Insider Trading

What is Insider Trading?
Insider Trading is an offence under the Australian Corporations Act 2001. It is a criminal offence for a person who has access to confidential information about a company to use this information to trade in stock or securities. The penalties for insider trading are very severe and can include prison sentences.
Insider Trading
Police Interview
Police officers are trained in interview techniques and they interview people every day. They will ask you questions to rattle you or present information in a way that makes it seem that a conviction is inevitable. You might think your only option is to try and explain your side of the story or give an excuse for your behavior. Any admissions made during an interview only serve as evidence against you at trial or show the jury in Court that you are a liar if you are called to give evidence and you explain things differently. The Police are not searching for the truth, they only want to gather evidence so that they can Prosecute you. Don’t make it easier for them. Call our lawyers to get advice before attending any interview with Police.

Pleading Not Guilty
Our lawyers are experts at preparing for trial and we secure not guilty verdicts all the time. There is a lot at stake in a criminal trial and it is important that the firm you work with has accredited criminal law specialists on their team. We have several. Our firm has in-house counsel who can work with you through every stage of the matter. We can assist you to prepare to give evidence. We can assist you to brief more senior counsel where appropriate or where it is simply desirable. Our jury trial experts can provide the passion and skill to help you successfully defend the charges levelled against you.

Pleading Guilty
Pleading guilty can be a very daunting experience. We are experienced at plea making and achieving the best possible outcomes for our clients at sentencing. We care about your personal circumstances and history and work hard to make sure the Court cares as well. There are a number of hearings before simply turning up to Court for your plea if it is at the County Court. Our lawyers can help you through the process so that you can accept responsibility for the charges and move on with your life.

Which court will the case be heard in?
Given the serious nature of Insider Trading, it will usually be dealt with in the County Court as an indictable offence.

Examples of Insider Trading
  • The CEO of a company finds out that the company is going to be taken over. The takeover has not yet been publicly announced. The CEO gets his wife to buy shares in the company knowing that the share price is likely to rise.
  • A stock broker hears from his friend that the share price of a listed company is going to drop because the company is in serious debt and needs to liquidate its assets. Before liquidation of the company is public, the stock broker tells his clients to sell all their shares in the company.
What is the legal definition of Insider Trading?
A person trades in financial products while in possession of ‘inside information’. And knowing or they ought reasonably to have known that they were in possession of inside information at the time. If a person passes on ‘inside information’, they can also be liable under insider trading laws.

“Did you engage in insider trading?”

The law for this offence can be found in division 3 of the insider trading prohibitions of the Corporations Act 2001.

  • There was no insider trading.
  • The information is generally available to the public.
  • The person you are alleged to have influenced in insider trading, already had access to that information through public means.
There are other possible defences, depending on the circumstances surrounding the alleged offending. Each matter is unique and requires an individual approach and strategy.

Questions in cases like this
  • Did you have access to inside information?
  • When did the information become publicly available and when are you alleged to have engaged in insider trading?
  • Did you engage in trading based on this information?
  • Can they prove your trading was based on inside information?
  • Did the person you are alleged to have influenced to engage in insider trading already have access to this information through public means?
Maximum penalty for division 3 of the insider trading prohibitions of the Corporations Act 2001
Insider trading (division 3 of the insider trading prohibitions of the Corporations Act 2001) is a serious offence which attracts a maximum sentence of 15 years imprisonment.

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