IMPACT OF INSIDER TRADING LAWS IN AUSTRALIA
1.0 INTRODUCTION
Securities law in Australia is predominantly governed by the Corporations Act 2001(the Corporations Act). On the other hand, the Australian Securities and Investments Commission (ASIC) is charged with the mandate of regulating the securities market with insider trading being a current priority.
The Australian insider trading provisions are notoriously difficult to comprehend as they poise a conundrum in definitions of insider trading and insiders. Insider trading defeats the essence of the fiduciary duty bestowed upon an individual connected with the company and serves to diminish confidence in the financial market. It entails trading with the use of material non-public information …show more content…
This contravenes the duty of confidentiality and a conspicuous breach of the duty not to have a conflict of interest which poses to the reputation of the company and the value of its securities. It should be noted that the scope of fiduciary duty is limited to the company and the directors or officers of the company do not owe a fiduciary duty to the shareholders.
Misappropriation of information
The prohibition, in addition, servers to avoid misappropriation of information which entails use of price sensitive information that when the user owes a fiduciary duty to the owner of the information. Essentially misappropriation of information occurs where the fiduciary duty is breached. The abuse of propriety rights over insider information may injure the reputation of the company and destabilize the value of its financial products.
Market fairness and …show more content…
In the case of insider trading, dealing in the financial products in a manner that constitutes acquiring, disposing them and entering into an agreement to either acquire or dispose, amounts to trading. Procuring another person to trade and the communication of insider information also amounts to a transaction prohibited within the act.
The challenging question embedded in R v Evans was whether to treat the agreement as a normal contractual agreement for sale or purchase or it should be fashioned as conspiracy in the criminal perspective. The court was guided by the latter in this case since the entire act fulfilled the actus reus element of a crime.
A person may be guilty of procuring if he encourages or induces an act to done even though it is not beneficial to him. It has been argued that if the employee was not aware of the essential facts that amount to the offence then the principal will not be in breach of s 1043A(2). It is not necessary that they know that the acts amount to a crime but knowledge of the essential elements of the offence will
1.0 INTRODUCTION
Securities law in Australia is predominantly governed by the Corporations Act 2001(the Corporations Act). On the other hand, the Australian Securities and Investments Commission (ASIC) is charged with the mandate of regulating the securities market with insider trading being a current priority.
The Australian insider trading provisions are notoriously difficult to comprehend as they poise a conundrum in definitions of insider trading and insiders. Insider trading defeats the essence of the fiduciary duty bestowed upon an individual connected with the company and serves to diminish confidence in the financial market. It entails trading with the use of material non-public information …show more content…
This contravenes the duty of confidentiality and a conspicuous breach of the duty not to have a conflict of interest which poses to the reputation of the company and the value of its securities. It should be noted that the scope of fiduciary duty is limited to the company and the directors or officers of the company do not owe a fiduciary duty to the shareholders.
Misappropriation of information
The prohibition, in addition, servers to avoid misappropriation of information which entails use of price sensitive information that when the user owes a fiduciary duty to the owner of the information. Essentially misappropriation of information occurs where the fiduciary duty is breached. The abuse of propriety rights over insider information may injure the reputation of the company and destabilize the value of its financial products.
Market fairness and …show more content…
In the case of insider trading, dealing in the financial products in a manner that constitutes acquiring, disposing them and entering into an agreement to either acquire or dispose, amounts to trading. Procuring another person to trade and the communication of insider information also amounts to a transaction prohibited within the act.
The challenging question embedded in R v Evans was whether to treat the agreement as a normal contractual agreement for sale or purchase or it should be fashioned as conspiracy in the criminal perspective. The court was guided by the latter in this case since the entire act fulfilled the actus reus element of a crime.
A person may be guilty of procuring if he encourages or induces an act to done even though it is not beneficial to him. It has been argued that if the employee was not aware of the essential facts that amount to the offence then the principal will not be in breach of s 1043A(2). It is not necessary that they know that the acts amount to a crime but knowledge of the essential elements of the offence will