In today’s article of Law In Cabo we will talk about Stock Market Crimes. Surely some of the stock market scandals of our recent history come to your mind. Our specialists in economic criminal law explain what these types of crimes consist of.

The classification of certain conducts as stock market crimes is aimed at the protection of financial markets, their correct functioning and the preservation of diffuse collective interests such as public faith, consumers or investors, etc.

The incorporation of new criminal offenses

Stock Exchange Crime

The increase of the penalties for some existing stock market crimes. The incorporation of new criminal offenses:

It has been incorporated, among others, a new crime of illicit communication of privileged information. This new crime of unlawful communication of privileged information is committed by disclosing privileged information beyond the cases in which the law allows it. By disclosing such information, both investor confidence and market integrity are jeopardized.

Types of Stock Exchange Offenses

Some of the most important types of criminal offenses relating to the Stock Market are:

  • The crime of investment fraud 
  • The crime of scheming to alter the price of things and market manipulation. 
  • The crime of insider trading, also known as insider trading. 
  • The crime of hindering the supervision and inspection work of the Administration. 

Stock Exchange Crime

The crime of investment fraud takes place when the de facto or de jure administrators of a company issuing securities traded on the stock markets falsify economic-financial information contained either in investment prospectuses or in the information disseminated by the company on its resources, activities, etc.

In order for the criminal offense to be understood as committed, this misrepresentation of information must have the purpose of attracting investors, obtaining financing or placing some type of financial asset.

By punishing these conducts as a crime of investment fraud, what is protected is not so much the individual patrimony as the correct functioning of the stock market.

Stock Exchange Crime

The crime of scheming to alter the price of things consists of attempting to alter the prices that goods, products or services would have in a situation of free market competition, either upward or downward.

The crime of insider trading regulated in article 285 of the Criminal Code consists of the use of information relevant to the quotation of a stock exchange security in order to obtain an economic benefit.

This crime is understood to have been committed when a person uses or supplies information relevant to the quotation of any kind of securities or instruments traded in any organized, official or recognized market, to which that person has had access on the occasion of the exercise of his business or professional activity, with the result of obtaining a benefit either for himself or for a third party or of causing damage.

The crime of hindering the inspection work of the administration consists of the impediment or denial of the inspection work by the de facto or de jure administrators.

Stock Exchange Crime

Thus, those who as de facto or de jure administrators of any company incorporated or in formation, subject to or acting in markets subject to administrative supervision, deny or impede the actions of the inspecting or supervising persons, organs or entities, will be punished with a prison sentence of six months to three years or a fine of twelve to twenty-four months.

Are you in Baja California Sur, Mexico? Todos Santos, Los Cabos, La Paz, Loreto, San Jose Del Cabo, Los Cabos, El Pescadero? Are you in Nuevo Leon, Mexico? Apodaca, Cadereyta Jiménez, El Carmen, García, San Pedro Garza García, General Escobedo, Guadalupe, Juárez, Monterrey, Salinas Victoria, San Nicolás de los Garza, Santa Catarina and Santiago… 

At Cabo Lawyers we seek to satisfy the different legal needs of our clients, both in their business and personal matters. Contact us at: (+52)8119384461, where we will gladly advise you.

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