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Article 174
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(Penal Provisions)
A person who commits any of the following offenses shall be punished with imprisonment for not less than one year and not more than seven years and in addition thereto a fine of not more than NT$20 million may be imposed:
- the making of false statements on the application materials required under Article 30, Article 44, paragraphs 1 to 3, or Article 93, or Article 30 as applied mutatis mutandis under Article 165-1 or 165-2, of this Act.
- the making and dissemination to the public of false information with regard to the market value of securities, or with regard to the material aspects of the approved public offering.
- the violation of paragraph 1 of Article 32 by an issuer, its responsible persons or employees, and the provision of paragraph 2 of the same Article does not apply.
- the making of false statements on the account books, forms/statements, documents, or other reference or report materials produced by any issuer or public tender offeror or related party thereof, securities firm or its principals, securities dealers association, stock exchange, or any other enterprises referred to in Article 18 pursuant to an order of the Competent Authority to produce such materials.
- the making of false statements on the account books, forms/statements, vouchers, financial reports or any other business documents by any issuer, public tender offeror, securities firm, securities dealers association, stock exchange, or any other enterprises referred to in Article 18, as required to be produced in compliance with acts or regulations, or orders prescribed by the Competent Authority pursuant thereto.
- the making of false statements in the content of a financial report under the preceding subparagraph by a managerial officer or accounting officer who signs or seals the financial report; provided, the punishment may be reduced or remitted if the person has submitted a corrective opinion and provided evidence in a report to the Competent Authority before the Competent Authority or a judicial agency has commenced an investigation [ex officio or] upon a complaint filed by another person.
- the making of any investment advice relating to an issuer or specific securities transactions which was based on false information and disseminating the said advice on any newspapers and magazines, written materials, broadcasts, films or by other means.
- the loaning of company funds to another person, using company assets to provide security or a guarantee for another person, or endorsing of a negotiable instrument by a director, managerial officer, or employee of an issuer in violation of an act or regulation, or the articles of incorporation, or beyond the scope authorized by the board of directors, causing substantial damage to the company.
- counterfeiting, altering, destroying, concealing, or obscuring working papers or relevant records or documents with intent to impede inspection by the Competent Authority or investigation by a judicial agency.
A person who commits any of the following offenses shall be punished with imprisonment for not more than five years, or a fine of not more than NT$15 million may be imposed [in lieu thereof] or in addition thereto:
- issuance of a false or untrue opinion by a lawyer regarding any contract, report, or document of the company or foreign company related to securities offering, issuance, or trading.
- failure by a certified public account to faithfully fulfill his or her audit duties and issue a report or opinion with respect to any material falsehood or error in a financial report, document, or information reported or published by a company or foreign company; or failure by a certified public accountant to expressly state a material falsehood or error in a company or foreign company financial report due to failure to audit in accordance with applicable laws and regulations and generally accepted audit principles.
- violation of Article 22, paragraphs 1 to 3.
Where the commission of an offense under the preceding paragraph materially affects the rights or interests of shareholders or harms the stability of the securities market, the punishment may be increased by one-half.
Where a personnel member or employee of an issuer commits an offense in subparagraph 6 of paragraph 1, and the offense is minor, the punishment may be reduced.
The Competent Authority shall render a disposition suspending attestation work by a certified public accountant who violates subparagraph 2 of paragraph 2.
If a foreign company is the issuer, any violation of paragraph 1, subparagraphs 1 to 9 by the foreign company or a director, managerial officer, employee, or accounting officer of the foreign company shall be punished under paragraphs 1 and 4.
A person who violates Article 22 as applied mutatis mutandis under Article 165-1 or 165-2 shall be punished under paragraphs 2 and 3.
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Article 175
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(Penal Provisions)
A person who violates the provisions of paragraph 1 of Article 18, A paragraph 1 of Article 28-2, paragraph 1 of Article 43, paragraph 3 of Article 43-1, paragraphs 2 and 3 of Article 43-5, paragraph 1 of Article 43-6, paragraphs 1 through 3 of Article 44, paragraph 1 of Article 60, paragraph 1 of Article 62, Article 93, Articles 96 through 98, Article 116, Article 120, or Article 160 shall be punished with imprisonment for not more than two years, detention, and/or a fine of not more than NT$1.8 million.
A person who violates Article 43, paragraph 1, Article 43-1, paragraph 3, Article 43-5, paragraphs 2 and 3, as applied mutatis mutandis under Articles 165-1 or 165-2, or violates Article 28-2, paragraph 1 or Article 43-6, paragraph 1, as applied mutatis mutandis under Article 165-1, shall be punished under the preceding paragraph.
A person who conducts a public tender offer without prior public announcement in violation of Article 43-1, paragraph 2, or who conducts a public tender offer without prior public announcement in violation of Article 43-1, paragraph 2 as applied mutatis mutandis under Article 165-1 or 165-2, shall be punished under paragraph 1.
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Article 178-1
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(Penal Provisions)
If a securities firm, an enterprise as set forth in Article 18, paragraph 1, a securities dealers association, a stock exchange, or an over-the-counter securities market commits any of the following violations, the violating entity or association may be punished with an administrative fine of not less than NT$300,000 and not more than NT$6 million, and the Competent Authority may order it to comply within a prescribed time period; if it fails to comply within the specified period, consecutive fines may be imposed:
- Violation of Article 14, paragraph 3, Article 14-1, paragraph 1 or 3, Article 21-1, paragraph 5, Article 58, Article 61, Article 69, paragraph 1, Article 79, Article 141, Article 144, Article 145, paragraph 2, Article 147, Article 152, or Article 159; or Article 61, Article 141, Article 144, Article 145, paragraph 2, or Article 147 as applied mutatis mutandis under Article 165-1 or 165-2.
- Failure to submit account books, forms/statements, documents, or other reference or report materials within a specified time period as ordered by the Competent Authority, or evasion, impeding, or refusal of an examination duly conducted out by the Competent Authority.
- Failure to comply with relevant provisions regarding the preparation, submission, public announcement, maintenance, or preservation of account books, forms/statements, vouchers, financial reports or other relevant business documents as required by this Act or by orders issued by the Competent Authority pursuant to this Act.
- A securities firm or an enterprise as set forth in Article 18, paragraph 1 fails to strictly implement its internal control system.
- An enterprise as set forth in Article 18, paragraph 1 violates the regulations adopted pursuant to paragraph 2 of the same article, governing finances, operation, or management.
- A securities firm violates the provisions of the regulations adopted pursuant to Article 22, paragraph 4 governing the issuance of other securities that have received approval from the Competent Authority, or the provisions of the standards or regulations adopted pursuant to Article 44, paragraph 4, the regulations adopted pursuant to Article 60, paragraph 2, the regulations adopted pursuant to Article 62, paragraph 2, or the regulations adopted pursuant to Article 70, governing finances, operations, or management.
- An over-the-counter securities market violates the provisions of regulations adopted pursuant to Article 62, paragraph 2, a securities dealers association violates the provisions of regulations adopted pursuant to Article 90, or a stock exchange violates the provisions of regulations adopted pursuant to Article 93, Article 95 or Article 102, governing finances, operations, or management.
The penalty for a violation punishable by an administrative fine under the preceding paragraph may be remitted, or the violator may be ordered to correct the violation within a prescribed time period and the penalty remitted once the violation has been corrected, if the violation is minor.
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