Market Abuse and Insider Dealing

Description

Market abuse and insider dealing remains and always has been a real concern for all those that operate in the financial sector. Some of the earliest laws relating to trade outlaw attempts to artificially interfere with the proper functions of the markets and ensure fairness. With recent changes to both the UK and European regimes the line between what is normal (and sensible) business practice and what may now be classified as market abuse is becoming increasingly fine. This raises questions about communications between financial institutions and investors, and about corporate and analyst access. Market Abuse and Insider Dealing provides guidance on and explanation of the range of potential legal and regulatory responses to this complex area of law. Providing a thorough analysis and assessment of the law relating to market abuse and insider dealing, the new fourth edition includes: About the Authors Preface Contents Table of Cases Table of Statutes Table of Statutory Instruments Chapter 1. The nature of insider dealing and market abuse Insider dealing in perspective What is insider dealing? Chapter 2. Insider dealing: the civil law A wrong to the market or the company? Conflicts of interest Secret profits Loss to the insider’s company A narrow obligation Benefiting another – a breach of duty? Shadow directors and others The position of investors Illegality and public policy Remedies Chapter 3. The main offences of insider dealing – dealing on the basis of inside information The law before 1980 The offence of insider dealing Insiders Encouraging insider dealing Disclosure of inside information Territorial scope of offences relating to encouragement and disclosure Tippee liability Secondary persons and tippee liability The FSMA 2000 and tippee liability Defences to allegations of insider dealing Chapter 4. The market abuse regime Introduction The UK market abuse regime The prescribed markets Qualifying investments Related investments Prescribed markets, qualifying investments and the Jabre case The duty to the market What constitutes market abuse Manipulating devices Insider and inside information Information that is ‘precise’ and has an ‘effect’ on price Behaviour The Code of Market Conduct (MAR) The MAR specifying behaviour Behaviour which does not amount to market abuse Safe harbours Regulatory enforcement and sanctions Private enforcement Regulatory policy and the Market Abuse Directive Conclusion Chapter 5. FSMA criminal offences of market manipulation Introduction Manipulation UK criminal offences for misleading statements and practices Market distortion and market manipulation Abusive squeezes FCA prosecution Analysis and conclusion Chapter 6. Fraud and financial crime Introduction The creation of false markets The common law The fair price Conspiracy Enforcing the bargain Fraud (by representation or conduct) Requisite state of mind – mens rea Proof of dishonesty and fraudulent intention Misrepresentation by words or conduct Silence Concealment Criminal Breach of Trust (CBT) Misappropriation (including theft) Requisite state of mind – mens rea Handling False statements and manipulation High pressure selling Fraudulent trading and insolvency related offences Reckless management of banks Blackmail and extortion Computer-related crime Corruption False reporting Forgery and the reliability of documentation Acts preparatory to fraud Perjury and false declarations Civil fraud Disclosure orders and freezing orders Disqualification procedures Offences by bodies corporate Conclusion Chapter 7. Anti-money laundering and proceeds of crime The corporate and financial dimension Money laundering in context Proceeds of crime 2017 Money Laundering Regulations – civil penalties Money laundering liability in the civil law Naughty knowledge and mens rea Compliance Confiscation Terrorist finance Chapter 8. Conflicts of interest A fundamental rule Directors and their duty of loyalty Multiple appointments Modification of duties Other fiduciaries Contracting out Informed consent A case at last! Conflicts compliance and the regulatory environment Chapter 9. Issuer disclosure and liability Disclosure and the issuer Disclosure obligations Disclosure and inside information Delayed disclosure Selective disclosure Managerial disclosures Safe harbours Issuer disclosure and third-party lists Issuer and senior officer liability Professional disclosure requirements Professionals and confidentiality FCA favours enhanced disclosure Disclosure of sustainability risks Issuer’s disclosure decision tree Takeovers General principles The Takeover Panel’s powers The FCA’s role Market abuse Actual or potential offerors Chapter 10. Information gathering Introduction General reporting and the obligation to cooperate The FCA’s statutory information gathering Chapter 11. Investigations Introduction Investigations and transparency Powers of investigation Confidentiality Sanctions for failing to comply with an investigation Criteria for enforcement action Case selection by the FCA Chapter 12. Enforcement issues Introduction Sanctions for market abuse Principles-based enforcement Statements and penalties Enforcement and the impact on positions of influence,
trading and business permissions Applications to the court Chapter 13. Compliance procedures and systems Introduction Compliance and authorised persons Authorisation, governance, senior management and compliance Governance and the need for policy, process, and procedure The compliance function and regulatory characteristics Authorised firms’ obligation to maintain records Compliance and conflicts management, and information barriers Personal account dealing rules Chapter 14. Personal liability of senior managers and compliance officers Personal responsibility The role of the law The duty of fidelity Contract and tort Accessory liability in equity Personal criminal liability Criminal proceedings Sentencing policy Regulatory liability, personal accountability – senior managers, certified persons and code staff Chapter 15. Control liability Responsibility and control Vicarious liability in the criminal law Vicarious liability in the law of tort Vicarious responsibility in restitution Directors’ knowledge Financial services regulation and control liability Control liability and authorisation Senior management function holders and controlled functions Chapter 16. The impact of other laws: domestic and overseas Introduction EU Market Abuse Regulation (EU MAR) EU MAR and market manipulation Buybacks and price stabilisation EU MAR and cross-border cooperation in investigations
and enforcement Extra-territorial application of US securities laws, foreign issuers
and anti-fraud provisions IOSCO and UK efforts at international cooperation Conclusion Index