The objective side of the crime, the responsibility for which is established in Article 185.1 of the Criminal Code of the Russian Federation.

Vinner Eleonora Romanovna Postgraduate student, Department of Criminal Law, Kutafin Moscow State Law University 121374, Russia, Moscow, Sadovaya-Kudrinskaya str., 9 elenmarkova007@gmail.com Other publications by this author

Information transparency of the securities market is necessary for its functioning. Firstly, it contributes to improving the efficiency of the regulators of such a market. Secondly, it allows its participants to adequately assess the current situation based on reliable indicators.

Article 185.1 of the Criminal Code of the Russian Federation establishes liability for malicious evasion from disclosure or provision of information defined by the legislation of the Russian Federation on securities, or provision of deliberately incomplete or false information if these acts caused major damage to citizens, organizations or the state. 

The crime in question is committed both during the emission procedure and after it. From the outside, the act for which responsibility is provided in Article 185.1 of the Criminal Code of the Russian Federation is characterized by several alternative acts. Firstly, it is the malicious evasion of a person who is obliged to provide information to an investor or a supervisory authority from disclosing or providing information defined by the legislation of the Russian Federation on securities. Secondly, it is the provision of deliberately incomplete or false information. That is, this crime can be committed either by action or inaction.

In the theory of criminal law, evasion is understood as "failure to perform any actions in order to avoid any events or duties"^[1]. Inaction occurs when a person who is obliged to provide the required information to an investor or a supervisory authority maliciously evades providing this information.

Such a sign as the "malice" of evasion is among the evaluative ones. Therefore, if there was an appropriate judicial practice, it would be possible to understand on what grounds law enforcement agencies and the court would evaluate it. In the meantime, the interpretation of this concept exists only in the science of criminal law. As a rule, when establishing the malice of evasion, it is recommended to take into account the following facts: causes, duration, the possibility of eliminating the violation, its repetition or systematic nature. There is a proposal according to which, when establishing malice, take into account the fact that evasion is carried out after the entry into force of a court decision obliging the guilty person to perform these actions ^[2]. According to I.A. Yurchenko, "malice should be associated with the evasion of a person from fulfilling the duties assigned to him after a written warning from a specialized state body that monitors the behavior of a person, if the latter has a real opportunity to fulfill his duties"^[3]. From the point of view of R.O. Dolotov, "evasion from providing information takes place with repeated failure to comply with the requirements for disclosure of information, deliberate avoidance of contacts with investors, or regulatory authorities with deliberate creation of obstacles to them in this (refusal to let them into the company's office, ignoring phone calls and mail messages, destruction of the requested information, etc.)"^[4]. It is difficult to agree with the latter position, since it is quite problematic to determine maliciousness through a number of committed actions. A.V. Galakhova suggests that such evasion, which is committed under the following circumstances, is considered malicious:

1) the terms of information disclosure are seriously violated;

2) mandatory requirements of regulatory authorities are not fulfilled,

3) ignoring repeated requests from investors and shareholders^[5].

In our opinion, malice should be determined through repetition. Recently, the legislator uses the sign of repetition, in most cases, through prejudice. This eliminates the problems arising in law enforcement activities in the interpretation of the term "repetition". Thus, it seems appropriate to exclude the malice of evasion from Article 185.1 of the Criminal Code of the Russian Federation, replacing it with repeated evasion, and to provide in the note the interpretation of this term through administrative prejudice.    

As a general rule, issuers must provide full, accurate and timely disclosure of financial results, risks and other information that is essential for investors to make decisions on the purchase and ownership of securities. At the same time, it is assumed that investors are reasonable and conscientious. 

Disclosure of information on the securities market is ensuring the availability of information to all interested persons, regardless of the purpose of obtaining it, in accordance with the procedure guaranteeing the finding and receipt of information (paragraph 1 of Article 30 of the Law on the Securities Market).

The largest amount of information should be disclosed by issuers of equity securities, if their securities are admitted to organized trading, and public joint-stock companies. Issuers are required to disclose information in the form of: a) quarterly report of the issuer of equity securities (quarterly report); b) consolidated financial statements of the issuer; c) reports on material facts. The issuer's obligation to disclose information arises after the securities prospectus was registered immediately after. The Law on the RZB provides for two forms of information disclosure:

- on a regular (periodic) basis based on the results of a certain period (quarter, half-year, year);

- on an irregular basis, promptly after the occurrence of an event in the financial and economic activities or corporate governance of the issuer. In such cases, information that may have a significant impact on the value or quotations of its equity securities and (or) on the decision to acquire or dispose of such securities is subject to disclosure. That is, it is information about important events (actions) that have already occurred or will occur in the financial and economic activities or corporate governance of the issuer. Of interest is the fact that the Law on the RZB does not provide a list of such essential facts, since the information is recognized as essential if:

- there is a possibility that a reasonable and conscientious investor will consider it important when making an investment decision;

- its omission, distortion or disguise will affect the decisions of investors.

When disclosing information, issuers should take into account that when deciding on its materiality, an investor can proceed from both the nature and quantity of information. At the same time, it can be both financial and non-financial.

Determining the composition and volume of information, the procedure and timing of its disclosure on the securities market, and the establishment of requirements for disclosure of information in the form of reports on material facts falls within the competence of the Bank of Russia. Its requirements for disclosure by issuers of information on material facts are determined by Regulation No. 714-P. However, it should be noted that the list of information related to material facts is not exhaustive. This conclusion is due to the fact that, in accordance with Chapter 50 of Regulation No. 714-P, information not provided for in Chapters 14-49 of Section V of Regulation No. 714-P may be disclosed in the form of a material fact report if, in the issuer's opinion, they have a serious impact on the value or quotations of the issuer's securities. Thus, the issuer should not disclose any information, but only that which simultaneously meets the following two criteria:

1) the information is not disclosed by the issuer in the form of other statements of material facts;

2) the information, in the opinion of the issuer, may have a significant impact on the value or quotations of its securities.

The Bank of Russia recommends issuers to fix approaches to disclosure of information in a message about material facts in an internal document. At the same time, the Corporate Governance Code, also recommended by the Bank of Russia for application, contains provisions on the expediency of developing and implementing an information policy. This document is intended to ensure effective information interaction of the issuer, including with investors. It should describe approaches to determining the materiality of information disclosed in the form of a message; fix an indicative list of such information; establish the levels of materiality of information. Approval of this document and control over its compliance usually falls within the competence of the Board of Directors (supervisory Board), and responsibility for implementation falls within the competence of the issuer's executive bodies. Thus, the Central Bank draws attention to the importance of such a process as disclosure of information, and calls for it to be given due attention. Moreover, violations committed in this process may entail liability provided for by Russian legislation, as well as harm business reputation.

Issuers who are obliged to disclose information in accordance with the requirements of Regulation No. 714-P must publish the information to be disclosed on the Internet page. Information is disclosed by issuers of securities in the news feed on the websites of at least one of the Agencies that is authorized to publish such information in the news feed. The agencies authorized to publish information of issuers of equity securities in the news feed include: AK&M News Agency, the Association for the Protection of Information Rights of Investors (AZIPI), the Interfax News Agency Project - "Corporate Information Disclosure Center", the PRIME-TASS Economic Information Agency, the SCREEN Information Disclosure Website. If, in accordance with Regulation No. 714-P, information must be disclosed by publication in the news feed, disclosure of information by other means before its publication in the news feed is not allowed.

In case of publication of the relevant information on the Internet, the issuer is obliged to provide free and unencumbered access to such information, as well as to provide, upon request of interested persons, the addresses of the pages on which the information is published. The Issuer can also use both its own website and any other website on the Internet. It is interesting to note that the disclosure of information made by third parties does not exempt the issuer from the obligation to disclose it.

In cases where the issuer does not disclose any information, the disclosure of which is mandatory, including information constituting a state secret, or other information, access to which is restricted by the legislation of the Russian Federation, the message or document disclosed by the issuer must contain an indication of the reason why the information of restricted access by the issuer is not disclosed.

Unfortunately, the Law on the Securities Market does not define what is meant by providing information. The paragraph that previously contained such a concept was excluded from Article 30 of the said law. Currently, the obligation to provide information on securities is referred to in paragraph 18. Article 30 of the Law on the Securities Market, which establishes that the person who provided security for the issuer's bonds is obliged to provide the issuer with certain information (for example, financial statements). If such information is unreliable or incomplete or misleading, then the responsibility for losses by the investor should not be borne by the issuer, but by this person. 

Article 30.3 of the Law on the RZB provides for the obligation to provide information in respect of the issuer to whom the personal account of the nominee holder of the central securities depository is opened or if the central securities depository is a person who performs centralized accounting of the rights to securities of such an issuer. In this case, it provides information to the central depository - a non-bank credit institution to the joint-stock company "National Settlement Depository" (NCO JSC NSD), in accordance with the order of the FSFR of Russia dated 06.11.2012 No. 12-2761/pz-I. This company services securities in accordance with Federal Law No. 414-FZ dated 07.12.2011 "On the Central Depository". Regulation and supervision of the activities of the central depository is carried out by the Bank of Russia.

Also, the obligation to provide information to an investor is contained in Article 6 of Federal Law No. 46-FZ of March 5, 1999 "On the Protection of the Rights and Legitimate Interests of Investors in the Securities Market" (hereinafter – the Law on the Protection of Investors' Rights in the Securities Market). In this regard, the question arises whether the mentioned law is included in the legislation of the Russian Federation on securities, since the possibility of criminal prosecution under Article 185.1 of the Criminal Code of the Russian Federation depends on it.

According to the hypertext link, in the Consultant Plus system, which is present in Article 185.1 of the Criminal Code of the Russian Federation, such legislation is the Law on RZB. Such links are also called "smart links", because they allow you to immediately go to the documents referenced by an article or other document. However, if we refer to Part 2 of Article 15.19 of the Administrative Code of the Russian Federation, then the active link sends us to three laws:

1) The Federal Law "On Investment Funds";

2) The Law on the RCB;

3) The Law on the Protection of Investors' Rights in the Securities Market.

According to Article 6 of the Law on the Protection of Investors' Rights in the Securities Market, the issuer must provide the investor with information determined by the legislation of the Russian Federation. Hypertext, indicated in this article, sends us to the Law on the RZB and Regulation No. 714-P. Thus, it can be concluded that the Law on the Protection of Investors' Rights in the Securities Market is not included in the legislation of the Russian Federation on securities.

Of interest is the fact that initially Article 185.1 of the Criminal Code of the Russian Federation was called "Malicious evasion from providing information to an investor or a supervisory authority determined by the legislation of the Russian Federation on securities." In October 2009, the name was changed. As follows from the transcript of the meeting No. 116 dated 14.10.2009, when discussing the reasons for the change, including the title of the analyzed article, A.Y. Sinenko, the official representative of the Government of the Russian Federation, Deputy head of the Federal Financial Markets Service, noted that this was due to changes in substantive law, in particular, the Law on the RZB, which requires the corresponding corresponding reflection in criminal norms ^[6]. It should be pointed out that earlier Article 30 of the Law on RZB was called "Disclosure and provision of information", but the "renaming" of the article occurred only in 2010. Therefore, it remains unclear whether A.Y. Sinenko spoke about the changes that have already taken place, or about those that are only planned.

The crime, the responsibility for which is provided for in Article 185.1 of the Criminal Code of the Russian Federation, can be expressed in action, namely, in providing the issuer, the Central Depository with deliberately incomplete or false information. If deliberately incomplete or false information is provided to the investor, then in this case liability can occur only under Part 1 of Article 15.19 of the Administrative Code of the Russian Federation.

Knowingness means that the person providing the information knows for sure that they do not reflect the actual state of affairs.

An obligatory sign of the objective side of the analyzed crime is the socially dangerous consequences in the form of causing major damage to citizens, organizations or the state. The only example of judicial practice is the conviction of a person who is the general director of the Company for providing incomplete and false information to the supervisory authority^[7]. I.A. Klepitsky, analyzing this example, notes that the verdict does not disclose the fact of damage and does not show a causal relationship, and most likely the same damage, in the form of shares and the right to the Company's property assigned to these shares was imputed twice, as a sign of fraud and as a sign of malicious evasion from disclosure or provision of information defined by the legislation of the Russian Federation on securities ^[8].   

         The expediency of socially dangerous consequences in Article 185.1 of the Criminal Code of the Russian Federation in the form of causing major damage to citizens, organizations or the state has been questioned more than once in the scientific literature. For example, N.A. Lopashenko, although he does not directly speak about the need to exclude consequences from the objective side of the crime under consideration, at the same time notes an extremely low probability of criminal prosecution in practice due to "... overestimation of the amount of major damage that allows the guilty to avoid criminal liability"^[9]. According to the fair statement of I.A. Yurchenko, it is necessary to abandon the material construction of the crime provided for in Article 185.1 of the Criminal Code^[10], since "there is no direct causal relationship between the commission of acts provided for by the disposition of this norm and the consequences that have occurred. By itself, for example, the introduction of deliberately unreliable information in the prospectus cannot entail major damage"^[11]. In this regard, it is impossible not to note the statement of I.A. Klepitsky, according to which "There are no proven methods for calculating major damage"^[12].

         The subjective side of the crime, the responsibility for which is established in Article 185.1 of the Criminal Code, is characterized by an intentional form of guilt. The intellectual element of intent must include knowledge. That is, the attacker, by providing information, realizes that it is incomplete or does not correspond to reality. 

         The subject of the analyzed crime is a special subject, that is, a person who is charged with the duty to disclose and provide information. As follows from Article 30 of the Law on RZB, they are obliged to provide and disclose information:

         - issuers, shareholders of the issuer, employees of the issuer, employees of organizations controlled by the issuer;

         - employees of the audit organization; 

         - persons who provided collateral for the bonds;

         - persons who have acquired or whose right to directly or indirectly dispose of votes attributable to voting shares (shares) has ceased;

         - persons acquiring equity securities of a public joint stock company in the amount of more than 30%.;

         - professional participants of the securities market.

Official statistics show that there have been no criminal cases initiated under Article 185.1 of the Criminal Code over the past 10 years. And first of all, this is explained by the imperfection of the current norm. I.A. Yurchenko proposed a new version of Article 185.1 of the Criminal Code, which, in our opinion, will allow the norm to cease to be "dead", since instead of "malice" there will be "repetition", meaning administrative prejudice, and the composition will become formal. It seems that the inapplicability of the analyzed norm is more related to the problems of establishing socially dangerous consequences. This confirms the fact that bringing to administrative responsibility under Article 15.19 of the Administrative Code of the Russian Federation is very common. I.A. Yurchenko suggests placing the concept of repetition in a Note to Article 185.1 of the Criminal Code^[13]. It should be noted here that the term repetition should be applicable not only to evasion from providing information, but also to other acts, despite the fact that in the remaining parts of Article 15.19 of the Administrative Code of the Russian Federation, there is no reservation about an act that does not contain signs of a crime.  

While maintaining the general line of this approach, we still take the liberty to propose a slightly different version of the name and disposition of malicious evasion from disclosure or provision of information defined by the legislation of the Russian Federation on securities, excluding the term "malice" from the name, putting action in the first place, as is usually done by the legislator. It is also necessary to change the notes to Article 185.1 of the Criminal Code of the Russian Federation, indicating there the numbers of specific articles in the Administrative Code, thereby avoiding the phrase "similar act". It should be noted here that there are two similar acts in the Administrative Code, since Article 185.1 of the Criminal Code of the Russian Federation establishes liability for evasion or submission of incomplete or false information to both the investor and the regulator. These are the acts provided for in Article 15.19. "Violation of the requirements of legislation concerning the presentation and disclosure of information in financial markets" and Part 1 of Article 19.7.3 "Failure to submit information to the Bank of Russia". The fact is that the first article establishes liability for failure to provide or violation of the procedure and deadlines for the submission of information to investors, as well as the submission of information to them not in full, and (or) false information, and (or) misleading information; and for non-disclosure or violation of the procedure and deadlines for disclosure of information provided by federal laws. laws and other regulatory legal acts adopted in accordance with them, as well as the disclosure of information not in full, and (or) false information, and (or) misleading information. It should be noted here that Part 1 of Article 15.19 of the Administrative Code of the Russian Federation contains a clause "if these actions (inaction) do not contain a criminally punishable act", it is absent in the rest of its parts. The current situation seems illogical, therefore, it seems that all parts of Article 15.19 of the Administrative Code of the Russian Federation should be supplemented with the same reservation, since the acts prohibited by them are similar, with some exceptions, to the crime for which responsibility is established in Article 185.1 of the Criminal Code of the Russian Federation.

If reports, notifications and other information are submitted to the Bank of Russia in violation of the established deadlines, or there is an incomplete presentation of information and (or) unreliable information, responsibility comes under Part 1 of Article 19.7.3 Administrative Code (the disposition contains a clause, "if these actions (inaction) do not contain signs of a criminally punishable act").

Article 185.1. Failure to fulfill the obligation to disclose and provide information defined by the legislation of the Russian Federation on securities

Provision of deliberately incomplete or false information defined by the legislation of the Russian Federation on securities, as well as repeated evasion from disclosure or repeated evasion of providing such information,— 

Note. Repeated evasion from disclosure or provision of information determined by the legislation of the Russian Federation on securities committed by a person subjected to administrative punishment for an act provided for in Article 15.19 of the Code of Administrative Offences of the Russian Federation or for an act provided for in Part 1 of Article 19.7.3 of the Code of Administrative Offences of the Russian Federation - during the period when the person is considered to be subjected to administrative punishment punishment."

The introduction of repetition and its interpretation in the note will make it easy to distinguish the crime provided for in Article 1851 of the Criminal Code of the Russian Federation from an administrative offense, responsibility for which is established in Part 1 of Article 15.19 of the Administrative Code of the Russian Federation "Violations of legal requirements concerning the presentation and disclosure of information in financial markets" and in Part 1 of Article 19.7.3 "Non-presentation information to the Bank of Russia".

The exclusion of socially dangerous consequences in the form of major damage to citizens, organizations or the state will allow this norm to become applicable.