Insider Trading Conviction Highlights Importance of MAR Compliance Solutions

Ireland has recently seen its first criminal conviction for insider trading. Declan Service was charged with violating the 2016 EU Market Abuse Regulations, and the 2014 Companies Act after the Central Bank of Ireland reported suspicious transactions.

Service was fined £60,000 and could face up to 18 months in prison after investigations revealed that he used inside knowledge to offload his shares in a pharmaceutical company days before rebuying them at a discounted rate. 

In May 2020, Open Orphan, now known as hVIVO, held a meeting in which they announced that they were planning to sell additional shares on the market for a discounted rate. Declan Service was privy to this meeting and used this insider knowledge for his own financial gain. 

Although he claims he was unaware that he was acting outside of the law, the 63-year-old pleaded guilty to engaging in insider dealing, and his sentence is set to be finalised February 2024. 

This unprecedented conviction shows that authorities are clamping down on insider trading and demonstrates a broader commitment to combatting market abuse. As seen in this case, reports of insider trading can cause reputational damage, sanctions and penalties for the individuals and organisations involved. 

What happened with Service and Open Orphan is a cautionary tale about the importance of properly managing insider lists. It’s crucial for companies to maintain control and transparency over precisely who has access to inside information at any time. This means they can monitor trades, maintain MAR compliance, and respond to regulator investigation should the need arise. 

Many companies rely on rudimentary spreadsheets and emails in lieu of a MAR compliance system. This can lead to poor communication, data entry errors and make tracking trades an administrative nightmare.

An insider management system can reduce the risk of insider trading and protect your company against the repercussions if it does occur. Howells Insiderhub is a market-leading MAR compliance solution designed to securely track, communicate and report on limitless projects and insiders. 

Insiderhub is an intuitive system that allows businesses to feel confident they are fulfilling their obligations. It provides increased visibility over who has inside information and features like hosted training, reporting and auditing tools, and consent-to-deal functionality. This helps ensure insiders are fully aware of their duties and obligations under market abuse regulations and enables companies to stay on top of complex admin at any point. 

At Howells, we see first-hand how MAR compliance solutions can truly make a world of difference. Not only can they save you time, but add peace of mind that you’re covered. So, if you want to reinforce your market abuse regulations (MAR) compliance and regain confidence in your insider list admin, speak to an agent for a free demo today.