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Up to four years’ prison sentence for insider trading on the stock exchange

 
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Up to four years’ prison sentence for insider trading on the stock exchange

Pieter Helsen

Anyone who abuses his or her inside information to act on the stock exchange at the right time risks a 4-year prison sentence, which is 4 times more than was previously the case. This is the result of the amended legislation that became effective on 21 August 2017.   Furthermore, the type of action punishable has also been significantly extended. So, be careful if you have information on securities or shares and are active on the stock exchange!

 

The Act introduces a number of specifications and additions to the system as it was previously regulated.  For example, there is a specific provision that anyone who misuses inside information for one’s own or another person’s account with wilful intent is punishable. The circumstances under which such inside information came to his or her knowledge are irrelevant. Therefore, the punishability applies not only to people who gained knowledge of the inside information by virtue of their position as directors, investors, employees or intermediaries. The penalisation also applies to for example family members or acquaintances who have gained knowledge of the inside information through their relationship with the aforementioned people.

 

In addition, the amendment to the Act also provides for an extension of the forbidden act. Not only is it now punishable to acquire or alienate the financial instrument regarding which one has inside information. Changing an order that was placed before the respective person had the insider information has now also been made punishable.

 

Furthermore, the Act increases the sentences significantly. Whereas misuse of inside information could in the past only be punished by a maximum prison sentence of 1 year, a prison sentence of 4 years can now be given.

 

The heavy financial consequences of the crime that had already been provided under the earlier Act have been retained.

 

A monetary fine of EUR 80,000.00 can be imposed and, in addition, the offender can also be sentenced to the payment of a sum that corresponds to a maximum of three times the pecuniary gain that he or she made from the misuse.

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