Financial Crime World

Businessman from Portrush: First Irish Conviction for Insider Trading

Background

  • For the first time in Irish history, a businessman, Mr. Declan Service, has been convicted of insider trading.
  • Service, a director of numerous Irish companies since at least 2007, was found guilty on October 31, 2022.

Insider Dealing Conviction

  • Service was convicted of possessing non-public, material information that was used in acquiring and disposing of financial instruments between May 18 and May 22, 2020.
  • The conviction stems from insider dealing, which is prohibited by regulation 5 of the European Union (Market Abuse) Regulations 2016 (MAR) and the Companies Act 2014.

Inside Information and Its Impact

  • Inside information, defined in MAR as precise, non-public information concerning issuers or financial instruments, may significantly affect instrument prices.
  • Regulation 5 of MAR prohibits someone in possession of inside information from engaging in the acquisition or disposal of such instruments or canceling/amending orders placed before possessing the information.

Previous Sanctions and Insights

  • Although the Central Bank of Ireland’s Enforcement Division imposed sanctions last year against a former public company director for misconduct that occurred in 2008, this marks the first criminal conviction for insider dealing in Ireland.
  • The lack of a detailed judicial examination due to Service’s guilty plea might have prevented valuable insights into the relevant conduct.

Implications and Best Practices

  • This case underscores the growing scrutiny of regulatory bodies and courts on business practices.
  • Corporate leaders are expected to adhere to high standards, and professionals, especially those who may occasionally hold material non-public information, are encouraged to follow best practices to avoid any suspicions of improper conduct.

Contact

For more information about this topic, please contact:

  • Liam Murphy, Senior Knowledge Lawyer
  • Or any other member of A&L Goodbody’s Corporate and M&A team.

Publication Date

November 7, 2022