Malta’s Appeals Court Upholds Insider Trading Conviction Against Former GlobalCapital Director, James Blake
Court Dismisses Blake’s Appeal Against Insider Trading Conviction
Malta’s Appeals Court has rejected an appeal by former GlobalCapital director, James Blake, against a ruling that found him guilty of insider trading in 2007. The Financial Services Tribunal had determined that Blake, who was a senior executive at the insurance and investment firm at the time of the infringement, had traded shares in GlobalCapital (now known as Lifestar Holding) after gaining inside information about the company’s significant financial losses.
Insider Trading Allegations Against James Blake
Blake had been accused of trading shares in GlobalCapital following his knowledge of the company’s €1.8 million loss during a board meeting in December 2007. Despite admitting to the financial loss, Blake argued that the information was already publicly available through various company announcements.
The Financial Services Tribunal’s Decision
However, the Financial Services Tribunal, which is responsible for assessing the reasonableness of the MFSA’s insider trading conclusions, determined that the earlier company announcements were insufficient to disclose the specific financial loss information revealed at the board meeting. The tribunal found that:
- The November 2007 announcement was ambiguous and ambivalent, providing inadequate clarity about the company’s €1.8 million loss.
- Blake’s argument that the public was already informed of GlobalCapital’s financial struggles from the 2007 financial statements was unfounded, as profitability and loss are distinct concepts.
Blake’s Defense and the Court’s Decision
Despite attending the board meeting and learning about the €1.8 million loss, Blake claimed he was disposing of his shares as part of a larger plan to acquire a Sliema property. However, the tribunal remained suspicious, suspecting Blake may have chosen to sell his shares before the publication of the consolidated audited accounts, negatively impacting GlobalCapital’s share price.
In November 2021, Blake appealed the contested decision, citing inconsistencies in the application of evidence principles. However, the Court of Appeal denied his appeal and confirmed the Financial Services Tribunal’s verdict.