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The ECJ Decision in Spector Photo Group and the Presumption of Use of Inside Information: A Blessing for the Administrative Enforcement of Market Abuse in the EU?

Financial Law Institute Working Paper No. 2010-17

38 Pages Posted: 12 Dec 2010  

Michel Tison

Universiteit Gent - Financial Law Institute

Elke Vandendriessche

Ghent University - Financial Law Institute

Date Written: December 1, 2010

Abstract

In its Spector judgment, the Court of Justice of the EU held that a primary insider is presumed to have used inside information as soon as he has effected a securities transaction while in possession of inside information. This presumption can however be rebutted under circumstances where, in view of the purposes of the Market Abuse Directive, the transaction does not constitute an unfair use of inside information.

In this contribution, we analyse the implications of the Spector judgment for the enforcement of the insider dealing prohibition. Furthermore, we highlight the difficulties raised by the practical application of the conditions under which the ECJ allows to rebut the presumption of use of inside information. We illustrate this with reference to the operation of stock option plans in listed companies.

Notes: Downloadable document is in Dutch.

Keywords: market abuse, insider dealing, inside information, stock option

JEL Classification: K22, K42

Suggested Citation

Tison, Michel and Vandendriessche, Elke, The ECJ Decision in Spector Photo Group and the Presumption of Use of Inside Information: A Blessing for the Administrative Enforcement of Market Abuse in the EU? (December 1, 2010). Financial Law Institute Working Paper No. 2010-17. Available at SSRN: https://ssrn.com/abstract=1722537 or http://dx.doi.org/10.2139/ssrn.1722537

Michel Tison (Contact Author)

Universiteit Gent - Financial Law Institute ( email )

Universiteitstraat 4
Gent, B-9000
Belgium
32 9 264 68 27 (Phone)
32 9 264 68 55 (Fax)

HOME PAGE: http://www.law.UGent.be/fli

Elke Vandendriessche

Ghent University - Financial Law Institute ( email )

Universiteitstraat 4
Ghent, B-9000
Belgium
32 9 264 68 27 (Phone)
32 9 264 68 55 (Fax)

HOME PAGE: http://www.law.ugent.be/fli

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