Title: Swaziland Cracks Down on Insider Trading: Understanding the Illegal Practice and Its Consequences

What is Insider Trading?

Insider trading refers to the practice of trading in the securities of a publicly traded corporation by individuals who possess valuable but confidential information.

• Individuals, called insiders, may buy or sell stocks before the information becomes publicly available, using the information to their advantage.

Types of Insider Trading

Two main types of insider trading exist:

Legal Insider Trading

• Occurs when insiders trade securities using public information.
• Permissible as long as they follow proper procedures.

Illegal Insider Trading

• Involves the use of material, non-public information for personal gain.
• Can significantly impact a company’s stock price and investor confidence.

Consequences of Insider Trading

Insider trading comes with severe repercussions:

1. Legal penalties

   • Civil and criminal charges
   • Substantial fines
   • Lengthy prison sentences

2. Reputational damage

3. Economic consequences

Penalties for Insider Trading in Swaziland

Under Swaziland law, insider trading offenses can result in:

1. Civil penalties

   • Fines
   • Disqualification from holding senior positions in publicly traded companies

2. Criminal sentences

   • Lengthy prison sentences
   • Fines

Examples of Insider Trading in Swaziland

Swaziland’s financial landscape has seen instances of insider trading:

• In 2018, a local pharmaceutical CEO, after receiving non-public information about an impending regulatory issue, sold company shares and faced hefty fines and a ban from the securities industry.