Download this Paper Open PDF in Browser

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

Paper statistics

Downloads
1,099
Rank
15,101
Abstract Views
3,889