An individual is not guilty of insider dealing by virtue of dealing in securities or encouraging another person to deal if he shows that:

  • the information that he had as an insider was market information; and
  • it was reasonable for a person in his position to have acted as he did despite having that information as an insider at the time.

Market information is information concerning one or more of the following:

  • that securities have been or are to be acquired or disposed or that their acquisition or disposal is under consideration or negotiation;
  • that securities have not been or are not to be acquired or disposed;
  • the number of securities acquired or disposed or to be acquired or disposed or the acquisition or disposal of which is under consideration or negotiation;
  • the price or price range at which securities have been or are to be acquired or disposed under any of the above transactions; or
  • the identity of the persons involved or likely to be involved in any capacity in an acquisition or disposal.1

In determining whether it was reasonable for an individual to deal or encourage another to deal despite having market information at the time, the following factors need to be taken into account:

  • the content of the information;
  • the circumstances in which he first had the information and in what capacity; and
  • the capacity in which he dealt.

1 Criminal Justice Act 1993 (CJA), c. 36, Schedule 1(1)-(2) (UK).

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