Insider dealing is illegal. It is also contrary to
the ethical rules. People who during the course of their work come across ‘unpublished
price-sensitive information’ are prohibited from dealing in securities to which
that information relates.
the ethical rules. People who during the course of their work come across ‘unpublished
price-sensitive information’ are prohibited from dealing in securities to which
that information relates.
Unpublished price-sensitive information covers
specific matters not generally known
specific matters not generally known
to those who normally deal on the stock
exchange but which, if it were known to them, would alter the prices of those
securities to which the information relats.
The prohibition applies to anyone who has a
connection at present or had one at any time in the previous six months and to
any third person whom the insider may wish to instruct.
connection at present or had one at any time in the previous six months and to
any third person whom the insider may wish to instruct.
Auditors with their close connection with the
accounts of a public company client are often in possession of insider
information. For example, they may know that the profit is £12 million when the
market is expecting only £10 million. They
must not toke advantage of this information by buying shares in the
company on the expectation of a rise in the price when the accounts are
published.
accounts of a public company client are often in possession of insider
information. For example, they may know that the profit is £12 million when the
market is expecting only £10 million. They
must not toke advantage of this information by buying shares in the
company on the expectation of a rise in the price when the accounts are
published.
