Option Finance: how to guard against insider trading?

Several former financial directors of large groups have been caught in insider trading cases. The AMF accuses them of having used privileged information to sell securities they held. Internally, however, companies make every effort to avoid this kind of business.

Insider trading or misconduct – the act of a person using privileged information, transmitting it or recommending the purchase or sale of securities or shares of listed companies based on this information – would it have become a common fraudulent practice?

This type of business comes up very regularly confirms Pierre Mudet, partner at Ginestié Magellan Paley-Vincent. There are about fifty cases per year.

If these facts are not uncommon, everything is nevertheless implemented within listed companies to guard against this kind of flaw.

To maintain the confidentiality of this information, listed companies have several means to implement. " First, a charter of stock market ethics is distributed internally, within listed companies », explains Pierre Mudet. Then, an insider file is drawn up by the company's legal department. " This sheet, generally produced on an Excel table, must concern each information considered privileged and indicate the contact details of the employees involved. », explains Pierre Mudet. …

In addition, so-called occasional insiders can also join this list. " These are, for example, third parties with access to privileged information in the context of their professional relations, such as lawyers or banks. », adds Pierre Mudet.