Market abuse: bite your tongue!

Last month, the Financial Conduct Authority (FCA) – the market abuse watchdog in the UK – imposed an £80,000 fine on the former chairman of a London Stock Exchange-listed company, for unlawfully disclosing inside information. The fine was imposed after the FCA found that the chairman had disclosed inside information about the company to two major shareholders (one of which was known as having an active intention to build a more significant shareholding in the company) before the information was announced to the market. The rule which the chairman breached is simple enough to read – inside information cannot be disclosed “unlawfully”. In other words, the chairman was found to have disclosed inside information outside the ‘lawful’ disclosure framework established by the Market Abuse Regulation (MAR) which, in a nutshell, only allows inside information to be disclosed: (i) in the course of one’s employment, profession or duties; (ii) publicly by means of a company announcement; or (iii) in the course of a market sounding.  Keeping in mind that the market abuse rules in the UK are the same as those in Malta (even after Brexit), a number of important lessons and observations are in...