Insider Trading

Author: Bill Doogue

Practice area: white collar offences

Bill is a founding Director of Doogue + George, ranked by Doyle's Guide as a Preeminent Criminal Defence Lawyer in Victoria (2026) and an LIV Accredited Criminal Law Specialist since 1998 with over 30 years of experience in complex criminal and corporate matters. His depth of experience in this area means clients receive accurate, considered advice.

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Bill authored this content and last revised it for accuracy on 6 August 2026.

What is the offence of Insider Trading?

Insider Trading is an offence under Division 3 of the insider trading prohibitions in Section 1043A of the Corporations Act 2001 (Cth). It involves dealing in shares (or other financial products) or sharing confidential, non-public information in a way that could influence trading.

Key points

What must be proved: Trading while possessing “inside information”, knowing or reasonably expected to know you had it
Also covered: Communicating inside information to another person where you knew or ought to have known they would trade
Which court: County Court (indictable offence)

The maximum penalty for Insider Trading is 15 years’ imprisonment.

Common defences may include … there was no insider trading; the information was generally available to the public; the person alleged to have been influenced already had access to the information through public means.

ASIC Interview

It you are suspected of having given confidential information or used confidential information to buy or sell shares, the Australian Securities and Investments Commission (ASIC) may require you to attend for an Examination under Section 19 of the ASIC Act. ASIC have far reaching powers that can include compelling you to attend for an examination to give evidence or provide documents. It is very important to understand what your rights and obligations are, and specifically, how to enliven the privileged against self-incrimination.

Lawyers at Doogue + George are highly skilled in advising on and appearing in these matters. It is imperative that you contact a lawyer as soon as possible for advice and representation at the Examination.

For more information on appearing before ASIC, follow the link below:

ASIC Investigations

What is the Legal Definition of Insider Trading?

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

In essence, insider trading occurs if a person trades in financial products while in possession of ‘inside information’ 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.

The term ‘inside information’ refers to information that is not generally available, and if it were generally available a reasonable person would expect it to have a material effect on the price or value of the stock or share price.

Did you engage in insider trading?

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 stockbroker 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 the impending liquidation of the company is public, the stockbroker tells his clients to sell all their shares in the company.

Pleading Not Guilty

If you are facing allegations of insider trading, our expert lawyers can steer you through the process of fully exploring defences that may be available to you. We can assist you to brief the barrister who is best suited to your case.

Defences

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.

Pleading Guilty

Pleading guilty can be a very daunting experience. It is a challenging time appearing at the Court and admitting wrongdoing. 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. We will work with you to understand the reasons for the offending, so the proper context is conveyed to the Court. Proper and thorough preparation is key to achieving the best results.

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.

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.

Our expert lawyers can appear with you at a Section 19 Examination at ASIC, and if there are criminal offences that follow. Getting the right advice at an early stage of your case can be critical in ensuring your rights are protected and you get the best outcome.

Contact an Insider Trading Expert at Doogue + George Defence Lawyers.

Case Studies

Articles

Additional Resources

A Contemporary Analysis of the Application of Sentencinf Factors in Insider Trading Cases

FAQ about Insider Trading

What must the prosecution prove for insider trading?

To establish insider trading, it must be shown that a person traded in financial products, or communicated information to another person, while they possessed inside information and knew or reasonably ought to have known it was inside information. The information must not have been generally available and must have been capable of materially affecting the value of the relevant financial products.

What is considered “inside information” under the law?

Inside information is information that is not generally available to the public and that a reasonable person would expect to have a material effect on the price or value of shares or other financial products if it were publicly released. The focus is on whether the information is both non-public and price-sensitive.

Is it illegal to tip someone else about a share opportunity?

Passing on inside information can amount to insider trading if the person communicating the information knows, or reasonably ought to know, that the recipient is likely to trade in financial products because of that information. Liability is not limited to the person who actually places the trade.

Who can be charged with insider trading?

Any person who engages in prohibited insider trading conduct can be charged, including those who trade themselves and those who communicate inside information to others in circumstances where it may be used for trading. The offence is not limited to company directors or employees.

What defences may be raised in an insider trading case?

Defences may include establishing that no insider trading occurred, that the information was already generally available to the public, or that the person allegedly influenced already had access to the same information independently. The availability of any defence depends on the specific facts of the case.

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