Insider trading rules change

The regulations governing annual insider dealing reports from the Stock Exchange are to be changed so as to provide additional information. Companies which are the subject of complaints are likely to be named in future.

Under section 120 of the Companies Act 1990, the exchange is obliged to supply an annual report to the Minister for Enterprise, Trade and Employment, who in turn lays it before the Oireachtas. The report is a "numbers" report, meaning it gives the numbers of cases but not the names of the companies concerned.

The report for 1998 was laid before the Oireachtas last week. It shows that during 1998 four written complaints were received by the exchange in relation to alleged breaches of insider trading law. One report was made by the chief executive of the exchange to the

Director of Public Prosecutions in relation to a suspected offence.

Authorised persons from the exchange were appointed to conduct six investigations. In four cases the chief executive of the exchange decided that a report to the DPP was not warranted. Three investigations were ongoing at the end of 1998.

The Department is working on a ministerial order which would allow for the naming of the companies concerned in at least some of the areas covered by the annual report. It is likely that in the categories of written complaints received, and cases where it was decided a report to the DPP was not warranted, the companies at issue will be named. However, in cases where a file was being sent to the DPP, it is unlikely the company will be named. The issue of exactly what new information will be disclosed is still being considered by the Department's legal advisors.

The fact that a company is the subject of an insider trading inquiry does not necessarily mean the company itself or any of its officers have been accused of wrongdoing. It is possible that a person outside the company, but with access to sensitive information, is the subject of a complaint.