S’pore’s Court of Appeal has, for the first time, given a detailed outline of what constitutes insider trading here. This outline includes:
– even if the information used by an insider to trade did not affect the share price greatly, it could still be considered material and therefore amount to unlawful trading*;
– information could qualify as being “generally available” only if the common investor could make deductions, conclusions or inferences from the information of the same quality as the information the insider possessed.
– “‘generally available” information should not be too narrowly defined and a balance should be struck so that the law would not be too onerous on market participants;
– information gained fortuitously or through diligence and a keen analysis of public information should be considered as “generally available”; and
– the elements of insider trading, as set out in the grounds, applied equally to civil and criminal cases. (Of course, the burden of proof in pro
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*Even though some foreign courts have stated that if a firm’s disclosure of information has no effect on its share price, then that information is immaterial as a matter of law, this does not apply. Here the approach of using market impact evidence is “relevant but not conclusive”. The relevant test is whether a reasonable person would expect the information to affect a common investor, and not to examine in detail what actually happened to the share price later.
