The law of insider trading in Australia

This book provides a detailed and practical analysis of Australian insider trading laws. The work: examines all fundamental concepts relating to insider trading such as 'who is an insider', 'what is inside information' and 'when is information generally available', together with commentaries on proposed changes to the laws and an examination of the impact of the most recent decisions, including Hannes, and Rivkin; provides a very detailed examination of the defences and exceptions, with particular attention to the operation of Chinese Walls; analyses fully and systematically the provisions on insider trading in the Corporations Act and the Criminal Code (Cth) within the context of decided cases and relevant secondary materials; covers comprehensively the penalties and remedies for contravention of the insider trading regime (including the intricate civil compensation provisions, and an up-to-date analysis of the civil penalties regime in light of ASIC v Petsas); and discusses the operation and effectiveness of continuous disclosure as a means of preventing insider trading.

An examination of Australia's insider trading laws

Considers that the effective regulation of insider trading is desirable in order to maintain investor confidence in Australia's share markets. Although the current laws and the use of continuous disclosure provide a workable foundation, the thesis further considers the ways in which insider trading may be more effectively regulated and prosecuted in Australia.

Insider Trading in Germany - Do Corporate Insiders Exploit Inside Information?

Our study focuses on the question whether corporate insiders in Germany exploit inside information while trading in their company’s stock. In contrast to prior international studies, which are not able to link insider transactions to a formal definition of inside information, we relate insider transactions to subsequent releases of inside information via ad-hoc news disclosures. We find evidence that corporate insiders as a group seem to trade on inside information. Moreover, members of the supervisory board seem to be most active in exploiting inside information, since they realize exceptionally high profits with their frequent front-running transactions.

Insider trading, investment, and liquidity: a welfare analysis

We compare competitive equilibrium outcomes with and without trading by a privately infonned "monopolistic" insider, in a model with real investment portfolio choices ex ante, and noise trading generated by aggregate uncertainty regarding other agents' intertemporal consumption preferences. The welfare implications of insider trading for the ex ante expected utilities of outsiders are analyzed. The role of interim infonnation revelation due to insider trading, in improving the risk-sharing among outsiders with stochastic liquidity needs, is examined in detaiL

Sanctions and public enforcement of insider trading laws in Europe

The recent financial crisis triggered an increasing demand for financial regulation to counteract the potential negative economic effects of the evermore complex operations and instruments available on financial markets. As a result, insider trading regulation counts amongst the relatively recent but particularly active regulation battles in Europe and overseas. Claims for more transparency and equitable securities markets proliferate, ranging from concerns about investor protection to global market stability. The internationalization of the world’s securities market has challenged traditional notions of regulation and enforcement. Considering that insider trading is currently forbidden all over Europe, this study follows a law and economics approach in identifying how this prohibition should be enforced. More precisely, the study investigates first whether criminal law is necessary under all circumstances to enforce insider trading; second, if it should be introduced at EU level. This study provides evidence of law and economics theoretical logic underlying the legal mechanisms that guide sanctioning and public enforcement of the insider trading prohibition by identifying optimal forms, natures and types of sanctions that effectively induce insider trading deterrence. The analysis further aims to reveal the economic rationality that drives the potential need for harmonization of criminal enforcement of insider trading laws within the European environment by proceeding to a comparative analysis of the current legislations of height selected Member States. This work also assesses the European Union’s most recent initiative through a critical analysis of the proposal for a Directive on criminal sanctions for Market Abuse. Based on the conclusions drawn from its close analysis, the study takes on the challenge of analyzing whether or not the actual European public enforcement of the laws prohibiting insider trading is coherent with the theoretical law and economics recommendations, and how these enforcement practices could be improved.

O abuso de informação privilegiada (insider trading)

In the stock market, information takes on special relevance, due to the market’s permanent updating and the great fluidity of information existent therein. Just as in any other negotiations, the party with the better information has a bargaining advantage, as it is able to make more advantageous business decisions. However, unlike most other markets, the proper functioning of the stock market is greatly dependent on investors’ trust in the market itself. As such, if there are investors who, due to any condition they possess or office they hold, have access to relevant information which is not accessible to the general public, distrust is bred within the market and, consequently, investment is lessened. Thus, there is a need to prevent those who hold privileged information from using it in abusive ways. In Portugal, abuse of privileged information is set out and punished criminally in Article 378. of the Portuguese Securities Code (‘Código dos Valores Mobiliários’). In this dissertation, I have set out, firstly, to analyze the inherent conditions for there to be a crime of abuse of privileged information; secondly, to analyze two well-known cases, which took place and were decided in other jurisdictions, and attempt to understand how these cases would fall under Article 378. of the Portuguese Securities Code. Whereas the first case, Chiarella v. United States, was scrutinize under Article 378 of the Portuguese Securities Code, in the second, Lafonta v. AMF, the conclusion arrived at was that the crime taken place was different. This analysis allowed, on one hand, the application to a particular case of prerequisites and concepts which were explained, at a first approach, from a more theoretical perspective; on the other hand, it also allowed the further development of specific aspects of the regime, namely the difference between an insider and a tipee, as well as to more clearly set out the limits to the precise character of the information at hand.

Merger announcements and insider trading activity in India: an empirical investigation

Insider trading activity is investigated prior to merger announcement in Indian capital market. An attempt is made to check it out whether trading takes place on the basis of asymmetric and private information. For examining the behaviour of stock prices a modified market model is used to estimate the parameters for the estimation window. These estimates are used to compute average return and cumulative average returns for the event window, which are measures of abnormal returns. Besides price run-ups, it is also common to see unusually high levels of share trading volume before public announcement of merger. Daily trading volume pattern of the target companies is also investigated. The analysis carried out in this study is based on a sample of 42 companies for which merger announcement date was announced during the period of 1996-1999. Based on the analysis for each company individually, we recommend investigation in six companies for existence of possible insider trading.

O insider trading no direito brasileiro

O insider trading é ilícito de elevado potencial danoso, pois impacta não só as pessoas diretamente relacionadas com a operação realizada com a informação privilegiada, mas também o mercado de capitais como um todo, afetando a confiança dos investidores. É importante, portanto, a repressão severa do ilícito nas esferas administrativa, civil e penal, destacando-se o papel regulador da Comissão de Valores Mobiliários, enquanto representante da intervenção do poder estatal no âmbito do mercado de capitais. Não obstante, para a responsabilização pelo ilícito do insider trading, deve-se exigir um conjunto probatório robusto, ainda que apenas indiciário. A utilização de uma espécie de muralha segregadora, se minimiza situações de conflito de interesses ao evitar o acesso amplo a informações relevantes não divulgadas ao mercado, não é, por si só, capaz de excluir responsabilidade por eventual insider trading. Importante ter cuidado com construções teóricas, como a da “mente corporativa”, capazes de esvaziar de utilidade barreiras como uma Chinese Wall. Impossível transpor a teoria do domínio do fato à apuração de ilícitos de insider trading.

Legislative proposals to codify directors' liability for insolvent trading in Hong Kong : a 10-year journey

Hong Kong is a modern global city with a reputation for well-regulated financial markets, but for years, the government had been trying to enact laws on corporate rescue procedures with relatively little success. It is under the pretext of the Global Financial Crisis, the threat of a future economic meltdown gave the Hong Kong government the impetus to revisit this issue. This third attempt to codify statutory obligations on directors’ liability for insolvent trading has been criticised for either setting the standards too high or low for directors trading whilst insolvent. There is also some reservation given the beliefs and values of directors in Chinese family-owned and controlled companies. These companies would most likely trade out the difficult times. Nevertheless, this does not negate from the fact that the enactment of corporate rescue procedures in Hong Kong in 2010 is a momentous achievement for the Hong Kong government.

Learning from the past to predict the future: an historical analysis of grass invasions in northern Australia

An important focus of biosecurity is anticipating future risks, but time lags between introduction, naturalisation, and (ultimately) impact mean that future risks can be strongly influenced by history. We conduct a comprehensive historical analysis of tropical grasses (n = 155) that have naturalised in Australia since European settlement (1788) to determine what factors shaped historical patterns of naturalisation and future risks, including for the 21 species that cause serious negative impacts. Most naturalised species were from the Old World (78 %), were introduced for use in pasture (64.5 %), were first recorded prior to 1940 (84.5 %) and naturalised before 1980 (90.3 %). Patterns for high-impact species were similar, with all being first recorded in Australia by 1940, and only seven naturalised since then-five intentionally introduced as pasture species. Counter to expectations, we found no evidence for increased naturalisation with increasing trade, including for species introduced unintentionally for which the link was expected to be strongest. New pathways have not emerged since the 1930s despite substantial shifts in trading patterns. Furthermore, introduction and naturalisation rates are now at or approaching historically low levels. Three reasons were identified: (1) the often long lag phase between introduction and reported naturalisation means naturalisation rates reflect historical trends in introduction rates; (2) important introduction pathways are not directly related to trade volume and globalisation; and (3) that species pools may become depleted. The last of these appears to be the case for the most important pathway for tropical grasses, i.e. the intentional introduction of useful pasture species. Assuming that new pathways don't arise that might result in increased naturalisation rates, and that current at-border biosecurity practices remain in place, we conclude that most future high-impact tropical grass species are already present in Australia. Our results highlight the need to continually test underlying assumptions regarding future naturalisation rates of high-impact invasive species, as conclusions have important implications for how best to manage future biosecurity risks.

Restrictions in pub closing times and lockouts in Newcastle, Australia five years on.

In 2008 pub closing times were restricted from 5 am to 3:30 am in the central business district (CBD) of Newcastle, Australia. A previous study showed a one-third reduction in assaults in the 18 months following the restriction. We assessed whether the assault rate remained lower over the following 3.5 years and whether the introduction of a 'lockout' in nearby Hamilton was associated with a reduction in assaults there.