Re-evaluating the elements of the insider trading offence : should there be a requirement for the “possession” of inside information?

Research output: Contribution to journalArticlepeer-review

Abstract

Insider trading has a reputation as a complex and contentious offence, combining some of the more difficult aspects of both corporate and criminal law. In essence, insider trading is the act of trading in financial products (such as shares or other securities) while in possession of relevant non-public, price-sensitive information. A key element of the offence of insider trading is that the offender has possession of certain inside information. Cases which have interpreted the elements of insider trading have indicated that the “possession” of inside information necessarily imposes an “element of awareness” of the information, but the ordinary concept of possession under the criminal law will usually require a person to also have physical custody or control of the relevant item. This is a requirement with little practical relevance or application to insider trading. In order that the nature of the forbidden conduct is clearer, and for greater certainty and consistency under the law, the author proposes in this article that insider trading laws be reformed so that the “possession” element of the insider trading offence is replaced with a new requirement of “awareness”.
Original languageEnglish
Pages (from-to)256-273
Number of pages18
JournalAustralian Business Law Review
Volume44
Issue number4
Publication statusPublished - Aug 2016
Externally publishedYes

Keywords

  • insider trading
  • corporations law
  • law reform

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