
Contents
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Introduction Introduction
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CJA Insider Dealing CJA Insider Dealing
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The criminal law—insider dealing The criminal law—insider dealing
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Criminal Justice Act 1993, Part V Criminal Justice Act 1993, Part V
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Territorial Scope Territorial Scope
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The Offences The Offences
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The dealing offence—section 52(1) The dealing offence—section 52(1)
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‘Securities’ ‘Securities’
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‘Dealing in securities’ ‘Dealing in securities’
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‘Professional intermediary’ ‘Professional intermediary’
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The encouraging offence—section 52(2)(a) The encouraging offence—section 52(2)(a)
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The ‘disclosure’ offence—section 52(2)(b) The ‘disclosure’ offence—section 52(2)(b)
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Having ‘Inside Information’ as an ‘Insider’ Having ‘Inside Information’ as an ‘Insider’
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‘Inside information’ ‘Inside information’
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Scope Scope
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‘Particular securities’ and ‘particular issuers of securities’ ‘Particular securities’ and ‘particular issuers of securities’
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‘Specific’ or ‘precise’ ‘Specific’ or ‘precise’
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‘Made public’ ‘Made public’
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Star analysts Star analysts
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As an ‘insider’ As an ‘insider’
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‘Insider’ ‘Insider’
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‘From an inside source’ ‘From an inside source’
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Price-affected securities—the dealing offence and the encouraging offence Price-affected securities—the dealing offence and the encouraging offence
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Defences Defences
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General defences—section 53 General defences—section 53
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No expectation of profit No expectation of profit
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Wide disclosure Wide disclosure
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Immaterial information Immaterial information
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No expectation of dealing No expectation of dealing
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Special defences—Schedule 1 Special defences—Schedule 1
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Market makers Market makers
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Market information Market information
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Price stabilisation Price stabilisation
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Penalties and Prosecution Penalties and Prosecution
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Key Steps in Proving CJA Insider Dealing Key Steps in Proving CJA Insider Dealing
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Cases Cases
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Flow Chart Flow Chart
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Part 7 Financial Services Act 2012: Offences in Relation to Financial Services Part 7 Financial Services Act 2012: Offences in Relation to Financial Services
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Misleading Statements Misleading Statements
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Defence Defence
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Territorial scope Territorial scope
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Misleading Impressions Misleading Impressions
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Defences Defences
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Territorial Scope Territorial Scope
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Sanctions Sanctions
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Relevant Investments and Relevant Agreements Relevant Investments and Relevant Agreements
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No Civil Law Right of Action Under Sections 89 and 90 FSA 2012 No Civil Law Right of Action Under Sections 89 and 90 FSA 2012
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Effectiveness of the Offences Effectiveness of the Offences
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Type of actions brought under FSA 1986, section 47 Type of actions brought under FSA 1986, section 47
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Interrelation with other offences and processes Interrelation with other offences and processes
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AIT—the first prosecution under section 397 AIT—the first prosecution under section 397
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Misleading Statement etc. in Relation to Benchmarks Misleading Statement etc. in Relation to Benchmarks
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Other Regulatory Provisions Relating to Undesirable Market Conduct Other Regulatory Provisions Relating to Undesirable Market Conduct
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Introduction Introduction
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Other Requirements Other Requirements
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FCA and exchange rules FCA and exchange rules
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Listing Rules, Prospectus Rules, and the Disclosure and Transparency Rules Listing Rules, Prospectus Rules, and the Disclosure and Transparency Rules
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Sanctions for non-compliance with the Disclosure Rules Sanctions for non-compliance with the Disclosure Rules
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The basic rule on the disclosure of inside information The basic rule on the disclosure of inside information
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Exception from the basic rule allowing an issuer to delay disclosure Exception from the basic rule allowing an issuer to delay disclosure
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Provisions relating to the control of insiders and inside information Provisions relating to the control of insiders and inside information
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The City Code on Takeovers and Mergers The City Code on Takeovers and Mergers
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Regulatory and Prosecuting Bodies Regulatory and Prosecuting Bodies
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Interaction between the various regulatory and prosecuting bodies with powers relating to market misconduct Interaction between the various regulatory and prosecuting bodies with powers relating to market misconduct
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Overview of the UK’s Prosecuting Bodies Overview of the UK’s Prosecuting Bodies
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The FCA The FCA
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The Department for Business, Innovation and Skills The Department for Business, Innovation and Skills
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The Serious Fraud Office The Serious Fraud Office
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Public prosecution bodies Public prosecution bodies
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Other Powers of Review, Enquiry, and Discipline Other Powers of Review, Enquiry, and Discipline
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Exchanges Exchanges
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The Takeover Panel The Takeover Panel
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The police The police
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Interaction Between the FCA and Other Prosecuting Bodies Interaction Between the FCA and Other Prosecuting Bodies
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The Prosecuting Guidelines The Prosecuting Guidelines
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Interaction between the FCA and other bodies with regulatory powers Interaction between the FCA and other bodies with regulatory powers
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Memorandum of Understanding with the Police Memorandum of Understanding with the Police
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Interaction with overseas regulators under MAD Interaction with overseas regulators under MAD
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10 Insider Dealing and Misleading Statements and Impressions
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Published:March 2014
Cite
Extract
Introduction
Having considered in Chapter 9 the civil market abuse offences brought in under FSMA,1 and revised following the implementation of MAD,2 this chapter will consider the criminal offences of insider dealing under the Criminal Justice Act 1993 (‘CJA’) and misleading statements and impressions under Part 7 of the Financial Services Act 2012 (‘FSA 2012’), as well as considering briefly regulatory requirements relating to market misconduct. It will then outline the roles of the various regulatory and prosecuting authorities with power to take action in respect of market misconduct and how these bodies interact.3 With effect from 1 April 2013 the Financial Conduct Authority (‘FCA’) took over responsibility for prosecuting offences under the CJA and FSA 2012 from the previous Financial Services Authority (‘FSA’).
The Financial Services and Markets Act 2000 as amended.
Directive 2003/6/EC on insider dealing and market manipulation (market abuse).
This chapter does not deal with other offences, such as common law offences or offences under the Fraud Act 2006.
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