A recent European Court of Justice (ECJ) case has provided more clarity into the prohibition on insider dealing as contained in the Market Abuse Directive. The ECJ determined that when a person who possesses inside information deals in financial instruments to which that information relates, there is a presumption that the inside information was used in dealing. Therefore unless the person who effected the dealing can rebut the presumption by demonstrating that the transaction was entered into legitimately, he will be guilty of insider dealing. While this has not yet been tested in Ireland, we would expect that the Irish courts would follow the ECJ decision.

Persons who are exposed to inside information should therefore be aware of the insider dealing rules and should carefully consider any potential transaction before proceeding to deal.

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Contributed by Susanne McMenamin.

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