Insider dealing covers allegations of trading while in possession of inside information, encouraging others to deal in such circumstances and disclosure of inside information other than in the proper performance of one’s employment. A person who discloses confidential information may do so to a friend, family member or colleague without any expectation that person would trade on the basis of the information disclosed.
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We have extensive experience of representing individuals who have become embroiled in insider dealing investigations, whether they are professional traders or have become caught up in an investigation through personal trading on their own account.
What is insider dealing?
Insider dealing is where a person who has inside information about certain securities (e.g. shares in a listed company) does one of the following whilst in possession of that information:
- Deals in those securities on a regulated market (this includes spreadbetting and contracts for difference (CFDs));
- Encourages another person to deal in those securities; or
- Discloses the information to another person, other than in the proper performance of one’s employment, office or profession.
Inside information is information which:
- Relates to particular securities or a particular issuer of securities;
- Is specific or precise;
- Has not been made public; and if it were made public would be likely to have a significant effect on the price of any securities.
- Note: The definitions of inside information and insider dealing vary slightly between the criminal and civil offences.
Does it matter how I received the inside information in question?
Yes, a person can only be guilty of insider dealing if he has the inside information “as an insider”. This means that the person must both know that the information is inside information and also know that he has the information from an inside source.
A person has information from an inside source in three scenarios:
- If he has it through being a director, employee or shareholder of an issuer of securities; or
- If he has it through having access to the information by virtue of his employment, office or profession; or
- If the direct or indirect source of the information is a person within one of the preceding two categories.
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