Information trade survey on Taiwanese vaccine manufacturer uncovers broader issues

An information marketing probe into a Taiwanese vaccine manufacturer Covid-19 has raised broader concerns about financial surveillance in the country and has intrigued President Tsai-ing Wen’s administration.

The Taipei-based prosecution office for Shilin District told the Financial Times that it was investigating Medigen Vaccine Biologics Corporation after the company’s shares jumped more than 20 percent in the days before it announced positive results. for the phase 2 clinical trials of his vaccine in June. The prosecutor declined to provide further details about the investigation.

Last month, Tsai gave a television address in which he denied allegations by political opponents that his government had blocked the importation of vaccines to raise the price of Medigen shares.

The probe opens another front through which Tsai’s political rivals can attack the president while trying to defend external pressure from China.

Only 8.2 percent of Taiwan’s population received its first blow, and the government agreed to purchase 5m vaccines from Medigen in an attempt to address a shortcoming that Taipei blamed in part on China. blocking their purchases of doses made abroad.

“We have done an internal investigation, and there is no evidence from the government or its employees that they are speculating. [on] the stock, “Tsai said during his address. Taiwan’s finance minister said later that none of the eight state-backed government banks had bought the Medigen shares before the jump.

Tsai ordered citizens to beware of false news about the vaccination campaign, which he proliferated in the Taiwanese media as the village entered a soft blockade for a domestic fire in early May.

But the probe has shed light on the prevalence of stock manipulation in Taiwan, where financial regulators often lack the legal authority needed to recover. “The Medigen case is very political,” said Wang Wen-Yeu, a professor of capital markets law at Taiwan National University. “But the practice of insider trading is rampant in Taiwan.”

Wang pointed to a high-level case involving Ko Wen-chang, former president of Hewlett-Packard Taiwan. Ko was sentenced in 2015 to nine years in prison after acquiring shares in a Taiwanese company that he knew would be acquired by a larger American group.

Lin Shu-Yu, CLSA brokerage analyst, added that “everyone in the financial industry knows that insider trading and stock manipulation are a problem.” She said for the listed small companies it is common for employees, financial intermediaries and journalists to buy shares with brokerage accounts of extended family and friends before the release of positive financial results.

“The public does not have much confidence in the government’s ability to control this sector,” Lin adds.

Part of the problem also stems from the fact that Taiwan’s Financial Supervision Commission has no jurisdiction over information trading cases, lawyers say.

Instead, the cases belong to local prosecutors “who lack the financial order to pursue them successfully,” Wang said.

Wu Huan-Ting, a lawyer based in California-based Nolan Barton and Olmos, submits that the conviction percentage for the initial case is less than 40 percent.

Officials argue that Taiwan’s approach requires only a higher weight of evidence.

“There are some problems with insider trading in Taiwan, but I don’t think it’s particularly severe compared to other countries,” said Cindy Chang, president of the government’s Securities and Futures Investors Protection Center.

Some highlight the contrast between Taiwan’s financial industry and its cutting-edge technology companies, which dominate in semiconductors.

“Taiwan’s financial markets have a long way to go,” said Wang, the law professor. “I’m behind the high-tech sector – it has to do with a lack of discipline.”

Medigen did not respond to a request for comment.

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