Criminal insider dealing (encouraging offence)—a quick guide
Criminal insider dealing (encouraging offence)—a quick guide

The following Corporate Crime guidance note provides comprehensive and up to date legal information covering:

  • Criminal insider dealing (encouraging offence)—a quick guide
  • How can a person commit the offence of encouraging insider dealing?
  • What are the defences to the offence of encouraging insider dealing?

This Practice Note is concerned with one of the three criminal offences created under section 52 of the Criminal Justice Act 1993 (CJA 1993), that is encouraging another person to deal in such securities (whether or not the other person knows they are 'price-affected'), knowing or having reasonable cause to believe that the dealing would take place.

For general information on criminal insider dealing including the territorial scope of the offence, who is an insider and what constitutes inside information and an inside source, see Practice Note: Insider dealing.

How can a person commit the offence of encouraging insider dealing?

A person would be guilty of the encouraging offence of insider dealing if, while in possession of inside information, they encourage another person to deal in securities that are price-affected securities in relation to the information. The offence is complete when the encouragement is given regardless of whether or not the other person acts upon it.

An example would be to take company 'A' with a share price of £10. Company A is aware of an imminent takeover by a corporation that will push the price to £20.