Insider Dealing & Market Abuse

An accusation of insider dealing or market abuse is a direct challenge to your professional integrity and can have catastrophic consequences. These are highly complex financial offences, investigated with the full force of the Financial Conduct Authority (FCA). The law in this area is designed to protect the fairness and integrity of financial markets, meaning that investigations are intrusive, lengthy, and can lead to severe penalties, including prison sentences and unlimited fines. Facing such an allegation requires immediate, specialist legal representation.

At Central Chambers Law, our senior legal consultants are experts in defending against allegations of insider dealing and market abuse. We possess a deep understanding of the intricate regulations and the sophisticated methods used by the FCA to build a case. Our function is to provide a powerful, strategic defence that scrutinises the evidence, challenges the prosecution's narrative, and protects your career and liberty. We are specialists equipped to handle the immense pressure and complexity of these high-stakes financial crime investigations.

Understanding the Offences: What are Insider Dealing and Market Abuse?

Insider dealing and market abuse are two distinct but related concepts designed to prevent the misuse of information and manipulation of financial markets.

• Insider Dealing: This is a criminal offence under the Criminal Justice Act 1993. It occurs when an individual who has confidential, price-sensitive information (inside information) uses it to trade in securities like stocks and shares for their own profit or to avoid a loss.
• Market Abuse: This is a civil offence governed by the UK Market Abuse Regulation (MAR). It is much broader than insider dealing and covers a range of behaviours that undermine market integrity, including misusing inside information and manipulating the market. Because it is a civil offence, the standard of proof is lower, making it easier for the FCA to take action.

An individual can be investigated for both criminal insider dealing and civil market abuse for the same set of actions.

The Key Elements of the Offences

To secure a conviction or finding of liability, the FCA must prove several key elements.

For Insider Dealing (Criminal), the prosecution must show you:

1. Possessed information that was specific, not public, and likely to have a significant effect on the price of a security.
2. Knew it was inside information.
3. Used that information by dealing in the relevant securities, encouraging someone else to deal, or unlawfully disclosing the information.

For Market Abuse (Civil), the FCA needs to establish behaviour such as:

• Misuse of Inside Information: Engaging or attempting to engage in insider dealing.
• Unlawful Disclosure: Disclosing inside information to another person outside the normal course of employment or duties.
• Market Manipulation: Placing orders or executing trades that give false or misleading signals about the supply, demand, or price of a financial instrument, or securing an artificial price.

How the FCA Investigates These Cases

The FCA has a specialist enforcement division and powerful investigative tools to detect and prosecute market abuse and insider dealing.

Common investigative methods include:

• Sophisticated Data Analysis: Using advanced software to monitor trading patterns across markets to identify suspicious activity.
• Information Gathering Powers: Compelling individuals and firms to provide trading data, communications (emails, text messages, phone records), and other documents.
• Interviews Under Caution: Requiring suspects to attend formal interviews where their answers can be used in evidence against them.
• Whistleblower Reports: Acting on intelligence provided by individuals within the financial industry.

The FCA's objective is to piece together trading data and communications to prove that a trader possessed and acted on inside information or otherwise manipulated the market.

Why Central Chambers Law Provides the Definitive Defence

Defending an insider dealing or market abuse allegation requires a legal team with highly specialised knowledge of financial markets, regulations, and FCA procedures.

Clients trust Central Chambers Law because we are experts in this niche and complex area of law. Our reputation is built on our ability to meticulously analyse the evidence and build a powerful defence against the FCA's allegations. Our strategic approach involves:

• Challenging the 'Inside Information': We forensically examine whether the information you held actually meets the strict legal definition of inside information. Was it specific enough? Was it already in the public domain?
• Contesting the Link to Trading: We attack the prosecution's assertion that your trading decisions were based on the alleged inside information. We build a case to show that the trades were made for legitimate reasons, based on your own research or pre-existing trading strategy.
• Expert Analysis of Trading Data: We do not simply accept the FCA's interpretation. We instruct our own independent market experts to analyse the trading data and provide a counter-narrative that supports an innocent explanation for your actions.
• Managing the FCA Investigation: We engage with the FCA on your behalf from the outset. We guide you through the entire process, including preparing you for interviews under caution and managing the disclosure of information to protect your legal position.

Our focused expertise means we are equipped to provide the formidable, high-level representation required to defend your reputation and liberty.

Consequences of a Finding or Conviction

The penalties for insider dealing and market abuse are severe, reflecting their impact on market integrity.

• Insider Dealing (Criminal): The maximum sentence is 10 years' imprisonment and an unlimited fine.
• Market Abuse (Civil): Penalties include unlimited fines, public censure, and bans from working in the regulated financial services industry.

A finding or conviction can end a career and lead to significant financial and personal ruin, including asset confiscation under the Proceeds of Crime Act (POCA).

Protect Your Career and Liberty with an Expert Defence

Being investigated for insider dealing or market abuse is a direct threat to your career, reputation, and freedom. The early decisions you make in an FCA investigation are critical.

Do not face this specialist and aggressive regulator alone. Contact our expert financial crime solicitors immediately for a confidential consultation and take the first essential step in building your strategic defence.

‍