• Publication Date: June 17, 2005
  • EAN: 9781862875630
  • 239 pages; 6" x 8⅝"
Filed Under: Commercial; Corporate

The Law of Insider Trading in Australia

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Product Description

This book provides a detailed and practical analysis of Australian Insider Trading Laws. Written jointly by Gregory Lyon of the Melbourne Bar and Professor du Plessis of Deakin University, the work:

Examines all fundamental concepts relating to insider trading such as ‘who is an insider’, ‘what is inside information’ and ‘when is information generally available’, together with commentaries on proposed changes to the laws and an examination of the impact of the most recent decisions, including Hannes, and Rivkin;

Provides a very detailed examination of the defences and exceptions, with particular attention to the operation of Chinese Walls;

Analyses fully and systematically the provisions on insider trading in the Corporations Act and the Criminal Code (Cth) within the context of decided cases and relevant secondary materials;

Covers comprehensively the penalties and remedies for contravention of the insider trading regime. This includes the intricate civil compensation provisions, and an up-to-date analysis of the civil penalties regime in light of ASIC v Petsas;

Discusses the operation and effectiveness of continuous disclosure as a means of preventing insider trading.

Introduction

Overview

The Definition of Insider Trading

Difficulties with the Definition of Insider Trading

Statement of the Definition

The Operation of the Current Legislative Provisions Prohibiting Insider Trading

Introduction

Complexity of Current Insider Trading Law

Jurisdictions of the Insider Trading Prohibitions

Who is an Insider?

What is Inside Information?

Possession of Insider Information

Material Effect of Information

When is Information Generally Available?

Introduction

Legislative History of Generally Available

The Publishable Information Test

Readily Observable

Deductions, Conclusions or Inferences and Market Analysts

Securities and Financial Products

The Requisite Mental State

The Transactions to Which the Prohibited Conduct Applies

Trading

Procuring

Communicating (‘Tipping’)

The Efficacy of the Operation of the Current Provisions

Conclusion

The Exceptions and Defences to the Prohibition

Introduction

Overview

The Various Use of the Terms ‘Exceptions’ and ‘Defences’

The Burden of Proof for the Operation of Exceptions and Defences

The Provenance of the Exceptions and Defences

The Legislative Exceptions to the Prohibition

Withdrawal from a Registered Scheme

Underwriting Agreements

Purchases Pursuant to Legal Requirement

Communication Pursuant to Legal Requirement

Chinese Walls

Exception for Knowledge of Person’s Own Intentions or Activities

The Exceptions under the Corporations Regulations

Director Obtaining a Share Qualification

Acquisition of Securities under a Superannuation or Pension Fund Scheme

Specified Insolvency Transactions in Good Faith

Sale Under a Mortgage, Charge, Pledge or Lien

The Statutory Defences

Reform of Defences

Conclusion

Penalites and Remedies

Introduction

Who may be the Subject of an Action?

Primary Liability as an Insider

Ancillary Liability

Criminal Consequences for Insider Trading

Initiating Prosecutions

Penalities for Insider Trading

Disqualification from Directorships/Managing a Corporation

Proceeds of a Crime

The Practical Operation of the Criminal Sanctions – Hannes and Rivkin

Overview

R v Hannes

R v Rivkin

Civil Remedies

Overview

Sections 1043L and 1317HA

The Trigger for Compensation

Specific Circumstances for the Order of Compensation

Civil Penalties

Nature of Civil Penalties

Declaration of Contravention

Pecuniary Penalty

Disqualification and Civil Penalties

Effectiveness of Civil Penalty Provisions

The Future Role of Civil Penalties

Conclusion

Enforcement and the Interrelationship Between Insider Trading and Continuous Disclosure

Introduction

Problems of Enforcement

Overview

Frequency of Insider Trading

Difficulties of Detection

An Inefficient Regulator?

The Complexity of the Legislation and the Inadequacy of Penalties

The Interrelationship Between Continuous Disclosure and Insider Trading

Overview of Suggested Solutions to Problems of Enforcement

The Continuous Disclosure and Insider Trading Provisions

The Theoretical Underpinnings of Australia’s Mandatory Disclosure Regime

Disclosing Entities and Entities Exempted From Continuous Disclosure

Entities Which Must Make Continuous Disclosure

Disclosure Requirements on Listed Disclosing Entities

The Disclosure Requirements for Unlisted Disclosing Entities

Information Which Must Be Disclosed

Australian Stock Exchange Listing Rules on Continuous Disclosure

Overview

The Operation of the Listing Rules in Respect to Continuous Disclosure

The Exception to the Disclosure Requirement

Structured/Periodical Disclosure

Enforcement of the Continuous Disclosure Requirements

Engendering a ‘Culture of Discussion’

Proposals for the Administrative Enforcement of Continuous Disclosure

Conclusion

Appendix One: Table of Australian Insider Trading Cases

Criminal Prosection

Civil Litigation

Key

Bibliography

Articles/Books/Reports

Case Law

Legislation

Other material

A concise but comprehensive introduction describes the contextual framework within which the insider trading prohibition exists. It outlines the development of the relevant legislation and explains the legislative and regulatory background to the law as it currently stands. It makes reference to the reports of various legislative and law reform bodies, as well as other secondary materials such as Explanatory Memoranda.

The bulk of the book comprises four main chapters, which explain the current provisions regulating insider trading, the exceptions and defences to the prohibition, penalties and remedies, and matters regarding enforcement and continuous disclosure. …

The main chapters are comprehensive and well written. Rather than separating academic and practical aspects, every part of the commentary refers directly to the relevant theoretical background and secondary material. As a result of this, the reader can readily find most of the relevant theoretical and practical information about each point, without spending too much time cross-referencing. This structure adds greatly to the usefulness of the book.

The Law of Insider Trading in Australia is a work of academic and practical merit. It will prove an indispensable reference to anybody faced with a question or problem concerning insider trading. – SJ Maiden, Australian Business Law Review, (2006) 34 ABLR 466

The obvious thoroughness of the research that underpins the legal propositions and policy matters that are discussed, along with the precise yet accessible nature of the manner in which the authors convey this information to the reader, mean that it is easy to recommend this book to all law students, academics, practitioners and judicial officers who are looking for a comprehensive reference work on the laws prohibiting insider trading in Australia. – Stephen Knight, (2006) 26 Qld Lawyer

The Law of Insider Trading in Australia comprehensively examines and explains each element of the insider trading offence. … Relevant case law, statutory provisions and academic commentary are reviewed in detail. Informative analyses of recent cases … are included. The impact of potential law reform proposals, such as those which have emanated from the Corporations and Markets Advisory Committee are also discussed. …

Most interestingly the relationship between insider trading laws and continuous disclosure obligations is examined in significant detail. This is a very well-considered chapter of the book, addressing the role of the Australian Stock Exchange in detecting and acting upon suspected insider trading activity, examining Australian continuous disclosure rules, as well as reviewing and discussing the perceived difficulties in successfully enforcing insider trading laws. …

I recommend this book very highly. … It is not a lengthy read, but the subject matter is addressed clearly and concisely presented in a well ordered and thoughtful style. It provides easy-to-read information about insider trading which will assist those who are only vaguely familiar with this offence, but more complex aspects of insider trading are also considered in significant detail for more demanding readers. – Juliette Overland, Company & Securities Law Journal Vol 24, 2006

A concise but comprehensive introduction describes the contextual framework within which the insider trading prohibition exists. It outlines the development of the relevant legislation and explains the legislative and regulatory background to the law as it currently stands. It makes reference to the reports of various legislative and law reform bodies, as well as other secondary materials such as Explanatory Memoranda.

The bulk of the book comprises four main chapters, which explain the current provisions regulating insider trading, the exceptions and defences to the prohibition, penalties and remedies, and matters regarding enforcement and continuous disclosure. …

The main chapters are comprehensive and well written. Rather than separating academic and practical aspects, every part of the commentary refers directly to the relevant theoretical background and secondary material. As a result of this, the reader can readily find most of the relevant theoretical and practical information about each point, without spending too much time cross-referencing. This structure adds greatly to the usefulness of the book. …

The Law of Insider Trading in Australia is a work of academic and practical merit. It will prove an indispensable reference to anybody faced with a question or problem concerning insider trading. – (2006) 34 ABLR 466

Rarely have two authors had a publication as timely as The Law of Insider Trading in Australia. Virtually every journalist would have required or should have acquired a copy of this text to assist them in the many and varied issues that arose in the recent Vizard action. …

The authors are to be commended for providing such a readable guide through the quite difficult provisions that make up the insider trading regime in Austrlaia. The text will certainly become essential reading for lawyers involved in the area, directors who may be tempted to profit from such information, and journalists. – Mark Harrick, Law Institute (Victoria) Journal, Vol 79.10, October 2005

For anyone still confused by the ins and outs of the Steve Vizard case, a must-read book was released this week, just days before Vizard’s civil case begins Federal Court. The Law of Insider Trading in Australia, by Gregory Lyon and Jean Jacques du Plessis (The Federation Press 2005) could become the Harry Potter of the legal world, although co-author du Plessis says the timing is just a "happy coincidence." – crikey.com.au, 19 July 2005

According to the foreword provided by MEJ Black AC, the Chief Justice of the Federal Court of Australia, the authors have “produced a scholarly work of great value which addresses pressing questions about Australia’s insider trading laws.” Even the most cursory consideration of the work serves to confirm the views expressed by the Chief Justice. …

This book makes an outstanding contribution to the body of corporations related texts in the country and is likely to become the pre-eminent source of reference for the law of insider trading in this country. It will be of considerable interest and assistance to students, academics and practitioners and individuals involved in law enforcement. – Anthony Lo Surdo, Barrister, Australian Banking and Finance Law Bulletin, Vol 21 No 3, August 2005

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