Appeal Court Spells Out Sentencing Policy for Insider Dealing


Insider dealers can expect substantial jail terms following guidance issued by the Court of Appeal. The advice was given during the summing up in the unsuccessful appeal of solicitor Christopher McQuoid against an eight-month prison sentence for his part in a deal resulting in an illegal profit of nearly £50,000.
Insider dealing is an offence under the Criminal Justice Act 1993 and carries a maximum jail term of seven years. The offence is committed when a person trades in or assists another person to trade in shares or other securities, with the benefit of access to information not at the time in the public domain.
The Appeal Court judges stated that the following factors should be taken into account when deciding the appropriate sentence:
  1. The nature of the defendant’s employment or other involvement that put him in a position to take illegal advantage of inside information;
  1. The circumstances in which the inside information came into the possession of the defendant and the use made of the information;
  1. Whether the defendant behaved recklessly or acted deliberately and dishonestly;
  1. The degree of planning and sophistication involved in this activity, as well as the period of unlawful trading and the number of individual trades;
  1. Whether the defendant acted alone or with accomplices and, if so, the relative culpability of each party;
  1. The amount of anticipated or intended financial benefit (or loss avoided) as well as the actual benefit (or loss avoided);
  1. Although the absence of any identified victim should not normally be taken in mitigation, the impact, if any, where proved, on any individual victim should be taken into account; and
  1. The impact of the offence on public confidence in the integrity of the market, taking into account the impact on public confidence of an offence committed jointly by more than one person trusted with confidential information.
Age and a guilty plea should also be taken into account, as should good character, although it should also be borne in mind that the individual of good character, by misusing the information, has breached the trust vested in him as a result of his good character.
In assessing sentence, full weight must be given, said the judges, to the impact on the appellant and his family, as well as the destruction of his professional reputation.
“This guidance shows how seriously the courts now take insider dealing,” says <<CONTACT DETAILS>>. “Substantial custodial sentences are likely to result from any such activity.”
Partner Note
Court of Appeal: R v McQuoid Criminal Division, 10 June 2009. See

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