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Offences

Prohibited conduct by person in possession of inside information

Offence title:

 

Prohibited conduct by person in possession of inside information

Act:

 

1043A Corporations Act

Offence:

(1)   Subject to subdivision B (Div. 3, Part 7.10 of Chapter 7 of this Act):

(a)   A person (the insider) possess inside information; and

(b)   The insider knew, or ought reasonable have known, that the definition of “inside information” is satisfied;

the insider must not, as a principal or agent:

(c)    Apply for, acquire or dispose of Division 3 financial products, or enter any agreement to do so; or

(d)   Procure another person to as act described in (c).

Note: Failure to comply with this section is an offence: s. 1311(1).

 

Note: Failure to comply with this subsection is a contravention: s.1043N and 1317S.

 

(2)   Subject to this subdivision, if:

(a)   The insider possesses inside information; and

(b)   The insider knew, or ought reasonable have known, that the definition of “inside information” is satisfied; and

(c)    relevant Division 3 financial products are able to be traded on a financial market operated in this jurisdiction;

the insider must not, directly or indirectly, communicate the information, or cause the information to be communicated, to another person if the insider knows, or ought reasonably to know, that the other person would or would be likely to:

(d)   Apply for, acquire or dispose of Division 3 financial products, or enter any agreement to do so; or

(e)   Procure another person to as act described in (d).

Note: Failure to comply with this section is an offence: s. 1311(1).

 

Note: Failure to comply with this subsection is a contravention: s.1043N and 1317S.

 

Penalty:

 

(1)   and (2) - 15 years imprisonment

Summary/Indictable/mixed:

 

Indictable

Jurisdiction:

 

District or Supreme Court

How committed:

 

(1)   A lawyer working on a merger finds out information that indicates, post the merger between A and B, the shares in A will be worth much more. The lawyer purchases shares in A.

 

(2)   A lawyer working on a merger finds out information that indicates, post the merger between A and B, the shares in A will be worth much more. The lawyer tells his partner who purchases shares in A.

 

Important note:

Defence: ss. (1) For defences to a prosecution based on this subsection: s.1043M - Defences to prosecution for an offence

 

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