Penalties for insider trading imposed by the High Court
- June 14, 2022
- Jonathan Earl
- Comments Off on Penalties for insider trading imposed by the High Court
In a recent case, the president of the High Court has confirmed penalties on the former chief executive of several well-known companies for insider trading. Philip Lynch, a former chairman of An Post, One51 and IAWS, is the first person in Ireland to be found to have engaged in insider trading.
The Central Bank of Ireland (Central Bank) is the competent authority in Ireland for the Market Abuse Regulation (MAR) which includes supervisory authority over MAR compliance by issuers of financial instruments. Market abuse is unlawful behaviour on financial markets. It impedes market transparency, a prerequisite for trading on financial markets. It comprises insider dealing, unlawful disclosure of inside information, market manipulation or related attempts.
The probe into Mr Lynch was conducted by the Central Bank’s enforcement division and the outcome assessed by a panel made up of a number of retired senior judges. It found that Mr Lynch breached market abuse regulations governing the area of insider dealing when he bought 200,000 shares in the publicly listed company C&C on October 21st, 2008.
The insider information related to the recruitment of a new chief executive of the company, John Dunsmore. Mr Lynch explained did not oppose the order that was being sought confirming the sanctions. His Barrister said it was not a typical case, as Mr Lynch had not gained from his investment in the company and had lost substantially from his ownership of its shares. It was submitted that he had not acted covertly and had announced his trades to the market.
The decision resulted in Mr Lynch receiving a public caution, a fine of €75,000, and has been disqualified from participating in the business of a regulated financial services firm for a period of five years. He must also pay €37,500 in costs to the Central Bank.
NB – This is a guide for information purposes only and does not constitute legal advice. If you have an issue requiring legal advice, please contact any of the team at Nolan Farrell & Goff LLP, whose numbers can be found on our website www.nfg.ie, or email firstname.lastname@example.org.