Insider dealers face 7 years in prison

From this week on, individuals connected with listed companies in the Republic who breach new laws on insider dealing and market manipulation will face fines and prison terms of up to seven years.

According to John Given of A&L Goodbody, solicitors, the new laws impose strict disclosure obligations on directors, managers and other people connected with listed companies. The new law, passed on foot of an EU directive, also creates an offence of market manipulation.

Mr Given said at the weekend the law was exceptionally broad, but the key elements were entering into abnormal transactions that gave false or misleading signals to the market, and artificially fixing prices.

"It deals with various types of fictitious devices, and anyone convicted could face up to seven years in prison," he warned.

Under the new legislation, using inside information to buy or sell financial instruments to which the information relates is an offence, as is disclosing it to any other person, unless that is done in the course of the person's employment or duties.

As of last Saturday, companies are obliged to to maintain insider lists of employees and principal advisers with access to inside information, and to ensure that their advisers draw up similar lists.

Companies will also have to carefully control access to inside information, and will be required to put in place measures that allow for immediate public disclosure of this information if it cannot be kept confidential.