The European Insider Trading Regulation after Spector Photo Group

Klöhn Lars
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Klöhn Lars: *Dr. iur., LL.M. (Harvard), Professor of Civil Law, Business Law, Comparative Law and Law & Economics, Philipps University Marburg; e-mail: . lars.kloehn@staff.unimarburg.de

European Company and Financial Law Review, 2010, vol. 7, issue 2, 347-366

Abstract: Securities laws around the world agree that purchasing or selling financial instruments in possession of non-public, price-relevant information does not by itself constitute insider dealing. However, requiring more than the knowing possession of such information while trading – e.g. requiring some kind of fraudulent intent – might impede the effectiveness of any insider trading prohibition. Therefore, securities laws worldwide have to answer the question what exactly constitutes the mens rea requirement of insider trading. In a recent preliminary ruling, the European Court of Justice (“ECJ”, the “Court”, now: Court of Justice of the European Union) answered this question for the EU insider trading prohibition in Art. 2(1) of Directive 2003/6/EC (“Market Abuse Directive”, “MAD”). After discussing the factual background and reasoning of the decision [I)], this article provides an assessment from a comparative and methodological perspective, arguing that the Court should have exercised more judicial self-restraint [II)1) and II)2)]. It concludes with a summary of the most important dogmatic questions raised by Spector [II)3)].

Date: 2010
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DOI: 10.1515/ecfr.2010.347

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