyen Thi Hong Loan, Ms. Nguyen Thi Loan, Ms. Nguyen Thi Thu Ha, Ms. Tran Thi Ha Giang, Mr. Vu Dinh Cuong, Mr. Nguyen Anh Tuan (Da Nang), Ms. Le Thi Trinh, Mr. Vo Van Quang (Quang Tri), Ms. Phan Thi Kieu Phung (Binh Dinh); Mr. Nguyen Duc Trung (Hanoi).
Previously, in November 2023, another individual, Mr. Nguyen Huu Duc, was fined VND 1.5 billion and banned from securities trading for 2 years for using his own securities account and 75 accounts of 21 investors to continuously buy, sell, and trade to create fake supply and demand, manipulating FIR stock prices during the same period as Mr. Hai and Uy.
Also according to the State Securities Commission, 19 individuals lent accounts but did not have any illegal income due to the violation.
These individuals are banned from trading securities for two years from January 12; banned from holding positions at securities companies or branches, securities investment fund management companies, and foreign fund management companies in Vietnam for two years, from January 12.
Recently, the State Securities Commission has taken strong action to handle many violations in the stock market.
Shareholders lost money, the penalty is still light
In December 2023, the State Securities Commission fined Mr. Nguyen Viet Ha VND 1.5 billion and banned him from trading for 2 years for manipulating the price of GKM shares of Khang Minh Group JSC between August 2, 2021 and January 28, 2022.
In mid-2023, Hanoi City Police decided to prosecute the criminal case of Stock Market Manipulation occurring at Asia Pacific Securities JSC, Asia Pacific Investment JSC and IDJ Vietnam Investment JSC. Accordingly, the police agency prosecuted and issued detention orders for 5 defendants for Stock Market Manipulation, Mr. Nguyen Do Lang (General Director of Asia Pacific Securities)...
In October 2023, the Ministry of Public Security's Investigation Police Agency also completed the investigation conclusion of the case of "Stock market manipulation" and "Fraudulent appropriation of property" occurring at FLC Group Corporation and related units, and at the same time transferred the case file to propose prosecution of 21 defendants.
The Ministry of Public Security also requested the State Securities Commission to strengthen supervision of the stock market. According to the Ministry of Public Security's Investigation Police Agency, there are loopholes and shortcomings in legal regulations on securities activities, allowing subjects to take advantage of and commit crimes.
Accordingly, opening a securities account is easy and uncontrolled, so subjects have taken advantage of renting or asking others to open accounts in their names to buy and sell, creating fake supply and demand, pushing up prices, and selling for illegal profits.
In addition, the control of loans in the form of investment cooperation still has many loopholes. Subjects have taken advantage of securities companies and third-party companies to circumvent the law, signing contracts for customers to borrow (in the form of other investment cooperation capital contribution) with fixed interest rates to gain profits; from there, subjects have sources of money to trade, buy and sell, push up prices, manipulate stock codes, and gain illegal profits.
Besides, the penalties for stock manipulation remain light.
The current Penal Code stipulates low penalties for this type of crime: the highest fine is 4 billion VND, the highest prison sentence is 7 years in prison, it is a serious crime, the maximum investigation period is 8 months, the maximum detention period for investigation is 5 months, causing difficulties for investigation work and not ensuring deterrence and prevention.
The Investigation Police Agency also believes that the lack of control over the activities of social networks has allowed subjects to take advantage of establishing secret groups and associations to call for, incite, and attract investors, control and manipulate the market, gain illegal profits, and cause damage to investors. Currently, there are no regulations or guidelines as a legal basis for determining damages for investors participating in the purchase and sale of securities during the manipulated periods to have a basis for determining damages.
Most businesses involved in stock manipulation by their leaders later suffered, such as GAB, ROS, FLC, HAI, etc. Small shareholders suffered heavy losses because their stocks plummeted and they lost money.
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