The Legal Eagle Study Notes
Company Law -Insider dealing is a criminal What is inside sufficient to enable the
Insider Dealing offence, can only be information recipient of this information to
L.O committed by an individual – s.56(1) - information which: identify the company in
-Demonstrate knowledge of s.52(1) CJA Relates to particular securities question. That will still result in
the historical development Standard of proof – beyond or to a particular issuer(s) and insider information.
of the offence of insider reasonable doubt i.e. a not to securities or issuers of
dealing company or a body corporate securities generally; -When it comes to insider
-Assess the scope of the cannot commit an offence of -It should relate to a particular information, it is either specific
offence insider dealing. For this security e.g. shares or to a or precise NOT made public;
-Identify the consequences offence the standard of proof is particular issuer –Company A and if it were made public, it is
of insider dealing beyond reasonable doubt, -The information will be insider likely to have a significant
-Demonstrate familiarity with because it is a criminal information if it is specific or effect on the price of any
relevant statutory provisions offence. precise; Precise means” - securities.
Scope of Criminal something exact and definite -Whether or not it is likely to
-It is a Criminal offence in the Liability e.g. Company A will merge impact the price we can look
UK since 1980. At present the -section 52(1) of the CJA with B at: Colonial Mutual Life
offence is contained in 1993, an offence is committed “specific” something pertaining Assurance Society v Wilson
Criminal Justice Act 1993 if an insider deals in to something identified. – E.g. Neill Ltd [1994] 2 N.Z.L.R.
(CJA 1993) price-affected securities when The company’s profits are in 153.
-In addition to criminal liability in possession of inside excess of expectations. This -By likely- we mean whether
there will be CIVIL LIABILITY. information info is specific about that there is substantial risk of
Focus is on the criminal Or –s.52(2) company, but the amount of occurring.
offence rather than the civil a) Encourages another to profits is not clear. -If there is substantial risk, that
liability. Between 1 July 2005 - deal in price-affected securities The requirement is that the should this information
2 July 2016, by implementation when in possession of inside information is either specific or become public it should have
of Market Abuse Directive information. precise. significant effect on the price of
(M.A.D) (2003/6/EC) it was a b) Discloses inside -According to R. v Staines any securities then it will meet
civil offences for insider information otherwise than in and Morrissey [1997] 2 Facts: the requirement for insider
dealing and market the proper performance of his 1st defendant was partying with information.
manipulation under s.118 of employment, office or the 2nd Defendant. After party Meaning of Inside Source
FSMA profession. went to house of 1st defendant. – s57(2) CJA 1993
-As of 3 July 2016, M.A.D its -Essentially the insider dealing 2nd Defendant said he knows -An insider who has insider
implementing legislation and is threefold: certain information about a information and has it from an
section 118 of FSMA repealed (1)Buying/selling price-affected certain company. Pressed to insider source.
and replaced by a new EU securities disclose information and name An inside source – s57
market abuse regime - Market (2)Encouraging of the company. However, classifies someone into either
Abuse Regulation (3) Disclosing gave recipient of the primary or secondary insider.
(Regulation 596/2014) (MAR) information enough clues so Primary Insiders
Scope of Criminal
-Civil liability is now contained the recipient of the information An inside source will be a
in MAR. The market abuse
Liability
For someone to be liable for was able to work out which director, employee or
regulation governs the civil company this actually is. shareholder of an issuer of
liability for insider dealing and insider dealing. - s. 57(1) CJA -The company need not be securities – s57(2) (a) (i)
market manipulation. However, 1993 - An individual holds specifically named by the OR someone with access to
we are focusing on the criminal information as an insider if it is, tipper the information by virtue of his
offence of insider dealing, (you and he knows that it is, inside information sufficient to enable employment, office or
are not expected to information and he has it, and the recipient of that information profession –s.57 (2) (a) (ii)
demonstrate knowledge the knows that he has it, from an to identify the company whose Secondary Insiders
civil liability stream) inside source. securities are involved. i.e. if -The direct or indirect source
the person gives information of his information is a person
© 2021
Company Law -Insider dealing is a criminal What is inside sufficient to enable the
Insider Dealing offence, can only be information recipient of this information to
L.O committed by an individual – s.56(1) - information which: identify the company in
-Demonstrate knowledge of s.52(1) CJA Relates to particular securities question. That will still result in
the historical development Standard of proof – beyond or to a particular issuer(s) and insider information.
of the offence of insider reasonable doubt i.e. a not to securities or issuers of
dealing company or a body corporate securities generally; -When it comes to insider
-Assess the scope of the cannot commit an offence of -It should relate to a particular information, it is either specific
offence insider dealing. For this security e.g. shares or to a or precise NOT made public;
-Identify the consequences offence the standard of proof is particular issuer –Company A and if it were made public, it is
of insider dealing beyond reasonable doubt, -The information will be insider likely to have a significant
-Demonstrate familiarity with because it is a criminal information if it is specific or effect on the price of any
relevant statutory provisions offence. precise; Precise means” - securities.
Scope of Criminal something exact and definite -Whether or not it is likely to
-It is a Criminal offence in the Liability e.g. Company A will merge impact the price we can look
UK since 1980. At present the -section 52(1) of the CJA with B at: Colonial Mutual Life
offence is contained in 1993, an offence is committed “specific” something pertaining Assurance Society v Wilson
Criminal Justice Act 1993 if an insider deals in to something identified. – E.g. Neill Ltd [1994] 2 N.Z.L.R.
(CJA 1993) price-affected securities when The company’s profits are in 153.
-In addition to criminal liability in possession of inside excess of expectations. This -By likely- we mean whether
there will be CIVIL LIABILITY. information info is specific about that there is substantial risk of
Focus is on the criminal Or –s.52(2) company, but the amount of occurring.
offence rather than the civil a) Encourages another to profits is not clear. -If there is substantial risk, that
liability. Between 1 July 2005 - deal in price-affected securities The requirement is that the should this information
2 July 2016, by implementation when in possession of inside information is either specific or become public it should have
of Market Abuse Directive information. precise. significant effect on the price of
(M.A.D) (2003/6/EC) it was a b) Discloses inside -According to R. v Staines any securities then it will meet
civil offences for insider information otherwise than in and Morrissey [1997] 2 Facts: the requirement for insider
dealing and market the proper performance of his 1st defendant was partying with information.
manipulation under s.118 of employment, office or the 2nd Defendant. After party Meaning of Inside Source
FSMA profession. went to house of 1st defendant. – s57(2) CJA 1993
-As of 3 July 2016, M.A.D its -Essentially the insider dealing 2nd Defendant said he knows -An insider who has insider
implementing legislation and is threefold: certain information about a information and has it from an
section 118 of FSMA repealed (1)Buying/selling price-affected certain company. Pressed to insider source.
and replaced by a new EU securities disclose information and name An inside source – s57
market abuse regime - Market (2)Encouraging of the company. However, classifies someone into either
Abuse Regulation (3) Disclosing gave recipient of the primary or secondary insider.
(Regulation 596/2014) (MAR) information enough clues so Primary Insiders
Scope of Criminal
-Civil liability is now contained the recipient of the information An inside source will be a
in MAR. The market abuse
Liability
For someone to be liable for was able to work out which director, employee or
regulation governs the civil company this actually is. shareholder of an issuer of
liability for insider dealing and insider dealing. - s. 57(1) CJA -The company need not be securities – s57(2) (a) (i)
market manipulation. However, 1993 - An individual holds specifically named by the OR someone with access to
we are focusing on the criminal information as an insider if it is, tipper the information by virtue of his
offence of insider dealing, (you and he knows that it is, inside information sufficient to enable employment, office or
are not expected to information and he has it, and the recipient of that information profession –s.57 (2) (a) (ii)
demonstrate knowledge the knows that he has it, from an to identify the company whose Secondary Insiders
civil liability stream) inside source. securities are involved. i.e. if -The direct or indirect source
the person gives information of his information is a person
© 2021
