The simple fact that a person in possession of inside information acted in the light of this information is enough to constitute insider dealing, according to a ruling made by the EU Court of Justice on 23 December 2009 (Case C-45/08 Spector Photo Group and Van Raemdonck.)

The case started as a legal dispute between Spector Photo company and the Belgian CFBA (the Banking, Financial and Insurance Commission). In 2006, the financial controller in Brussels accused Spector of having bought shares just before the publication of the results of the first half of the 2003 financial year. Since the company had performed well, a sharp increase in the Spector share price on the stock exchange could be anticipated. By altering the date of purchase of the own shares' to place the transaction at a date prior to the disclosure of turnover, Spector and Chris Van Raemdonck, its former general secretary in charge of purchasing, prevented a financial disadvantage for the company. Spector and Van Raemdonck appealed against the CFBA decision to the Hof Van Beroep (Court of Appeal) in Brussels, arguing that the transaction took place in the context of a buy-back of own shares under an employee stock option programme that is not considered by the EU directive as banned insider dealing. The Belgian courts then asked the ECJ to provide an interpretation of Directive 2003/6/EC on insider dealing and market manipulation1.

The key question submitted was whether insider dealing is deemed to exist from the mere fact that a person in possession of privileged information trades on the market in financial instruments to which that information relates or whether it is necessary, in addition, to establish that that person has knowingly used' that information. The ECJ recalled that Directive 2003/6/EC defines insider dealing objectively without taking into account the intention with which it was carried out, the aim being to introduce an effective and uniform system to ban insider dealing and to protect the integrity of the financial markets. The court also stressed that it is not contrary to the principle of presumed innocence that the perpetrator's intention can be inferred implicitly...

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