White Collar & Corporate
8. Insider Trading
Authors: Staff Legal Eagle
Firm / Chambers:
Last updated: 16 Sep 2015
- Offences relating to insider trading are Commonwealth crimes that are prosecuted by the Commonwealth DPP.
- Either an individual or a company can be prosecuted for insider trading.
- Insider trading is when someone uses inside information to buy or sell stocks in the stock market or to trade in financial products.
- Inside information refers to information or communications that are not publicly available. Usually this information is accessible to only a few people and is gained through a person’s employment.
- The prosecution does not need to prove that you knew that this information was not available to the public just that a reasonable person would have known.
- Financial products are defined in the law and cover securities that can be traded on the stock market.
- There are some statutory exceptions in the Corporations Act 2001 (Cth) that may be a defence to this charge such as:
- the underwriter defence;
- the Chinese wall defence; and
- the knowledge defence.
- A lawyer is the best person to explain these to you and give you advice about whether or not they apply in your situation.
- For an individual this offence carries a maximum penalty of ten years jail and a maximum fine of $450,000.
View more Information on Criminal Law