The European Insider Trading Regulation after the ECJ’s Spector Photo Group Decision

European Company and Financial Law Review (ECFR,) February 2010

21 Pages Posted: 10 Mar 2010  

Lars Klöhn

Humboldt University of Berlin - Faculty of Law

Abstract

Securities laws around the world agree that purchasing or selling financial instruments in possession of non-public, price-relevant information does not by itself constitute insider dealing. However, requiring more than the knowing possession of such information while trading – e.g. requiring some kind of fraudulent intent – might impede the effectiveness of any insider trading prohibition. Therefore, securities laws worldwide have to answer the question what exactly constitutes the mens rea requirement of insider trading. In a recent preliminary ruling, the European Court of Justice (“ECJ”, the “Court”) answered this question for the EU insider trading prohibition in Art. 2(1) of Directive 2003/6/EC (“Market Abuse Directive”, “MAD”). After discussing the factual background and reasoning of the decision [I)], this article provides an assessment from a comparative and methodological perspective, arguing that the Court should have exercised more judicial self-restraint [II)1) and II)2)]. It concludes with a summary of the most important dogmatic questions raised by Spector [II)3)].

Keywords: insider trading, insider dealing, market abuse, securities regulation, ECJ, EU-Law, Spector

JEL Classification: K22

Suggested Citation

Klöhn, Lars, The European Insider Trading Regulation after the ECJ’s Spector Photo Group Decision. European Company and Financial Law Review (ECFR,) February 2010. Available at SSRN: https://ssrn.com/abstract=1566943

Lars Klöhn (Contact Author)

Humboldt University of Berlin - Faculty of Law ( email )

Unter den Linden 6
Berlin, D-10099
Germany

HOME PAGE: http://https://plone.rewi.hu-berlin.de/de/lf/ls/kln

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