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

Which of the following is the most likely consequence of a person being convicted of insider dealing under typical statutory regimes?

A convicted insider dealer faces imprisonment and or a fine, and the trade is typically not automatically void between the parties. Insider dealing is a criminal offence, so a purely civil remedy is not the usual outcome, and the legislation does not generally unwind the underlying transaction.

  1. AImprisonment and or a fine, and the transaction is not automatically void as between the parties to itCorrect
  2. BThe share purchase is automatically void and the shares must be returned to the seller
  3. COnly civil liability to repay the profit, with no criminal sanction

Explanation

Insider dealing is a criminal offence, punishable by imprisonment and or a fine. Typically the legislation provides that the contract is not void or unenforceable merely because of the offence, so option B is wrong. Option C is wrong because criminal penalties apply, although civil or regulatory remedies may also be available.

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