Financial Crime World

Mauritius Cracks Down on Insider Trading: A Look at the FSC’s Powers and Consequences

In the financial hub of Mauritius, the following laws regulate various financial misdemeanors, including insider trading:

  • Securities Act 2005
  • Financial Services Act 2007

Laws Governing Financial Misdemeanors in Mauritius

The Securities Act 2005 prohibits:

  • Insider trading
  • False trading in securities
  • Market rigging
  • Securities fraud
  • False or misleading conduct

The Mauritian Financial Services Commission (FSC) and Stock Exchange of Mauritius are responsible for enforcing these regulations.

The FSC’s Powers During Investigations

The Financial Services Act 2007 provides the FSC with the following authorities during investigations:

  1. Enter business premises with reasonable notice
  2. Search for and seize relevant documents
  3. Administer oaths or affirmations
  4. Summon individuals or organizations for interrogation

Consequences of Insider Trading

Insider trading, a serious offense, entails consequences such as:

  • Compensation up to the profit gained or losses avoided due to insider dealing
  • Funds recovered are deposited into a compensation fund for affected investors

The Investigative Process

  1. Authorization for Investigation: An authorized FSC investigator executes searches for evidence on business premises.
  2. Securing Evidence: Relevant documents are secured during the investigation.
  3. Witnesses: Witnesses may be administered oaths during investigations.
  4. Confidentiality: Investigations are typically conducted in strict confidence to uncover unlawful activities.
  1. Presentation of Findings: The FSC presents its findings before a court if investigations reveal insider trading.
  2. Court Ruling: If the court rules in favor of the FSC against the offender, they are ordered to pay damages.
  3. Amount of Damages: Damages are equal to the profit earned or loss avoided due to insider trading.

The Importance of Fighting against Financial Misdemeanors

Mauritius’s enforcement actions demonstrate the government’s commitment to:

  1. Ensuring financial stability
  2. Promoting equity in the investment arena
  3. Maintaining the reputation of Mauritius as a reputable financial center