GROUP ASSIGNMENT COVER SHEET

STUDENT DETAILS
Student name: Nguyen Tien Dung Student ID number: 31161020389
Student name: Nguyen Duc Duy Student ID number: 31161024357
Student name: Pham My Duyen Student ID number: 31161020416
Student name: Student ID number:
Student name: Student ID number:

UNIT AND TUTORIAL DETAILS

Unit name: Business Law Unit number:
Tutorial/Lecture Business Law Class day and time:
Lecturer or Tutor name: James Weisman

ASSIGNMENT DETAILS
Title: WHITE COLLAR AND ACCOUNTING LAW
Length: Due date: Date submitted:

DECLARATION
I hold a copy of this assignment if the original is lost or damaged.
I hereby certify that no part of this assignment or product has been copied from any other student’s work or
from any other source except where due acknowledgement is made in the assignment.
I hereby certify that no part of this assignment or product has been submitted by me in another
(previous or current) assessment, except where appropriately referenced, and with prior permission
from the Lecturer / Tutor / Unit Coordinator for this unit.
No part of the assignment/product has been written/ produced for me by any other person except
where collaboration has been authorised by the Lecturer / Tutor /Unit Coordinator concerned.
I am aware that this work may be reproduced and submitted to plagiarism detection software programs for
the purpose of detecting possible plagiarism (which may retain a copy on its database for future
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Student’s signature:
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 WHITE COLLAR AND ACCOUNTING LAW

Group 9: Nguyen Tien Dung

Nguyen Duc Duy

Pham My Duyen

Declaration
I declare, under penalty of law and honor code violation, that this is an original work of authorship.

/s/Nguyen Tien Dung, 31161020389, September 2, 2018.

/s/Nguyen Duc Duy, 31161024357, September 2, 2018.
/s/Pham My Duyen, 31161020416, September 2, 2018.
 Introduction

White collar crime occurs a lot in both developing and developed countries. For the reason that
society nowadays emphasizes much on each person’s richness and fortune, white-collar workers
have higher tendency to commit such crimes in order to gain profits for themselves otherwise
avoid losses. However, such actions are strictly prohibited by the SEC laws since it can directly
affect the whole economy of a country. In this report, we research on some common white-collar
crimes, focusing on their definitions, examples and civil penalty for each cases in different
countries, including Viet Nam, USA and China. By understanding the seriousness of such
violations, we can later get to avoid committing such crimes intentionally as well as
unintentionally.

IN VIETNAM
Insider trading
 According to Clause 1, Article 126 of the Law on Securities, 2010: Persons who know inside
information or who have internal information if they buy or sell securities, disclose this
information or ask others to buy or sell securities shall be fined, confiscated legal proceeds or be
examined for penal liability as prescribed by law. Beside that, organizations and individuals that
use internal information to buy and sell securities, a fine of between VND 800,000,000 and
1,000,000,000 and confiscation of all legal proceeds Law on the use of inside information for
securities purchase and sale. In case a user uses multiple accounts to conduct insider trading or
manipulates securities prices, the unlawful amounts shall be counted on the securities Item used
for insider trading or securities manipulation.
In addition, people who know information related to public companies or public funds which
have not been publicized but which are publicized may greatly affect securities prices of public
companies or public funds which use information. provide this information or advise others to
buy and sell securities on the basis of this information, gaining illicit profits from VND
300,000,000 to less than VND 1,000,000,000 or causing damage A fine of between VND
500,000,000 and under VND 1,500,000,000 shall be subject to a fine of between VND
500,000,000 and 2,000,000,000 or a prison term of between six months and three years.

Market manipulations
Market Manipulation is the interference with the free and fair operation of the market by
engaging in conduct that creates an artificial price or maintains an artificial price for a security.
By Vietnam Law of the Civil Foundation and Law of the Certificate of the Stock, A fine of
between VND 30,000,000 and 50,000,000 shall be imposed on individuals, and a fine of between
VND 50,000,000 and 70,000,000 shall be imposed on investment securities being executed
within the scope of violation: information in the stock transaction for the making of, the author
create, stock trading with the configuration form, another pull plug, valid for other transaction
methods for the stock price.
IN THE US
Insider trading
According to SEC law (Securities and Exchange Commission), the term “insider trading” is
defined as including both legal and illegal action. The legal version is the one in which corporate
insiders such as officers, directors, employees or large shareholders, buy and sell stock in their
own firms. When such insiders conduct the trading, they must report to the SEC. This is to help
many investors and traders since they could use this information to evaluate the company’s
investment potential and if the insiders are buying the stock, they must know more about their
own companies than everyone else provided that they ensure their report to the SEC being made
at the same time of the trade.
On the other hand, the version that is most concerned about is the illegal one, in which insiders
buy or sell security, in breach of a fiduciary duty or other relationship of trust and confidence,
especially while they possess material, nonrepublic information about the security. Otherwise,
the traders is also guilty of insider trading if material information about a company, or about the
company’s stock, is obtained in violation of any duty to any person and is used to conduct the
trade. For instance, corporate officers, directors, and employees trading the corporation’s
securities after learning of significant, confidential corporate developments.

Civil Penalties for Insider Trading

In the US, violation of insider trading is fined according to Securities Exchange Act of 1934,
section 21A. In this section, it states that the commission may bring such cases of violation to
District court to investigate and then the court could have the jurisdiction to impose a civil
penalty which will be paid by the person who has violated this law. Otherwise, the jury will
make final decision that they should impose the fine to that person directly, or they will
indirectly control that individual.
The act also states clear the amount of penalty imposed on such cases. As for person who
directly committed the law, the amount of penalty will be penalized but shall not exceed three
times of the profit gained or loss avoided. As for the controlling person, the penalty is limited not
to exceed the greater of $1,000,000 or triple the amount of profit gained or loss avoided.
IN CHINA
Crime of embezzlement and some financial affairs
Embezzlement
According to Criminal Law of the People’s Republic of China - Part 2 - Chapter VIII, a person
(authorized by State organs, State-owned companies, enterprises, institutions or people's
organizations to administer and manage State-owned property) or organisation (any State
functionary) violates the law when taking advantage of his/her office, appropriates, steals,
swindles public money or property or by other means illegally take it into his/her own
possession; or even the person conspires with the person engaging in embezzlement shall be
regarded as joint offenders in the crime and punished as such.
Moreover, Chapter VII also mentions about the criminal of bribery, which any State
functionary who, by taking advantage of his own functions and powers or position, secures
illegitimate benefits for an entrusting person through another State functionary's performance of
his duties and extorts from the entrusting person or accepts the entrusting person's money or
property shall be regarded as guilty of acceptance of bribes and punished for it; or whoever, for
the purpose of securing illegitimate benefits, gives money or property to a State functionary shall
be guilty of offering bribes; or whoever, in economic activities, violates State regulations by
giving a relatively large amount of money or property to a State functionary or by giving him
rebates or service charges of various descriptions shall be regarded as guilty of offering bribes
and punished for it; but any person who offers money or property to a State functionary through
extortion but gains no illegitimate benefits shall not be regarded as offering bribes.
In addition, the punishment for the violation depends mostly on the value of the present or
money and the seriousness of the cases. For examples (embezzlement):
+ Individual embezzles more than 100,000 yuan  10 years to life imprisonment or be
sentenced to death and confiscation of property
+ 50,000 – 100,000 yuan  5 years to life imprisonment and confiscation of property
+ 5,000 – 50,000 yuan  1 year to 7 years imprisonment
+ Less than 5,000 yuan  administrative sanctions to criminal detention or less than 2 years
imprisonment.
Examples for bribery:
 + Whoever commits the crime of offering bribes shall be sentenced to fixed-term
imprisonment of not more than five years or criminal detention.
+ Depend on how serious of the situation, the time can be increased to 10 years or even all
life.
+ Any briber who, before he is investigated for criminal responsibility, voluntarily
confesses his act of offering bribes may be given a mitigated punishment or exempted from
punishment.

Some financial affairs

According to Civil Law of the People’s Republic of China, a company shall establish its
financial and accounting system in accordance with the provisions of laws, administrative
regulations and the rules of the finance department under the State Council. At the end of each
fiscal year, it prepare its financial reports, which shall be audited by an accounting firm
according to law and shall be prepared in accordance with the provisions of laws, administrative
regulations and the rules of the finance department under the State Council. Furthermore, the
company with limited liability shall send its financial report to each of its shareholders within the
time limit stipulated in its articles of association.
So, these requirements from the Chinese government to the company prevent fraud and
cheating by individuals or organisation, which relates to term “cook the book” - is an idiom
describing fraudulent activities performed by corporations in order to falsify their financial
statements. Typically, cooking the books involves augmenting financial data to yield previously
nonexistent earnings. For instances, the techniques used to cook the books involve accelerating
revenues, delaying expenses, manipulating pension plans and implementing synthetic leases.
But, why does the company do that?
There are lots of reasons, which could be stealing money from the company or keeping the
stockholders happy or enticing new investors or meeting the budgets or earning executive
bonuses. However, the real reasons called pressures that company takes responsibility for that
cheating are merger attractiveness, management compensation, short term focus, unrealistic
budgets and plans, excessive profits followed by decline and personal factors – bonus,
promotions, job retention.
 “Cook the book” creates a lot of problems to the company, but the CEO or manager can see
some signals to recognize the dangers in book, such as: read the audit report, reduction in
managed costs such as advertising in relation to sales, changes in accounting policies towards
more liberal applications, unexpected increase in accounts receivable, extension of trade
payables longer than normal credit, unusual increase in intangible assets, one-time sources of
income and decline in gross margins.
 Conclusion

By understanding the law in place where we do business, we can increase our profit legally and
gain more benefits. Moreover, from this report, you can take important information to run a
company in the biggest countries (China and the US), specially how you can prevent from
mistakes when prepare a financial statement in China or from violating the insider trading in the
US or embezzlement in China. At the same time, development in Vietnam is not a bad choice if
the company fully complies with the law to avoid some problems like: market manipulation and
insider trading.
 References
- US Insider Trading Laws
https://insidertrading.procon.org/view.resource.php?resourceID=001516#21A
- Criminal Law of the People's Republic of China (March 14, 1997)
- COMPANIES LAW OF THE PEOPLE'S REPUBLIC OF CHINA ORDER OF THE
PRESIDENT OF THE PEOPLE’S REPUBLIC OF CHINA (October 27, 2005)
- Vietnam The Law of the Civil Foundation of the main 25/12/2001
- Vietnam Law of the Certificate of the Stock of 29/06/2006
- Vietnam Law Securities 2010