Skip to content

ACCA Applied Skills · Corporate and Business Law (Global) · Fraudulent and criminal behaviour

A director of Delta plc learns in confidence that a takeover bid for Delta plc will be announced next week. Before the announcement, she buys Delta plc shares in her own name. Which statement is correct?

She commits insider dealing. She dealt in securities using confidential, unpublished price-sensitive information that she obtained as a director. Being a director of that company or planning to hold the shares for a time provides no defence.

  1. AShe commits insider dealing, because she dealt using unpublished price-sensitive information obtained as an insiderCorrect
  2. BShe commits no offence, because the shares are in her own company
  3. CShe commits no offence, provided she sells the shares within one year
  4. DShe commits only a breach of contract, because directors have service agreements

Explanation

Insider dealing is dealing in securities while in possession of non-public, price-sensitive information obtained through a position such as director. Owning shares in one's own company or holding for a period gives no defence. The offence is criminal, not just contractual.

Did you get it right without looking?

One question tells you little. A timed set on Fraudulent and criminal behaviour shows your real accuracy, how long you take and where you lose marks.

Practise Fraudulent and criminal behaviourFree diagnostic mock

More Fraudulent and criminal behaviour questions