ICAEW BL · Chapter 13 · Question 8 of 10
Ines, a director of Rookwood plc, learns of an unannounced profit warning that will cause the company's share price to fall sharply. Under Part V of the Criminal Justice Act 1993, which of the following would NOT be an insider dealing offence by Ines?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Selling her Rookwood shares after the profit warning has been properly announced to the market
Explanation
The CJA 1993 creates three offences: dealing in price-affected securities on a regulated market while holding inside information as an insider, encouraging another person to deal, and disclosing inside information other than in the proper performance of one's employment, office or profession (s52). Encouraging is an offence even if the reason is not given, and disclosing to a shareholder relative is unlikely to fall within any defence. Inside information must not have been made public (s56 and s58), so once the warning has been properly announced it is no longer inside information and dealing afterwards is not insider dealing.
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